How to budget at Christmas: 6 tips to help ease financial stress amid cost of living crisis

With inflation at a record high and wages facing real-terms cuts, it is understandable if you are anxious about your personal finances

Christmas 2022 is now mere weeks away, with festive fever gripping the UK’s high streets.

While all the TV adverts and shop displays are part of the excitement of this time of year, this Christmas is coming against a backdrop of a major cost of living crisis that has created financial uncertainty for thousands of households across the country.

With inflation at record highs, wages taking a real-terms cut and fears of a recession meaning many people’s jobs could be on the line over the next 12 months, it’s totally understandable if you’re feeling anxious about affording presents or going Christmas shopping over the coming month.

But there are several things you can do to ease any money worries you may be facing - or at least spare yourself from being pressured into spending. NationalWorld has compiled a guide for how to budget your way through December.

So, without further ado, here are the six top tips for how to get through Christmas without breaking the bank.

Christmas can be a hard time for budgeting your personal finances (image: Getty Images)
  • Set yourself a budget

Financial broker Norton Finance recently provided several tips on how to create a budget. By doing so, it says you can alleviate your money concerns as you can see exactly what your incomings and outgoings are.

To set one up, it suggests getting an app (most budgeting apps have a basic version that’s free, although they might contain adverts), setting up a spreadsheet, or - if you want to keep it really simple - grabbing a notepad. Put down what money you have coming in each month and then what you’re spending on essentials, like groceries.

By subtracting essential spending from your monthly income, you can see exactly what you have at your disposal to save or spend on non-essential items. The benefit of bespoke apps is that they can keep you on track with nudge notifications.

But regularly checking and updating your spreadsheet or notebook numbers will be more than adequate for keeping you in touch with how you’re getting on.

  • Ask yourself questions

Martin Lewis’s Money Saving Expert website has several key bits of advice on how to budget your way through Christmas. One of the top tips MSE has provided is to follow its ‘money mantras’.

If you’re sales shopping, or are tempted to splash out more generally, the website advises you to ask yourself the following: ‘Do I need it?’ and ‘can I afford it?’. If the answer to both of these questions is ‘no’, don’t buy it.

  • Switch off marketing notifications

Advertising can now reach us pretty much anywhere, and at any time. But you can switch these notifications off if you don’t want to be tempted into spending.

MSE recommends unsubscribing from email and text marketing, while also turning off notifications for any shopping apps you may have. By cutting down on this advertising noise, you’ll feel less inclined to part ways with your cash.

It can be hard to avoid being encouraged to spend money at Christmas (image: AFP/Getty Images)

It could also be worth toggling the ‘do not disturb’ hours on your smartphone if you find that there are particular hours of the day where you tend to make impulse purchases.

Another top tip from Martin Lewis’s team is to limit your social media adverts. These tend to be highly targeted and could tempt you into buying something you’ve searched for.

By limiting them, you can ease some of the pressure you’re being put under to spend money. To find out exactly how to do this, visit the MSE website.

  • Set spending caps on your cards

With the imminent arrival of the Christmas party season, MSE also says it might be a good idea to set limits on your debit and credit cards.

Runaway spending, particularly on nights out (something your author has certainly been guilty of in the past), can throw your budgeting out the window. But several banks allow you to lower your contactless spending limit or cap what you can spend in a single transaction, which can stop you from breaking the bank.

  • Ask for help

If you’re really struggling with budgeting and don’t know what to do or where to turn, there are several organisations you can talk to who specialise in helping people to manage their finances.

The cost of the average supermarket bill is forecast to rise by £682 per year (Photo: Getty Images)

For starters, the government’s MoneyHelper website and independent organisation Citizens Advice both offer free, impartial financial advice.

Should you be struggling with debt, StepChange and National Debtline are two charities that can help you out, either online or on a one-to-one basis.

  • Read NationalWorld’s guides

NationalWorld has put together guides that can help you to reduce your spending on energy and groceries.

Our supermarket hacks piece tells you all about the tricks supermarkets employ to try to get you to spend more than you need to, as well as what you can do to counter them.

Our article on how to reduce your energy usage may also help you to keep hold of more of your money this winter.

Meanwhile, money expert Martyn James has written several advice pieces which could help you with your spending, including this piece about good shopping habits.