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12 ways to cut Christmas costs without cutting the fun

Christmas is the most expensive time of year for families, but financial experts tell LIsa Salmon how to reduce the cost and still have a great time.

Lisa Salmon
Friday 02 December 2022 09:00 GMT
2D9EMGG Giving and getting presents on Christmas holidays. Teen smiling girl having fun, holding big gifts isolated on yellow studio background. New Year 2021 meeting, childhood, happiness, emotions.
2D9EMGG Giving and getting presents on Christmas holidays. Teen smiling girl having fun, holding big gifts isolated on yellow studio background. New Year 2021 meeting, childhood, happiness, emotions.

There’s no doubt that the cost-of-living crisis is taking the sparkle away from Christmas for many families.

New research from retail and hospitality technology company Fourth ( suggests the current sky-high costs for everyday necessities – including energy and food – means half of consumers say their Christmas shopping experience is being negatively affected, and a similar proportion are planning to spend less over the festive season.

“The cost of living is biting everyone, and Christmas can feel like a burden rather than a joy,” agrees finance expert Holly Mackay, founder of the consumer financial website Boring Money (

But Rajan Lakhani, a money expert at the smart money app Plum ( promises that although times are tough, there are many ways to cut festive costs.

Buying presents for family and friends is going to be harder as prices rise, stretching family budgets further,” he says. “But it’s definitely still possible to budget for a wonderful family Christmas this year.”

Here, the experts give their tips…

1. Agree to buy a gift for just one person

Mackay says a good way to keep costs down is to pick names out of a hat and buy one really nice gift for just one family member, rather than lots of little things for everyone – like a secret Santa. “This will save all those last minute little expenses which can really add up,” she says.

2. BYO dishes for Christmas dinner

If you’re hosting Christmas, make a list of things for your guests to bring, to spread the financial burden, advises Mackay. “Ask other people to bring wine, a cheese board or some nibbles for before lunch,” she suggests.

3. Set gift spending limits

When it comes to buying gifts, set a spending limit for each person, and make sure your gift list is as small as possible, says Lakhani. “This year, my wife and I have agreed on a budget to stick to and to focus on getting one gift for each other that we’ll enjoy,” he says. “We’re doing the same for our kids – it will help them appreciate their presents more.”

4. Gift pre-loved

Consider buying second-hand gifts, especially items like DVDs, books and toys – children, particularly younger ones, won’t know they’re pre-used and you’ll save a stack of money. “It might also benefit the environment, as you’re reducing waste,” Lakhani points out.

And preloved expert Rebecca Alford, of second-hand books website Wob (, says buying everyone in the family a second-hand book each will be a cheap but lovely gift. “In Iceland,” she says, “books are the most popular Christmas gift – and the Jolabokaflod (‘Christmas book flood’) tradition is to give everyone in your household a book on Christmas Eve, then spend the evening quietly reading with hot chocolate.”

5.Budget a year in advance

“You can think about setting up a budget for next year’s Christmas from the start of the year,” advises Mackay. She says budgeting apps let you set up lots of separate pots for your savings, and explains: “Spending for children in particular can be ‘lumpy’ – it tends to hit in the summer (holiday clubs), September (back to school) and Christmas. Having separate savings pots which you pay a little into each month can make it easier to manage these months when suddenly everything needs to be bought at once and budgeting gets harder.”

6. Be strong

All parents want to buy everything on their child’s Christmas list to see their delighted faces on Christmas morning. But Lakhani warns: “If you’re struggling to afford something for your children, don’t give in to pressure – buying them something might make you all feel better in the short-term, but it will cause more hardship over the long-term and means you can’t get what your child really needs, rather than wants, in the future.”

He says honesty is the best policy when talking to children about money,  and  suggests parents explain to children why Santa can’t afford many presents this year as soon as they can. “The earlier you have the conversation with your child, the better,” he stresses, “Make sure to pick a moment that isn’t immediately after work when you might be tired, or after a stressful event.”

7. Reduce subscription costs

Watching TV is a huge part of the festive season, but scaling back on streaming services like Netflix and Amazon could save precious pounds, says Alford. “Why not make a return to analog and bag some festive family classics on DVD that you can look forward to watching year on year?” she suggests.

8.  Look for real deals

Just like the rest of the year, watch out for festive discounts and use voucher codes whenever you buy online, advises Lakhani. He suggests also trying to get cashback on purchases, but warns: “Be careful of getting sucked into special offers on things you might like to have, but don’t actually need.”

9. Save on pre-made food

Instead of buying luxury ready-made foods, try making your own, says Alford. For example, granola can be a particularly expensive item on your regular food shop, but there are lots of recipes online to make this in big batches that will last throughout December and beyond. “Go for a Christmas flavour, like spiced orange, and your house will smell delicious,” she says. “Plus, you can save empty jars to fill and turn them into little homemade gifts.”

10. Try using a budgeting app

Research by digital marketing consultants ConsultMyApp( and app data provider APPlyzer ( has found the popularity of budgeting apps like Snoop, Plum and Emma has skyrocketed, with the App Store and Play Store reporting a combined 31% increase in budgeting app searches between March and October this year. “Focus on what’s important for you and your family and don’t try to do everything if money’s tight,”  advises Lakhani. “Budgeting beforehand can help accommodate extra spending.”

11. Make your own decorations

With a whole host of Pinterest and YouTube tutorials available, there’s no reason you can’t decorate your house or Christmas tree for under a fiver, says Alford. “Plus, an afternoon making decorations is a nice way to spend time with family too.

Origami is a stylish option which gives your tree a less tacky look than a lot of homemade decorations – use pages from old books, music sheets or magazines to make shapes including stars, santas or Christmas trees, depending on your level of ambition.”

12. Encourage the kids to get creative

Another good idea is to see if your children can make presents, suggests Mackay. “They can buy some nice boxes from a craft shop, decorate them and bake biscuits to put in these with a ribbon, “ she says. “Or they could buy a photo frame they can decorate, and pop a photo in. My mum always prefers things like this over shop-bought gifts.”

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