Christmas can often be a hard time for people for many different reasons, especially during a financial crisis. If you’re worried about overspending and how you’re going to be able to afford the festivities, then you’re not alone.
In late 2022, we surveyed more than 2,000 people across the UK, with a diverse age range from 21 to 55+, to understand how they have been impacted by the cost of living crisis. Their income ranged from £18k to more than £100k. The research found 53% were worrying about the cost of Christmas due to the financial crisis and a third of people were trying to save more for Christmas than usual.
Almost a year on, are we in a different place financially or are the Christmas concerns repeating?
We once again asked 2,000 people across the UK, how they were feeling about their finances here are the key findings:
56% of the respondents mentioned they save money specifically for Christmas, that’s 3% more than last year. We also found half of people planned to spend less this Christmas and 60% want to cut back spend in the new year.
The majority of people saving for Christmas were aiming for between £100-£500 for Christmas.
Those below 40 were found to be far more likely to save for Christmas.
When it comes to spending their Christmas savings, the top three priorities were:
Travel, followed by social events and parties came in fourth and fifth respectively.
If you're already concerned about saving for Christmas 2023, there are a few changes you can make to help relieve some of the financial stress that comes with the festive period. With a bit of financial planning, you can take the stress out of saving and feel comfortable with your Christmas budget.
The first step towards saving for Christmas is to review your current finances. Take a look at your income and your outgoings, and consider what you could change to save a little extra before the big day.
When it comes to saving for Christmas, having a savings goal in mind will help you to stay motivated. After you’ve created your Christmas budget, you should know how much you’re likely to be able to save each month. Also, our tips on how to save little and often, may help you with reaching your savings goal before Christmas.
We can’t recommend enough creating a Christmas budget. Not only will you be able to visualise what you need to buy and spend your money on, but it’ll help you keep yourself on track. Be realistic about your budget and how much you can afford to spend and save.
If you want to get the most out of your savings, then it’s a good idea to start shopping around. Switching to a savings account with a higher interest rate is an easy way to get more from your savings as you earn more on what you deposit. Some banks also offer cash when you switch current accounts, so it’s worth seeing what offers are out there.
Have a look at our savings accounts here, just be aware of the fixed term and make sure you plan ahead if you want access to your savings on a specific date.
Whether it’s buying the turkey for Christmas dinner or saving for expensive gifts, budgeting for big purchases can ease the pressure. Start planning and making small changes so you can afford to buy the big purchases this Christmas. Some good examples are cutting down on the number of takeaways you have in a month or swap big-name brands for supermarket-own brands to help save money where you can.
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.