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Three paydays until Christmas: how to save and cut costs

Plan ahead to avoid a budgeting nightmare

It might sound ridiculously early to start thinking about Christmas. But there are just 16 weeks to go, which for many means just three to four paydays left to save enough for festive travel, food and gifts.

In a recent Twitter poll, we asked members if they had started saving for Christmas and over three quarters admitted they hadn’t.

But with the average cost of Christmas last year estimated at more than £800, according to the Centre for Retail Research, time is running out to save up enough cash.

So, here are some tips to cover the cost of Christmas and avoid a financial hangover in January.


Set a Christmas budget you can stick to

Well in advance of the holiday season, start creating a plan for your Christmas spending for things like food, presents and travel. This will help you avoid panic-buying and making impulse purchases that you regret.

Try to be realistic about what you can afford to spend on each person you want to buy presents for. Consider talking to friends and family now about using a secret-santa system – where each person buys for one other – instead of getting everybody a present or agreeing to a spending limit on gifts.

Work out how much to save

The sooner you start putting some money aside to cover Christmas, the better.

If you get paid at the beginning or middle of the month, you have around four paydays left before Christmas Day. But if you get paid at the end of the month, you really only have three paydays to save for all the stuff you plan to buy before 25 December.

For an average Christmas bill of £800, you’d need to set aside £267 from each of your remaining three pay cheques, or £200 if you have four left.

You can separate the money for your Christmas fund from your spending money in an easy access savings account – the top deal currently pays 1.41% AER at the moment.

Or, you could keep it in a high-interest current account like the TSB Classic Plus, which pays 5% on balances up to £1,500, or the Nationwide FlexDirect which pays 5% for a year on balances up to £2,500.

Save your change from now on

One handy way to save without much effort is to see if your current account has a ‘save the change’ function.

Monzo, TSB, Revolut and Lloyds Bank, for example, all have a feature that allows you to automatically round up any purchase you make to the nearest pound and set aside the leftover money in a separate account.

When we looked at Monzo’s version dubbed ‘Coin Jar’, we managed to put £36.50 into savings without thinking about it in one month, so over three months she could put away over £100.

Book Christmas travel in September

Train companies release a limited number of discounted ‘advance’ tickets, which cost far less than those bought on the day of travel, up to 12 weeks before the day of the journey.

So if you plan to travel to visit friends and family around the country this Christmas, you should make a note of when these cheap tickets for the festive season will be released.

Plus, if you’re heading home in the New Year, it’s definitely worth buying tickets in advance, as rail fares are set to rise by 3.2% in January 2019.

Sunday 30 September marks the 12-week countdown to Christmas Eve, but if you plan to travel earlier, you should check the date to put in your diary.

Make a gift list in time for Black Friday

You should try to get your Christmas gift list ready early, so you can shop around and take advantage of mega sale events, such as Black Friday and Cyber Monday, which offer discounts of up to 70%.

Black Friday is an American import that traditionally falls the day after Thanksgiving in the US, but it has become one of the UK’s biggest sales events of the year as well.

In the UK, retailers tend to offer deals in the lead up to Black Friday and over the weekend in stores and online. Cyber Monday, where retailers launch online-only discounts, happens right after.

This year Black Friday will fall on Friday 23 November, and Cyber Monday will take place on Monday 26 November.

Make a start on homemade and personalised gifts

A homemade hamper of jams and treats, or a personalised mug, can be an affordable and thoughtful gift for friends and family but they take time to put together or make.

Get a head start by gathering what you need now and getting the best deal.

For example, if you’re making a hamper of edible treats, keep an eye out for cheap supermarket deals on all your ingredients.

Or, if you’re creating a personalised photo album online, watch out for the last order dates for delivery in time for Christmas on websites like Photobox and Snapfish, as they often need a bigger lead time to create your order.

Cash in on loyalty points

Christmas is a great time to cash in on your loyalty points, so double check what you have managed to rack up with schemes like Clubcard, Nectar and Boots Advantage.

Typically, these schemes allow you to multiply the value of your points with some retailers, so try to look for shops where your points are going to be worth the most.

Find out more: the best and worst loyalty cards

Build up your cashback

Before making your festive purchases online, check if you can earn cashback by shopping through TopCashback and Quidco.

If you click through to the retailer using these websites and complete a purchase, you’ll earn money back on your spending, so you could earn enough to boost your spending money by the time December comes around.

If you need to borrow, do so at 0%

Borrowing money to pay for Christmas should be avoided, especially if you’re struggling to pay off last year’s costs.

But if you need to borrow and have a plan on how to repay what you spend, you should aim for an interest-free credit card.

This can give you some breathing room to help you spread the cost of Christmas without having to pay interest. The best deals right now offer you up to 28 months interest-free on purchases.

Just make sure you have paid off the balance by the time the 0% period is up, as you’ll have to start paying interest on any remaining debt.

You can compare 0% purchase credit cards on Which? Money Compare.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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