Setting a budget at Christmas – and sticking to it

Be the best at budgeting

A survey of British households last year found that we spend an average £106 on going out over Christmas, £172 on festive food and drink at home, and £76 on Christmas-themed experiences¹.

To keep track on your spending over the festive season, set yourself a budget. List all your income you receive and your expected outgoings, like rent, credit card payments and household bills. Our budget planner could help you do this. What you have left will be the money you have to spend.

To work out whether it’s enough, look at your spending last December. Iona Bain, personal finance writer and founder of the Young Money Blog, says: “Think about whether you had enough money last year, where you overspent and where the pinch points came, like your work Christmas party.

Add up your spending in each category: food, drink, travel, presents, decorations and entertainment". she suggests.

“Don’t forget to include any new commitments this year – maybe you’re hosting Christmas dinner for the first time, for example. And don’t forget to put money aside for New Year’s Eve. Then add it all up to get your magic number and see whether you can afford the same level of spending this year.”

You can view monthly statements and see a breakdown of your spending by category, using the Barclays app. You’ll be able to see how you’re spending compared to before, where you spend the most money and more. Just tap ‘Spending’ in your app. You’ll be able to see your spending patterns for up to two years earlier.

Terms and conditions apply. You must have a current account with us, be aged 16 or over and have a mobile number to use the Barclays app.

Put a spending limit on presents

Having a great Christmas isn’t about spending lots of money – it should be about recharging your batteries and spending time with loved ones. Even so, the priciest part of Christmas can be the presents you buy for family and friends.

One way to manage the cost is to suggest Secret Santa for your group of friends or relatives, where you only buy one present for someone else in the group, picked anonymously and with an agreed budget. There are lots of websites that can help to organise it for you.

If you don’t suggest Secret Santa, you could still propose a spending limit. Christmas is an expensive time for everyone, so you might be surprised at how popular a spending cap could be.

Simon Alexander Ong, a life coach, says: “Just make sure everyone is happy and understands the arrangement. If you’re discussing it on a group chat via a messaging app, for example, check that everyone has seen the message and agreed, to avoid any headaches later on."

The best presents aren’t necessarily the most expensive, but the most meaningful, says Simon. “I remember a friend who was going through a particularly difficult period one year and feeling homesick over Christmas.

“I got in touch with his closest friends and family over email to film a short message for him. Once I had received all their clips, I edited a video together. It was a gift that meant so much to him.”

Create a present pyramid

Depending on how many presents you’re buying, a present pyramid could help you work out how much you’ve got to spend on each person, suggests Iona.

“At the top of your pyramid are the handful of people who get the most ‘special’ presents, such as partners or close friends. As you go further down, people who you know less well should receive lower-value presents until you get to the bottom, where a card will do.

“The overall value of presents within the pyramid should fit the total amount you can afford to spend. It sounds tough, but nobody needs to know about your pyramid and it’s a brilliant way to make sure you spend your present budget in a fair and proportionate way.”

Plan ahead to cut other Christmas costs

Don’t forget to book your trains as soon as possible if you’re travelling at Christmas, as ticket prices can be much higher than other times of the year. Look into split-ticketing or getting a discount on off-peak railway journeys with a Young Person’s or 26-30 railcard.

Stock up on essential food and drink while it’s still available at a competitive price. It’s surprising how much you can freeze in advance and use in delicious leftovers post-Christmas. Have a look through your cupboards to see if there are any ingredients, like stock cubes or old mulled wine sachets, you can use up.

Whenever you receive a present in a gift bag in the run-up to Christmas, save it for other people’s presents. Likewise, hang on to any tissue paper, plain cardboard, decorative paper or ribbons from purchases to use for wrapping presents for friends and family. You can always use Christmas labels to cover up the logos.

You can get free and impartial help about anything, from the basics of budgeting over Christmas to buying your first home, from Barclays Money Mentors.

Our team provide 45-minute mentoring sessions in branch, by video and over the phone to chat with you about your money goals, no matter how big or small. You don’t have to bank with us – anyone can book a session.

Book a session

Staying in-in this Christmas

Kate Weston-Webb, 26, from London, says she is embracing JOMO by staying in-in with her friends at Christmas: “I meet up with friends from university each year for dinner and drinks. Last year we switched things up by suggesting a night in watching Christmas films instead of an expensive night out. It was great fun, much cheaper than going out, and actually a better way to catch-up with each other.”

The information contained in this article is for general information purposes only and is not intended to constitute financial advice. Please seek independent professional advice relevant to your circumstances. Barclays does not accept any liability for any losses as a result of relying on the information contained in this article. All opinions and estimates are given as of the date of publishing.