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According to the Bank of England, households spend about £713 more in December than in a typical month, which is 29% more. For households that already have debts, extra spending in December can make January repayments harder to manage. The average UK household had about £8,400 of consumer credit debt, excluding mortgages and student loans, in October 2025 (The Money Charity, based on Bank of England data).

Here are 10 ways to plan for Christmas costs.

1. Set a budget and a gift list

Work out how much you can spend after your rent or mortgage, bills and other regular costs. Then list everyone you plan to buy for and set an amount for each person. Starting early leaves more time to compare prices and makes last-minute buying less likely.

If you use a credit card for Christmas shopping and pay the balance in full by the due date, you won't be charged interest on purchases on most cards. Balances that aren't cleared are charged interest at the card's standard rate.

2. Save in a separate account

Paying a set amount each month into a separate savings account can make it easier to keep Christmas money apart from everyday spending. For example, £30 a month from January would build £330 by the end of November, before interest.

3. Earn extra money

Some people take on seasonal work, sell things they no longer use or do occasional jobs such as babysitting. Read more: ways to earn extra money before Christmas.

4. Understand the cost of payday loans

Payday loans, known as high-cost short-term credit, are expensive. FCA rules cap:

• interest and fees at 0.8% of the amount borrowed per day

• default fees at £15

• the total cost, including interest and fees, at no more than the amount borrowed

For example, borrowing £1,000 for 90 days at the maximum daily rate would cost £720 in interest, so you would repay £1,720.

By comparison, the Bank of England's average quoted credit card interest rate was 24.71% in August 2026. Credit-builder cards often have higher APRs.

If you're worried about paying for Christmas or managing debts, you can get free, confidential advice from StepChange, National Debtline or Citizens Advice.

5. Agree spending limits with family and friends

Some families agree to buy only for children, or to use a Secret Santa, where each person buys one gift for one other person within a set limit. MoneySavingExpert's Martin Lewis has promoted this kind of agreement as a "no unnecessary present pact".

6. Spread purchases through the year

Retailers run sales throughout the year, including Black Friday (27 November in 2026). Buying gifts in advance spreads the cost, as long as the items are ones you'd planned to buy. Price comparison tools such as Google Shopping can show whether a sale price is lower than elsewhere.

7. Review regular outgoings

Check your bank statements for subscriptions or memberships you no longer use, and work out your regular bills for December and January before you set your

Christmas budget. Hosting at home instead of eating out is one way to keep social costs down.

8. Plan food and decorations

Planning meals and checking what decorations and wrapping you already have can reduce over-buying. Leftovers can be frozen or used in later meals.

9. Use loyalty points

Some retailers' loyalty schemes let you collect points through the year and spend them at Christmas. For example, when we checked in October 2026, the Boots Advantage Card earned 3 points (worth 3p) for every £1 spent. Schemes and point values change, so check the current terms.

10. Think before buying in the January sales

Sales can save money on things you'd planned to buy. Buying things you hadn't planned on adds to January spending, and that's when many people are also paying off December's costs.