Christmas is magical—but January credit card bills aren't. The average UK household spends over £1,000 on Christmas, and many start the new year in debt. Here's how to enjoy the festivities without the financial hangover.
Step 1: Set Your Total Budget
Before buying anything, decide your maximum spend:
- What can you afford without going into debt?
- If using a Christmas fund, what's in it?
- What did you spend last year (and regret)?
ℹ️ The Reality Check
If £800 is your budget, that's your limit. No "just this once" exceptions. The magic of Christmas isn't in expensive gifts.
Step 2: Allocate Your Budget
Divide your total across categories:
- Gifts: 50-60%
- Food and drink: 20-25%
- Decorations: 5-10%
- Entertainment: 5-10%
- Buffer: 5-10%
Step 3: Create a Gift List
List everyone you're buying for:
- Name
- Maximum spend per person
- Gift ideas
- Where to buy
Stick to your per-person budget. If the list is too long, discuss with family about limiting exchanges.
Track Your Christmas Spending
Use iBudget to monitor gift purchases and stay within budget.
Gift Saving Strategies
- Secret Santa: Buy one gift instead of many
- Family draw: Each adult buys for one other adult
- Homemade gifts: Baked goods, crafts, photo albums
- Experience gifts: Time together instead of things
- Set spending limits: Agree with friends/family
Food Budget Tips
- Plan Christmas dinner menu early
- Buy non-perishables in advance when on offer
- Don't over-cater—we always buy too much food
- Ask guests to bring a dish
- Compare supermarket Christmas ranges
For Next Year: The Christmas Sinking Fund
Start saving in January:
- Christmas budget ÷ 12 = monthly savings
- £600 budget = £50/month
- Set up automatic transfer
- By December, it's all saved
About iBudget
iBudget helps couples and families take control of their finances with simple, collaborative budgeting tools. Track spending, set goals, and build wealth together.
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