Christmas Budget Planner: How to Plan Spending Without the January Shock

By Flupy Team 7 min read Household money

Illustration of a family at a kitchen table planning Christmas spending with a gift list and a coin jar

Most of us know roughly what we would like to spend at Christmas. The trouble is that the real total is usually higher, because the small costs never make it onto the list. Cards, postage, a replacement set of tree lights and an extra bag of food for visitors all add up.

A simple Christmas budget planner fixes that. You write down everything, choose a total, and work backwards to what you need to put aside each month. It takes an evening, and it makes January a lot calmer.

This article gives general information only. It isn't financial, legal or safety advice, and your own circumstances will differ.

Start by listing everything

Before you pick a number, write down every cost you can think of. Presents come first for most people, but they are rarely the whole story. A good list has these headings:

  • Presents for family and friends
  • Food and drink, including anything for guests
  • Cards and postage
  • Decorations, the tree, lights and wrapping paper
  • Travel to see relatives
  • Social events, such as work nights out, school events and meals with friends

Look back at last year if you can. Bank statements and your banking app will show what you really spent, which is more reliable than memory. MoneyHelper makes the same point about its own budget planner: the more accurate your figures, the more useful the result.

If you are budgeting for the whole household, include everyone's spending in one place. Citizens Advice reminds people to include money spent on a partner or family when working out a budget, and the same goes for Christmas.

Set a total you can afford

Once the list is written, add it up, then compare it with what you can genuinely spare. If the list comes to more than you can afford, that is useful to know early rather than on 23 December.

You have two choices: trim the list or raise the total. Trimming is usually kinder to your future self. Cut a category down, buy for fewer people, or agree a smaller limit with the adults you swap gifts with.

Give every person an amount

MoneyHelper suggests making a list of the family and friends you will buy presents for and allocating an amount to each person. Write the amount next to the name before you start shopping. It might look like this:

  1. Child one: an amount for the main present, plus a stocking
  2. Grandparent: a smaller amount, with a card
  3. Teacher or childcare gifts: a set amount each
  4. Friends: a single agreed limit for the group

A list also helps you stay on track. It is fine to add someone you forgot, but add them to the list with an amount, rather than buying on impulse.

Talk to the people you buy for

MoneyHelper notes that pressure to please loved ones, and to give children the perfect Christmas, tops the list of reasons people overspend. It also points out that if you spend a lot on others, they may feel pressure to spend the same on you, even if they cannot afford to.

Once you know what you can afford, tell people what you plan to spend. It can feel awkward, but a quick message agreeing a limit often comes as a relief to everyone.

Don't forget the extras

The costs people miss are often the small ones. MoneyHelper's list of Christmas essentials is a handy prompt:

  • Cards: work out how many you need rather than buying several boxes. You may have some left from last year. An e-card can save money if you do not mind skipping a physical one.
  • Postage: MoneyHelper says second class is cheaper than first, and the earlier you send things, the cheaper it is. Check the posting deadlines with Royal Mail or your courier, not from memory.
  • The tree: a real tree is not cheap, especially if you need a taxi to get it home. MoneyHelper says a fake one is often cheaper and should last three or four years, if not longer.
  • Tree lights: MoneyHelper suggests putting a spare £30 in the budget in case last year's lights have given up. If they still work, spend it elsewhere.
  • Wrapping paper: check what is left over first. MoneyHelper suggests plain colours that can be used for gifts all year round, or brown parcel paper with a ribbon.

Give each of these a line in your plan, even if the amount is small.

Plan the food and the hosting

If you are hosting, think about how many people are coming and how much food and drink you will need for them. MoneyHelper recommends working this out as part of your budget, rather than leaving it until the supermarket.

Planning meals ahead helps here, and so does a shopping list that you actually stick to. Our post on weekly meal planning on a budget covers the basics, and a shared family shopping list stops two people buying the same thing. Delivery slots and last order dates vary by supplier, so check these directly with your supermarket.

Turn the total into a monthly amount

This is the step that prevents the January shock. MoneyHelper explains that it is difficult to pay for Christmas out of December's pay packet alone, so it makes sense to save up beforehand. The earlier you start, the less you need to put aside each month.

The sum is simple: take your total and divide it by the number of months you have left. As an example, a total of £360 saved over six months is £60 a month.

MoneyHelper gives its own example: saving £20 a month from the start of the year gets you £240 to spend at Christmas. Even a small amount over a few months can make a big difference.

Two tips from MoneyHelper are worth copying:

  1. Treat saving like a bill. A regular sum each month or week works better than promising to save whatever is left over, which might be nothing.
  2. Be realistic. It is better to commit to an amount you can manage than to give up after a month.

If you are starting later than you would like, do not give up. A smaller pot is still better than none, and you can lower the total to match.

Keep track as you spend

A plan only works if you check it. Each time you buy something, note the amount against the person or category. Once a week, look at what is left in each section.

If one area goes over, take the money from another area on purpose, rather than letting the total creep up. That small habit is what keeps December from turning into a surprise.

How Flupy can help

Flupy's Household Budget lets you see where your money goes each month. You enter expenses by hand, as Flupy does not connect to bank accounts, so you stay in control of what goes in. Our post on budgeting and tracking bills as a UK household covers the basics. You can use it for Christmas, or a notebook or spreadsheet will do the same job.

If the total is more than you can afford

Sometimes the honest total is out of reach. MoneyHelper's Christmas guide covers saving and borrowing for the festive season, and its free budget planner shows what is left over after your income and outgoings. If money is tight, use that as a starting point and reduce the list to fit, rather than borrowing to cover the gap.

Further reading

When you are ready to keep your Christmas plan and everyday spending in one place, try Flupy free for 30 days or see the pricing.

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