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It’s difficult to pay for Christmas out of December’s pay packet alone, so it makes sense to save up as much as you can beforehand. The earlier you start saving, the less you need to put aside each month. Even a small amount over a few months can make a big difference.

Setting a budget for Christmas

According to ASIC’s Moneysmart, the Average household expenditure at Christmas time is around $1,000.  This includes food, presents, travel and decorations, among other expenses.

For those of you who have no idea where to start with making a budget, we find making a list of family and friends you will be buying presents for is a great place, and then you can allocate an amount you would like to spend for each person.  Once you have figured out that amount, add it to your estimated food, travel and decorations budget and divide the whole amount by 12.  It will give you a monthly figure to work with and you can save monthly leading up to Christmas.


Decide where to put your Christmas savings

For small amounts the best place might simply be a coin jar. Make sure you transfer it into a savings account as soon as it’s built up to a tidy sum.  Maybe you already have a bank account that lets you set up a separate pot for your Christmas savings goal. If not, open an instant-access savings account.

Set up a Direct Debit or standing order to transfer the amount you’re saving into your Christmas account each month.

Ideas for new Christmas traditions

Pressure to please loved ones and to give children the perfect Christmas tops the list of reasons people overspend during the festive season. Consider starting some new Christmas traditions that the whole family can join in with and save some money along the way.  Instead of getting gifts, perhaps have a big family dinner where everyone brings a plate.  You could have a Secret Santa with a limit of $50 – $100. Another good tip from Money Advice Service is picking up Christmas essentials like crackers or decorations in the sales can mean big savings, sometimes around 50%. If you know what gifts you need to buy, it can help to pick up an item a month to help spread the cost and save you the hassle of shopping when everyone else is.