It may be only mid-October and still 73 sleeps until the big day, but experts say you should already be thinking about how to pay for Christmas without going into debt.
Figures from comparison site MoneySuperMarket suggest the average family will spend more than £1,600 this festive season.
This includes £180 on presents and £430 on hosting.
Kara Gammell, personal finance expert at MoneySuperMarket and Metro’s Bargain Hunter, says now is the perfect time to start taking action to bring down the festive costs.
‘The Bank of England reports that UK households spend nearly 30 per cent more in December than in a typical month,’ she says. ‘By starting early, you can spread the cost, protect your credit score and avoid a financial hangover in January – making all the difference to both your wallet and peace of mind.’
Here are five things you can do now to cut the cost of Christmas spending. Your future self will thank you for this in January.
Sign up for a cashback card
Before you start your Christmas spending, make it pay by signing up to a credit card that will give you points or cash on all festive food and gifts.
American Express usually has the best cashback deals, and many of its cards are fee-free in the first year and offer an introductory bonus. At the moment, the free Amex Cashback Everyday card offers five per cent cashback on all purchases for the first five months, up to a maximum of £125.
Non-Amex options include the new Lloyds Ultra card, which is also free and offers one per cent cashback on spending.
In both cases, ensure you pay off your credit card each month, otherwise the cashback you are receiving will be dwarfed by the amount of interest you pay.
Declutter to make a present-buying pot
With everyone else searching for Christmas presents for families, now is a good time to declutter and make cash to spend on your own festivities.
New research from Paragon Bank shows that a fifth of us are planning to use second-hand sites like eBay, Vinted and Depop to buy Christmas presents this year, meaning that there will be plenty of people searching for your finds.
Putting unwanted clothes and other items on Vinted or eBay now could help you to build up a good pot of money before December.
Instead of leaving the money in your Vinted balance to spend on gifts, however, opening a savings account to deposit the money you’ve made will help to ensure it is kept safely until you need it and earns you some interest at the same time.
Easy access savings accounts with the Post Office, Tesco and United Trust all offer rates at over four per cent.
Switch bank accounts for extra cash
There’s still time to make hundreds of pounds before Christmas by switching your bank current account to a new provider.
Banks offer the cash to tempt you to switch to them in the hope that you’ll stay put but there’s nothing to stop you from pocketing the money and then switching again. At present, the top offers include £200 for switching to either Lloyds or Barclays and £180 when you switch to TSB.
You can’t usually get these bonuses if you’ve received similar cash incentives from the banks previously and you may have to meet conditions such as making a certain number of transactions or downloading a banking app.
If you’re concerned about switching your main bank account, the Current Account Switch Guarantee ensures you’re compensated if payments are missed and penalties accrued.
Start a supermarket savings scheme
If you’re planning a big Christmas food shop with a certain retailer, you can get a boost to your spending by joining their festive savings clubs.
These usually offer a bonus to persuade you to save for Christmas, and you often don’t need to commit money too far in advance to qualify. Each supermarket has its own scheme with different deadlines, so check the small print with the one you usually shop at.
Sainsbury’s, for example, pays £2.50 on every £50 saved on its Christmas Club card by November 1, and you can receive a maximum bonus of £25, while Asda’s scheme offers up to £15 in tiered bonuses if you load money onto your card by November 9. Iceland has the most generous scheme, allowing you a £20 bonus if you put £100 on its Bonus Club card by October 28.
Have a chat about gifting
One of the best ways to save money this Christmas is to agree not to spend too much of it on each other.
Now is the time to talk to family members and friends about cutting down on Christmas presents this year, before everyone has made a start on their gift lists.
Only buying presents for the children in a family can cut the Christmas spending significantly, but if this seems to be going too far, consider other ways of bringing down the cost, including setting a limit to the cost of each gift, setting up a Secret Santa so that everyone only buys and receives one present, or agreeing to buy gifts exclusively second-hand or from charity shops.
If you decide on the Secret Santa option, try free apps such as Elfster and Drawnames to ensure that gift recipients are chosen at random without having to physically draw names from a hat.
