Christmas shopping: tips for avoiding stress and debt

It might not seem very Christmassy, but setting yourself a spending budget can make all the difference. 

You don’t need to create your own complicated spreadsheet – instead, there are plenty of tools available online, such as this one from MoneySavingExpert. 

Once you have budgeted for bills, living costs and other repayments, you’ll know how much you have left over. 

Once you’ve set your budget, just remember to stick to it!

Many people feel a lot of pressure at Christmas to please their loved ones, especially demanding young kids. 

But if you’ve set your budget and can’t afford to spend much on a gift for a friend or family member, then it can help to talk to them first. After all, they might be feeling similar and want to cut back on their spending. By talking, perhaps you could agree on a small budget for Christmas presents? 

With some people, you might decide you simply don’t need to get each other gifts. Or, among an extended family, you could agree to just buy presents for children.

Alternatively, you could organise a Secret Santa with a group of friends. Agreeing a small budget and then buying a gift can work well.

Talking to friends and family about money and spending can be awkward or difficult, but it’s well worth a try. Money Helper, the online advice service, has some tips for talking to your friends and family about money.

Start planning for Christmas as early as possible - think the January sales! 

It can require a lot of willpower to make festive purchases in January – when you’re ready to move on from Christmas - but it can be a great time to pick up festive essentials such as decorations and wrapping paper at a discount.

Don’t stop there though. Continue to seek out discounts throughout the year so by the time you reach November, you’ve already bought most of your Christmas gifts.

Buy Now Pay Later (BNPL) schemes are becoming an increasingly popular way to spread out the payments of large purchases. They can be appealing as you don’t have to shell out the entire cost at once. 

But it’s easy to over-do it as you can lose track of how much you are spending. In fact, more than two-fifths (44%) of UK adults who used a BNPL scheme to fund their Christmas shopping last year were concerned about their ability to repay.

The research by Comparethemarket.com, which surveyed more than 2,000 people in January, showed that 36% of BNPL users saw it as a way to spread the cost of Christmas over a longer period. The average amount spent using BNPL schemes during Christmas 2020 was £211, slightly up from £201 in 2019.

When used carefully, BNPL schemes can be helpful. However, they can also encourage unnecessary spending and nearly a third (32%) of survey respondents felt it made them spend more than they usually would, while nearly half (44%) bought more extravagant gifts.

So, if you do use them, take care and be sure to keep track of how much you are spending.

Try using a cashback site when you shop for gifts online. Every time you purchase something through one of these sites - which are free to sign up to - you will receive a small payment as commission. 

Schemes such as Boots’ Advantage Card or Superdrug’s Beauty Card offer points that you can use in store. Others include Waterstones Plus and Paperchase Treat Me.

Some are better than others, so do your research. Consumer group Which? looked into these schemes and found you can save between 50p and £10 for every £100 you spend with loyalty schemes, but savings can be cancelled out if the shop's prices are higher than its competitors.

Its conclusion was that you probably shouldn’t change your shopping habits just to earn points. Although if you already use a shop, then there’s no harm in signing up to a loyalty scheme and taking whatever benefits you can.

Some retailers will offer you a discount on your first purchase if you sign up to their email newsletter. It’s well worth it, as you can always unsubscribe straight after having taken advantage of the code. 

You don’t have to be a new customer to get a discount though. There are plenty of deals available and helpful sites like MoneySavingExpert bring together lots of codes and vouchers in one place so you can pick and choose which ones to use. 

If you’re doing your Christmas shopping online, then don’t just buy from the first site that comes up on Google. 

Instead, find out if you can get a better deal elsewhere. Thankfully this doesn’t mean checking each website one by one. Instead, you can find a price comparison site to do the job for you. Try Google Shopping - you simply search for the product you want and click to compare prices. It trawls a range of retailers including the likes of Amazon and eBay.

If you know exactly which shop you plan to use to buy something, then here’s a way to save a few pence: buy a gift card at a knock-down price. 

Sites like Cardyard buy gift cards off people and then sell them on at a reduced price. Most gift cards are sent by email as e-gift cards. 

Second hand is most definitely not second best. As well as saving money, buying used is so much more sustainable. 

As well as the likes of Oxfam Online or eBay, try Amazon Warehouse - yes, that Amazon - which sells pre-owned, used and open boxed products. 

Similarly, if you have baking or crafting skills, a handmade gift can save you money and come across as thoughtful.