How to manage your budget and reduce financial stress in the build up to Christmas

This week marks International Stress Awareness Week 2022, an annual autumn event that aims to raise awareness about stress prevention, campaigning against the stigma associated with stress and mental health issues.

The link between our financial health and our physical and mental health is undeniable, and unfortunately the build up to Christmas can cause extra strain on households who may already be struggling to make ends meet. With traditions to keep up and presents to buy, there can be a pressure to spend beyond your means. In fact, our recent research into the cost of living crisis found that 10 percent of households plan to borrow money to pay for Christmas, birthdays, and other festivities. That figure rises to one fifth for families with three or more children.

However, there are plenty of ways to make the festive season special without incurring a financial hangover that outlasts the leftover turkey sandwiches. Getting organised and planning your budget in advance not only benefits your bank account, but helps you feel more in control of your money, and as a result, less stressed. Here are some of our top tips:

Work out a budget and stick to it

Even with the best intentions, it’s easy to overspend at this time of year. Everything adds up, and often it’s the last minute stocking fillers and impulse buys that can suddenly see you spending more than you’d planned to.

Of course, it’s even easier to go beyond your budget if you haven’t set clear boundaries in the first place. Work out what you can realistically afford to spend on Christmas, with other bills and outgoings to consider, and make sure you stick to it.

When you’ve worked out your budget, make a list of everything you need to buy, from presents, to decorations, to food shopping and travel expenses.

Keep a running total

It’s a good idea to keep a running total so you aren’t suddenly blindsided by the build up of little costs you’d forgotten about - especially if you have multiple bank accounts and need a clearer picture of your outgoings.

With busy lives to lead, dashing in and out of shops on lunch breaks or commutes becomes normal in the build up to Christmas, so keep a list of outgoings and don’t forget to include things like wrapping paper and sellotape that get thrown in the shopping basket while you’re queueing for the tills!

Have open and honest conversations

It’s natural to want to try and please everyone, especially for parents that want to give their children the perfect Christmas, but overspending on presents is one of the main reasons people go over budget, whether that’s buying presents that are too expensive, or buying for people ‘just in case’ they buy for you, to avoid any awkward scenarios.

Have open and honest conversations with family and friends to avoid unnecessary spending. This year in particular, many people are in the same boat and will likely welcome the opportunity to set realistic budgets, agree to forego gifts, or even swap to a secret santa system when it comes to present buying.

Be creative with presents

Many of us still have gifts we received last year that haven’t yet been opened. Think about what you may be able to regift, or browse charity shops or even car boot sales for presents that are not only cheaper, but also more original.

If you’ve got the time, why not consider something homemade instead? Not only does this cut your overall spend considerably, it’s also much more personal and shows how much you care.

Shop around

If you’ve got specific gifts in mind, don’t forget to shop around. Many companies will have Black Friday deals and other promotions that run at various times, so do your research and make sure you’re not spending more than you need to!

There are also sites like PriceRunner, PriceSpy and Kelkoo that compare product prices from online retailers, so it might be worth bookmarking these in your browser.

Look for discount codes and loyalty schemes

Online retailers are aware they need to compete for your business, so take advantage of this. Sign up to mailing lists that may include introductory offers and discounts, as well as personalised codes. Some companies also offer discounts if you refer a friend.

Coupons are another good way to save money, especially on your food shop. Check supermarket magazines and newsletters, promotions on food packaging, and don’t forget to make the most of reward points too.

Websites like SuperSavvyMe and CaringEveryday are also worth checking for coupons and discount codes.

Get cashback

Cashback websites pay you when you go through them to spend with retailers or providers so it’s essentially free money.

You can shop via a cashback site like Quidco, or some debit card providers also offer cashback. Check your banking app to see if there are deals before you shop.

You can also earn money back on your purchases by using a cashback credit card, but remember to pay back your full balance each month, or you’ll face interest charges.

This article from Which? explains a little more about how cashback sites work.

Plan your food shopping in advance

One of the biggest expenses for many households at Christmas, is food and drink, and yet so many of us will buy in more than we need ‘just in case.’ This is especially true for those of us hosting guests over the festive period.

Pre-planning meals, especially for those days in between Christmas and New Year as well, is a good start. Write a list of exactly what you need to cut down on food waste. This also helps you get organised and gives you time to shop around for the best deals.

Be careful with it comes to borrowing

Many online retailers offer the option to ‘buy now, pay later’ (BNPL). You may be familiar with services like Klarna that allow you to split payments for your purchases into several payments.

While this can be useful on the odd occasion it’s needed, such as for unforeseen cash flow issues, it’s wise not to rely on this. This just shifts the amount you owe and it can be easy to lose track of all these smaller payments and end up in debt further down the line. If you don’t have a plan, you could end up paying a substantial interest rate once your 0% interest period ends too.

While it’s better to avoid borrowing if it’s not necessary, if you feel like you need to take out credit, be sure to do your research when it comes to loans and credit cards, and read other people’s reviews first to see how other consumers have found these providers and products.

Check the details of your overdraft

With all the best planning in the world, occasionally we all end up going over budget. If this does happen to you, and you find yourself needing to go into your overdraft, make sure it’s authorised and that you’re aware of the interest rate and any other charges your bank applies to overdrafts.

Avoid an unauthorised overdraft completely, as this will likely result in higher charges.


We’re about to be bamboozled by Christmas adverts on television, radio and online and even those of us with the strongest of wills, is likely to be tempted into a little over spending at this time of year.

Making a few changes to your usual routine, and getting organised early could help you save a significant amount of money, help ease your financial worries, and put you in a better position come January. Happy shopping!