It’s easy to overspend during the festive season, especially when we’re bombarded by Christmas advertising encouraging us to splash out on everything from food to party wear, as well as presents for friends and family.

The financial pressures that come with this time of year can make it extremely difficult to manage your finances, particularly when the cost of living is already squeezing budgets. Fortunately, there are plenty of ways to keep costs down if you plan ahead.

Here’s our rundown of some of the ways you can cut costs this Christmas, so that you don’t end up with a festive financial hangover.

Make a list

Draw up a list of everyone you want to buy presents for, your overall budget for gifts, and how much you plan to spend on each person. You could jot down a few present ideas for each person so that you have options if one turns out to be too expensive. Steer clear of adding extras, and remember that it’s the thought that counts, rather than how much the present costs.

Agree spending limits

One method that many families and couples use to manage their spending at Christmas is to set spending limits on presents. This reduces the fear that a loved one will buy you a more expensive present, and enables you to stay in control of your spending. Alternatively, if you’re watching the pennies, you could agree to a no-gifts year with the adults in your family, and just give the children presents.

Look for deals and discounts

Once you have an idea of what you want to buy for each person, search for the best deals within your budget. There are vouchers on sites such as VoucherCodes, for example, for everything from meals out to new laptops. If you’re looking for a particular product, use the PriceRunner website to find the cheapest place to buy it. You can also find some of the latest deals in our regularly updated Discounts and offers section.

Remember if you find items you want to buy on sale, it’s still worth checking whether you’re actually getting a bargain by comparing prices before you buy.

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Use a browser extension

Make use of a browser extension such as Honey or Pouch when shopping online. Once downloaded, a browser extension will automatically look for, and apply any voucher codes that it can find to reduce the cost of items that you’re buying. As well as saving you money, Honey also offers cash back on purchases which you can exchange for gift cards for sites such as Amazon.

Check your loyalty points

If you have racked up loyalty points from spending at your favourite stores, now may be a good time to cash them in to help with Christmas shopping costs. If you don’t have a card for a particular store where you’ll buy a present or two, sign up now to make use of the extra Christmas costs and rack points for future savings.

Some of the biggest and most popular loyalty schemes are on offer from major retailers such as Boots, John Lewis, and Sainsbury’s. For example, if you’ve rack up 10,000 points on your Sainsbury’s Nectar card, you can get £50 off your Christmas shop. Read more about how these work and how to make the most of a particular scheme in our article Shop loyalty schemes: what are your points worth?

Use a rewards credit card

If you use a credit card, the Christmas period can be a good time to sign up to one that offers rewards on your spending. That’s provided you avoid racking up interest changes by paying off your balance in full each month.

For example, the American Express Platinum Cashback Everyday card could be a good option. It pays 5% cashback in the first three months, to a max of £100, making it perfect for the period before Christmas. After this period, you’ll receive 0.5% cashback on spending up to £10,000 (and 1% cashback on spending above this amount). Plus, the card is fee-free. Read more in our guide What are the best reward credit cards?

Get cashback

If you’re doing the bulk of your Christmas shopping online, you can also earn cashback on your spending through sites such as and

You can register for free on both of these sites and then you simply search for the stores that you’re planning to buy from. Click on the link to take you through to the site you want to buy from, and you could receive some money back on your purchase. Read more about how cashback sites work in our article Cashback websites: how to earn money when you shop online.

Organise a Secret Santa

Rather than buy everyone an individual present, you could set up a ‘Secret Santa’ for a group of friends or per family. This typically involves agreeing to spend a set amount on a gift, then picking a name out of a hat that tells you who you’re buying for. The idea is that everyone gets a present, but you only have to buy one each.

Save on postage

Postage costs can rack up quickly, especially if you’ve got a big family spread out over the country. For small items, the Post Office is generally considered the cheapest option, but if you’re sending a present that’s around 1kg or more in weight, a courier service may be cheaper. You can use Parcel2Go to compare the cost of up to eight couriers for a specific parcel, based on its size and weight. If you’re ordering a gift online, some retailers will offer to gift wrap and send the parcel directly to the recipient for free if it’s worth over a certain amount (usually around £30).

Get creative

If you’re on a really tight budget, why not try your hand at making something, or give some of your time or share a skill?

Offer your time/skills: For example, if you’re green-fingered and they’re not, you could offer to give them gardening tips. Or, perhaps you can play a musical instrument and offer lessons if you know they want to learn, for example. Alternatively, simply offering to walk to the dog a few times or offering to babysit for an evening would be a huge help to some families.

Memories: Another option is to simply print some lovely photos and buy cheap frames from Ikea or your local supermarket. You can buy dozens of photos each month for just the cost of postage using apps such as Free Prints, for example.

Make your own: Giving gifts you’ve made is a great way to keep costs down, and show you’ve gone to a lot of time and effort. You could bake a cake, or make a calendar, for example. Find more ideas for homemade presents in our article 18 homemade Christmas gift ideas.

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If you’re considering getting professional financial advice, Unbiased is offering Rest Less members a free pension review. It’s a chance to have a qualified local advisor give an unbiased assessment of your retirement savings.

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Be truthful

Everyone knows we’re in the midst of a cost of living crisis, so if you’re financially struggling, you aren’t alone. If you can’t afford to buy gifts this year, let your loved ones know, and they should understand. If you’re hosting Christmas, ask others to bring some of the food and drink so you’re not left footing the entire bill on your own. Think about what you can truly afford to spend money on, and what you can’t.

Limit your socialising

Don’t feel you have to go to every party or get together you’re invited to. If you’re on a budget, it can help to team up with someone else who’s also watching the pennies. Saying no to another round of drinks is much harder when you’re on your own. Work out in advance between you how much you’re happy to spend and stick to it.

Take cash

It’s not sensible to carry a lot of money in your purse. But taking out exactly how much you can afford to spend in cash on an evening out can ensure you stick to your budget. After all, it’s easy to overspend when you’re having fun as the last thing you want to think about is your finances.

Host a 'potluck' dinner

If you throw a potluck dinner, you invite your friends or family round and ask them to bring a dish or a bottle. This way, you share the cost of hosting a big get together, and it’s a great way to try new dishes and drinks that you might not have otherwise have tried.

Ditch or reduce alcohol

The festive ‘party season’ typically includes plenty of opportunities to drink your favourite tipple, whatever that may be. But if you’re willing to cut down on your booze intake even a little, you could save some money. There are masses of cheaper, alcohol-free options these days, as a growing number of people choose to ditch the drink, even for the festive season. Read more in our article 13 affordable and tasty alcohol-free drinks.

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