In 2023, Brits spent a record £13.7bn on Christmas food shopping alone in the run-up to the festive season.
This year, the average budget among Brits for festive spending is £626 and one in four are already starting their shopping for the big day due to FOSO (fear of selling out), according to a Rakuten study.
Alex Stedman, trend expert at Rakuten said this is partly due to shoppers seeing gifts becoming popular on social media and not wanting to repeat mistakes of the past when they lost out on buying the perfect gift.
She added: “By planning ahead, we’re not only securing gifts we know our loved ones will want but also ensuring a much more stress-free festive season – something we can all aspire to.”
Stedman recommends subscribing to online retailers so you receive alerts when products are restocked or discounted leading up to December.
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The trend expert also advised having a backup gift up your sleeve just in case the product is completely sold out.
Budget, budget, budget
YourMoney.com rounded up the best tips when it comes to saving your cash at Christmas, from credit cards and supermarket loyalty schemes to buy now, pay later accounts.
Dani Whitehead, chief marketing officer at Loqbox, said to avoid a “post-holiday financial hangover” you should sit down and budget every family visit, activity, travel costs and team nights out before writing down how many people need presents from you.
Whitehead suggested setting up a standing order to a small, regular account each payday from this month on.
She added: “Many banks offer ‘round-up’ features, where the spare change from your purchases is added to savings – perfect for boosting your festive fund over time without even noticing.
“Make sure that your savings come out on or just after your payday – that way you’ve set aside money for Christmas before you’re tempted to spend it on anything else.”
She also warned against leaving it until the last minute not only for stress-related reasons but to avoid being stung at the checkout, as well as dodging long queues.
With more than three months to go, Whitehead suggests chipping away at your food shop and being careful of buy, now pay later cards.
“Try spreading the cost by picking up non-perishable items each time you shop between now and December. If you can, look into local food co-ops or markets for great deals on fresh produce and consider making food from scratch to cut costs”, she said.
The ever-growing popularity of the yet-to-be-regulated buy now, pay later (BNPL) accounts means millions more will be splitting payments into 2025 this Christmas.
But, Whitehead warned: “BNPL schemes might seem like a convenient way to spread costs, but they can lead to overspending if not managed well. If you’re using BNPL, be sure you can make the repayments on time, or you risk late fees or damaging your credit score. Set clear limits and include them in your budget.”
‘Every little bit helps’
Meanwhile, loyalty schemes in Supermarkets can not only save you money on specially discounted items but reward you for parting ways with your money there.
Whitehead added: “Remember, every little bit helps. Look for cashback offers when shopping, and you could also even find ways of earning a little extra throughout the year.”
However, chasing Christmas discounts at supermarkets is not the preferred method of Paul Carlson, managing partner of Law Firm Velocity.
He said: “Supermarket savings schemes are great, but I prefer cash-back credit cards for flexibility. They give me rewards without being tied down to one store. Just don’t overspend just to earn rewards — that’s usually where many of us get stuck.
“I’ve seen people get burned by relying too much on Christmas-saving stamps. They think they’re saving money, but if you can’t use them when needed, it’s just a waste of funds. If you must, stock up on vouchers starting in September. By the time December rolls around, you’ll have saved enough to cover your entire grocery bill for the holidays.”
To apply for a credit card or not?
When it comes to credit cards, Rachel Springall, finance expert at Moneyfactscompare.co.uk suggested you check your credit score before you make any applications for a loan or credit card.
Springall said: “Managing debts and spreading the cost of any large purchases due to the festive spend is wise. It is vital consumers keep up with their repayments and switch deals if they are being charged interest if they can, but if they are struggling, then credit cards can permit a drop in monthly repayments down to the minimum requirement, but this should only really be done as a temporary measure.”
One lifeline is to opt for a 0% purchase credit card, which can offer shoppers, in some cases, up to two years to pay back the outstanding balance.
She added: “Some of the longest interest-free balance transfer offers carry higher transfer fees, but there are still some fee-free offers for borrowers to consider instead.
“Those borrowers who do not have an interest-free offer on their current deal must ensure they clear their balance before they incur interest. This is essential is someone is using a cashback credit card for example, as any interest charged would wipe out any gains.”
Elsewhere, Whitehead said one way of managing Christmas is by getting creative.
She said: “Not all gifts need to come from a shop. Homemade presents often carry more sentiment, and making DIY decorations can turn into a family tradition.
“Big families can quickly find themselves drowning in present buying. Of course, it’s normal to want to treat the kids, but why not do a Secret Santa with a set price limit for the rest of the family? Having one person to focus on allows you to pick something special that they’re going to love.”
As well as saving and spending wisely in the run-up to Christmas, one way of affording the festive period is by bulking up your funds with a side hustle.
She added: “Do you have clothes or other items that you no longer need that could go on selling platforms like Vinted or Facebook Marketplace? Maybe there are a few presents you received last year that you could regift? Make them work towards this year’s Christmas fund”.
