With Halloween and Bonfire Night out of the way, it’s almost time to get the Christmas decorations out once again. For the majority of us, the festive period is a season of joy, love, and togetherness – but for many others, it also brings financial stress. And regardless of whether you’re financially comfortable or struggling with debt going into Christmas 2024, that age old question rears its all too familiar head once again – how much should I spend on Christmas gifts for friends and family this year?
Here at MoneyPlus, we hear you! Knowing how much to spend on Christmas gifts can be tricky, especially with the pressure to make the holiday magical when little ones are involved. With this in mind, in this guide we explore how much people typically spend on Christmas in the UK, suggest practical budgets, and provide actionable tips to help you enjoy the festive season without financial strain.
How much do people spend for Christmas?
Unsurprisingly, the festive period is one of the most expensive times of the year for families in the UK, with average spending higher than any other time of the year. Indeed, according to financial comparison site Finder, an estimated 48 million UK adults plan to buy Christmas presents in 2024, with the average Brit expected to spend just short of £600 (£596) on gifts.
Of course, this should not influence how much you decide to spend. Remember – while some families may choose to spend more, others will find ways to create the perfect Christmas on a tighter budget. Like everything when it comes to personal finances, the key takeaway is that there’s no one-size-fits-all approach to Christmas spending. Understanding where your money goes and setting priorities is essential to ensuring a stress-free festive season.
How much should you spend for Christmas?
It may be a cliché, but it’s true – Christmas is not about how much you spend, it’s about spending quality time with loved ones and creating memories with the people who matter most to you. It’s important to remember this when coming up with a Christmas budget this year.
However, if you are really struggling to decide what is an appropriate amount to spend on gifts, start by looking at your own financial situation. Review your monthly budget, as well as any savings you might have made, and identify how much disposable income you can allocate towards Christmas expenses this year without going into debt.
A good rule of thumb is to try and not spend more than between 1-2% of your annual income on Christmas. For instance, if your yearly income is £30,000, aim to keep your Christmas spending between £300 and £600. By doing this, you can make sure you have a budget to play with without becoming financially irresponsible.
How much should you spend on Christmas gifts per child?
Again, this is a tough question to answer and ultimately comes down to a number of factors, including the total budget available to you and the number of children you are buying for. However, according to VoucherCodes’ Shopping for Christmas Report 2024, the average person in the UK will spend £119.45 per child. However, nearly a quarter (23%) will spend more than £200. The most important thing to remember is to avoid feeling pressured to match other parents’ spending. You’d be surprised – children value quality time and thoughtfulness over excessive material gifts.
Whatever your budget, using the ‘four-gift rule’ can be a good way of deciding how best to spend your allotted amount on each child. This simply involves splitting each child’s present budget and buying:
- something they want
- something they need
- something to wear
- something to read.
This simple trick can be a practical way to keep spending under control while still ensuring that each gift is thoughtful and meaningful – without any of your kids ending up disappointed!
How to avoid Christmas debt
Overspending during the festive season is all-too-easy and can lead to financial stress in the New Year. However, with some thoughtful planning, it’s possible to avoid debt and still enjoy a magical Christmas, regardless of your initial budget. Check out our top tips below to keep you out of the red and in the black this festive season.
Set a realistic budget
We have discussed this already above, but this point cannot be stressed enough. Before doing anything else this Christmas season, determine your overall budget – including gifts, food, decorations, and travel. Remember, as a rule, this should be between 1-2% of your total household annual income. Once you have a realistic figure, break it down into specific categories and stick to it. Tracking your expenses throughout the period can also help make sure you don’t overspend.
Use cash or debit cards
Credit cards have their place, but they can be a dangerous tool during the Christmas period. With this in mind, try to avoid relying on credit cards for Christmas shopping unless you can pay off the balance immediately. Using cash or a debit card helps you stick to your budget and reduces the temptation to overspend.
Limit gift-giving circles
If you’re part of a large family and/or have a big friendship group, the thought of Christmas can be financially terrifying! For this reason, discuss gift exchanges with friends and family to limit spending. Think about doing a Secret Santa this year, or setting a spending cap on presents to make it fair and affordable for everyone involved.
Do your research and make use price comparison tools
When shopping online, use price comparison websites and apps to ensure you’re getting the best deal on each item you’re looking to buy. Small savings on each gift can add up to significant reductions in your overall spending.
Focus on the festive spirit
As discussed above, Christmas is not about material items, it’s about spending time with loved ones. If you’re worrying about your spending, talk to your loved ones about this and come up with festive alternatives to expensive gift-giving or pricey meals out and Christmas parties. Activities like festive game nights, a quiet drink in the pub, or a festive walk are sometimes all you need to create cherished memories without breaking the bank.
Manage Christmas debt with expert support
Despite our best intentions, overspending can happen – especially at Christmas time. If you find yourself struggling to manage post-Christmas debt, MoneyPlus is here to help. Our debt management services – from Debt Management Plans (DMPs) to formal Individual Voluntary Arrangements (IVAs) – can provide personalised solutions to help you regain control of your finances.
For more practical saving and budgeting advice, browse our financial tips and advice hub or simply get in touch with our team. Don’t let financial stress cloud your New Year – support is just a call away.
