Every single year Christmas happens on the 25th of December. You’re giving me a funny look aren’t you…yes Emma I know when Christmas is. Well the crazy thing is that so many of us reach the first of the month and begin to panic about how we will manage to afford it all. With the extended gap between December and January pay days that many of us face the pressure is on!

So many people across the UK, and the rest of the world, go into a large amount of debt each year to cover a holiday that should be enjoyed, not worried about. The January blues then take on a whole new meaning when you have a credit card to pay off. Follow these simple steps to prepare for the big day and allow yourself to enjoy a debt free Christmas!

1. Start planning now

It might seem a bit mad to begin speaking to family and friends about Christmas in July, but this is the best time to figure out what you’ll be doing on the 25th and across the festive season. Figure out important things like who will be hosting Christmas dinner, which friends you will likely be meeting for a Christmas lunch and which members of your family (that you pay for) will have Christmas parties and nights out with work.

These are all inevitable costs, so thinking about them ahead of time will allow you to plan out a budget far in advance. If you are hosting you will of course need to set aside a larger amount to cover the cost of all the food and drink, however if you will be a visitor this year you may just need to cover the cost of an item or two that you plan to take as a contribution to the day. Then there are the presents. Don’t forget the presents!

Nothing needs to be booked in the diary, you just need to get an realistic idea of what you will be up to during the holiday season.

2. Set a budget

Use the information you have collected from your early planning efforts to now figure out a budget for Christmas. It might be as simple as taking your list from step one and marking an estimated cost next to each item. Add these all up and now you have a rough idea of the cost of Christmas.

This budget will be great for two reasons. Firstly, it lets you know exactly what you need to set aside, save up or earn between now and December first in order to be fully prepared. Secondly, it may act as an eye opener for you. You might find that in fact you’re not at all happy with your normal spending habits during the holidays. This is a perfect opportunity for you to make some changes and help your finances!

3. Save a little each month

Taking the total that you calculated in step 3, make things more manageable by breaking that number down. Divide it by the number of months left, or the number of pay cheques before Christmas. Maybe you would prefer to work with a weekly figure, do whatever works for you.

To give you an example, let’s work with months and use a simple total. As of today June 25th there are exactly 5 months until Christmas. Say that I have calculated my budget and it looks like Christmas will cost me about £1000 this year. Divide that by 5 and we are looking to make or save an extra £200 each month in order to cover the cost of Christmas ahead of time.

The Fugal Cottage have started the Christmas savings challenge. This is another great way to save a small amount each week instead of trying to find all of the money you need for Christmas at once!

4. Earn some extra money

Once you have your broken down monthly or weekly cost, you may decide that your normal pay cheque won’t quite be enough and you’d like to earn some extra money each month. There are a number of simple ways to do this.

If it is possible in your line of work, asking for over time is the most straight forward way to earn more. If, like myself, you are self employed, is there a way for you to find more work? It might mean pushing your normal working hours into evenings and weekends for a while, but if it helps you to have a debt free Christmas it’s certainly worth it!

I have mentioned survey sites before a number of times on my blog so I won’t go into too much detail, however Prolific Academic is a website that I recommend over and over. If you ever find yourself with spare time in the evening you can complete surveys as you watch TV. Perfect!

Selling unwanted items on Ebay and Facebook is another great way to make extra money. We’ve all got things at home that we can make some money from. Whether it’s unwanted furniture, some items of clothing that we never wear or toys that the kids don’t play with anymore. Have a look and see what you think might help you reach your target for the month!

I’ve written a post before about Ebay selling and survey sites with lots more information here.

5. Spread the cost

We all like to fill our homes with special treats and wonderful gifts for our loved ones at Christmas time, however if we choose to buy everything at once the hit can be scary, for us and our bank accounts. In the same way we have broken down the cost of Christmas with saving, it is a good idea to spread the cost with spending.

Whether you are able to begin buying gifts in January or picking up food items with long shelf lives in July, purchasing items throughout the year allows you to break down your outgoings instead of dealing with them all in the one month. I’d definitely recommend keeping a note of your spending somewhere so you can make sure you are sticking to your budget. It’s also a good idea to make a note of where you’ve hidden the gifts that you’ve bought. You don’t want to find those on December 26th!

Nicola from Mum on a Budget has written a great post about planning for Christmas that includes a Gift List Tracker.

There is so much more I could say on this topic alone so I will be adding another post on spreading the cost of Christmas next Wednesday. I will make sure to link it here once it is live!


There is pressure on us all to have a perfect Hallmark card Christmas every year. It is important to remember that the holidays are about spending quality time with loved ones, not the things that we spend our money on. Whether you choose to have a simple dinner for two or go the whole nine yards bells and all, I hope these tips help you to enjoy a debt free Christmas!

5 tips for a debt free christmas - pinterest

7 Replies to “5 Tips for a Debt Free Christmas”

  1. I try really hard not to borrow for Christmas. It really should be a Winter celebration, not a year long repayment struggle. I think preparing in advance is key. I actually start buying christmas foods in October, just 1 or 2 a week with the regular shop, it cuts back the huge Christmas food shop massively in the end 🙂

    1. We did this last year and it worked so well! We had the veggies prepped by Halloween. Felt a bit OTT but saved us so much time on Christmas day! 🙂

  2. v good advice here – we’re v low key about Christmas and don’t have many presents to buy – mostly I try to ‘do things’ with people or buy gig tickets for my god children. but I put a bit of money aside each month. Love Bec xx

    1. That sounds like a nice balance Bec 🙂 I think spending festive time together can be so much nicer than just giving “stuff”

    1. It’s the excitement isn’t it? I love spoiling friends and family but you have to keep it sensible if you don’t want to empty the bank!

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