10 smart ways to enjoy the festive season without breaking the bank

The festive season is a time for joy, connection and celebration – but it can also put pressure on your finances.

In fact, Brits are expected to spend an average of £802 per person on the Yuletide period, whether that’s food, travel or gifts – which works out to an eye-watering £41.6bn in total.

While that figure is less than previous years – largely due to the cost-of-living crisis – it’s still an added expenditure; and many people will want to celebrate this year without overspending – and with good reason.

Stretching our finances doesn’t just impact our wallets, it affects our mental health too.

Research shows that money worries can lead to anxiety, poor sleep and feelings of guilt.

So, how can you keep the festive cheer without the financial fear?

Here are 10 practical tips to help you enjoy this special time while staying financially healthy.

1. Start with a realistic budget

Before you buy a single gift, take stock of your finances.

List your essential expenses – rent or mortgage, energy bills, travel – and work backwards to see what’s left for festive spending.

If you’re hosting this year, ask your guests to contribute a dish or drinks. This is a simple way to share costs and reduce stress.

It’s not for you to have to shoulder the whole expense.

Pro tip: Break your budget into categories – gifts, food, travel and entertainment – and stick to them. This helps avoid impulse purchases and keeps spending transparent.

2. Shop early and plan ahead

January might seem a little while off, but it’s actually just around the corner – and so too are the sales that come at that time of year.

During these sales, it’s a good idea to stock up on timeless items like decorations or cards for next December.

If that feels too soon, keep an eye out for discounts throughout the year.

Buying early helps you spread costs and avoid last-minute splurges.

Why it matters: Early Christmas shoppers typically save around £120 by purchasing before mid-December.

3. Make the most of Black Friday and Cyber Monday

Black Friday and Cyber Monday can be a great opportunity to grab a bargain – if you shop smart.

Try to avoid impulse purchases if they aren’t necessary. The best way to do this is by creating a list of essentials that you need to get for the period and stick to it.

Most retailers will extend their deals for a week, or even longer, so there’s no need to rush.

4. Maximise loyalty rewards

Loyalty cards can make a big difference during the festive season.

If you’ve been collecting points or cashback throughout the year, December is the perfect time to use them.

These rewards can help reduce the cost of gifts, food and other essentials, easing the financial pressure at this time of year.

5. Be honest about your limits

Christmas isn’t about buying gifts for everyone you know. If money is tight, be upfront and honest about it, there’s no shame in it whatsoever.

Suggest a ‘no unnecessary presents’ pact or, for those who celebrate Christmas, organise a Secret Santa with a spending cap.

Most people will appreciate the honesty and (probably) the relief of not having to reciprocate.

6. Get creative with DIY gifts

Homemade gifts are thoughtful, sustainable and budget-friendly.

Whether that’s baked treats and personalised crafts, creativity can go a long way.

Even wrapping can be fun – swap expensive paper for brown paper and decorate it with doodles or festive stamps.

You could even make it a family tradition and turn gift prep into a joyful activity – not to mention it’s more sustainable as well.

Why DIY wins: It’s not just cheaper, it’s more personal. Studies show that handmade gifts are perceived as more meaningful than store-bought alternatives.

7. Regift thoughtfully

Let’s be honest for a moment. The likelihood is that we’ve received a gift that wasn’t quite what we wanted.

But instead of letting them gather dust, keep a ‘gift cupboard’ and make a note of who gave it to you.

You can then give it to another person who will enjoy it more.

So long as it’s not the person who gave it to you!

8. Rethink the essentials

Do you really need crackers on the table, more tinsel to put around the house? Probably not.

Skipping on non-essential items could save you a few pennies, which can go a long way if your finances are already stretched.

Focus on what matters most: the people around you and the memories you make together.

Sustainability bonus: Cutting down on unnecessary items reduces waste, making your festive celebrations more sustainable.

9. Choose time over money

It’s always nice to have a gift to open on the day but, in reality, gifts don’t have to be physical.

Why not offer your time instead? It could be a day out or a dinner at yours.

Quality time is priceless and it’s especially important at this time of year when there are more than three million Brits who are lonely throughout winter.

Ideas: Plan a festive walk, host a movie night or volunteer together. Did you know that you can volunteer at your local parkrun on a Saturday morning?

Find out more about how to get involved from Vitality Ambassador, Jos Buttler.

10. Start saving for next year

It might feel a bit early to be planning the 2026 season already.

But once the festivities are over, it might be a good idea to start putting away a small amount of savings each month.

Even £20 a month adds up to £240 towards your festive fund and could make all the difference.

Pro tip: Set up a direct debit on a monthly basis so that you don’t have to think about it each month.

Enjoy the season

This time of year should be the most wonderful time of the year and money worries shouldn’t cloud that for you.

By planning ahead, being savvy with your spending and thinking outside the box for your gifts, you can enjoy the festive season while reducing the financial strain.

Related: Why talking about money matters for your mental health in 2025