It pays to start saving now for a very merry Christmas

Christmas

may still seem a long way away (unless you’re one of those people who’s already counting down the days!), but it pays to start planning now. Last year, families spent around £820 on Christmas typically, previous research from VoucherCodes.co.uk and the Centre of Retail Research suggests. Many households will have put their Christmas on credit – but with some planning ahead, it may be possible to build a pot of cash and make savings here and there which will stop you forking out more than you need to. If you’re visiting loved ones this Christmas, for example, booking travel tickets ahead could help ease costs. Sarah Coles, a personal finance analyst at Hargreaves Lansdown, says: “Around one in three people end up putting Christmas on credit, which can prove expensive. Given that you have a bit of time until Christmas, you can use the opportunity to put some cash aside, and use a few tricks to boost your Christmas savings, so you can celebrate this year without breaking the bank.” Here are Coles’ top tips for building up a money pot...

1. Save money each month

Set up a standing order to put money into a savings account as soon as you are paid each month, so you’re not tempted to spend your savings.

2. Consider microsavings

There are a number of approaches you could take. Some banks allow you to round up each spend to the nearest pound and save the rest, while some apps regularly take small sums of cash from your current account and put them into savings for you. The idea is that they’re so small, you don’t miss the money, but large enough to add up.

3. Switch current accounts

Some current accounts offer interest rates of up to 5%, while others will give you a bonus for signing up – to kick-start your Christmas savings. M&S Bank, for example, will offer a £125 M&S voucher for switching, and another £60 voucher after you’ve stayed for six months.

4. Have a pre-Christmas clear out

Have a look through the cupboards for old presents and things you haven’t used since last Christmas. If you sell them, you could raise a handy sum.

5. Try trading down brands

If you buy branded goods, try the own-brands. If you buy own-brands, try the basic range. Alternatively, give a discount supermarket a try. You can cut your grocery bill by 10% or more and put the savings aside for Christmas.

6. Cut out the small luxuries

This doesn’t have to involve a major sacrifice, but if you were to drop a family takeaway once a week, a daily coffee, and a drink after work on Friday, you could put aside an extra £200 a month.

7. Start with a budget – not a wish list

Once you’ve established your savings strategies, you’ll have an idea of what you can afford to spend: This is where you start – not the big list of things you ideally want. If you don’t have enough cash, you can then decide to cut back.