Navigate the Festive Season Without Financial Stress

The holiday season—a time for Christmas or New Year—is usually packed with gift-giving, celebrations, and memorable dinners. While wonderful, this can also bring significant financial pressure, especially during the ongoing cost-of-living crisis.

Research shows many people feel this stress keenly. A 2025 YouGov study found that a third of Britons (33%) are typically at least fairly worried about how Christmas will impact their finances. This concern is even higher in lower-income households (under £30,000), where it rises to 42%.

This time of year, can certainly boost our mental health, but it’s vital we approach it with a smart, financially conscious plan. Getting your holiday budget right is a fantastic way to set yourself up positively for the New Year and beyond.

To help you manage your money during the festive period and into the future, we’ve compiled our top tips for saving money without sacrificing the spirit of the season.

How to Budget for a Stress-Free Christmas

1. Create a Budget and Stick to It

It's tempting to overspend to give loved ones a 'magical' experience. Instead, get grounded by working out a clear budget. Once your budget is set, you can prioritise who you buy gifts for.

2. Agree on Mutual Spending Limits

If skipping presents isn’t an option, suggest agreeing to a mutual spending limit with friends or family. Keeping gifts within a shared, comfortable means takes the pressure off everyone and ensures you’re not worrying about overspending or underspending. Discussing money can be awkward, but MoneyHelper’s tips on [having conversations about money] can help you prepare.

3. Hunt for Discounts and Freebies

With a budget in place, become a savvy shopper! Look out for deals and freebies to stretch your money further. For example, a website offering free photo prints could be used to create a wonderful, personal gift. We recommend keeping an eye on MoneySavingExpert’s deals page for ideas.

4. Ditch High-Risk Christmas Savings Clubs

Christmas savings clubs may seem convenient, but they carry risks. They aren't regulated like banks and building societies, often don't offer interest, and you could lose your money if the scheme fails. Plus, you might only get your savings back in restrictive vouchers.

• Better Alternative: Save your money in a savings account at your bank or with a credit union. Both options offer higher interest rates and greater protection for your cash.

5. Think Twice Before Borrowing

Borrowing money to cover the holidays might feel like an easy fix, but debt creates significant stress on your mental health. Before you reach for a loan or credit, challenge yourself to find ways to save money instead—you can still make the season memorable without the financial hangover.

6. Sell Unwanted Items for Extra Cash

Look around your home for things you no longer use. Old electronics like phones or tablets can hold surprising value. Selling these items not only provides funds for presents or dinner but also helps others find a bargain!

Top Tip: Sites like eBay and Facebook Marketplace make selling online simple. Make this a regular habit, even after Christmas, to regularly bolster your budget.

7. Cut Down on Christmas Dinner Waste

The festive meal is a huge expense—the average UK household spends £169 on food at Christmas! According to Respect Food, this is also when we generate the highest food waste.

• Be a Smart Buyer: Only buy what you truly need. Calculate your guests, consider dietary requirements, and stick to your list.
• Break It Down: If the task feels overwhelming, break the food plan into smaller steps, starting just with planning the main Christmas Day meal.
• Look for Deals: Keep an eye out for grocery deals or consider a more budget-friendly chicken as an alternative to an expensive turkey. Use tools like MySupermarketCompare to check prices across stores.