How to save for Christmas 2023

Looking for Christmas savings tips? You’re in the right place.

As the costs of living increase, and rising interest rates push up mortgage repayments for many people in the UK, budgeting for Christmas has never been more important. This guide walks through ideas of how to save for Christmas, and why having a Christmas savings account can help.

Want to earn a return in multiple currencies? With Wise Interest, you can get a 4.70% variable rate on your GBP balance held in your Wise multi-currency account.

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Capital at risk. Current rates do not guarantee future growth.

Variable rate is based on 7 day performance as of 10 Aug 2023. This fund has returned an 0.93% annual average over the last 5 years, excluding Wise and fund manager fees. See full 5 year past performance of funds.

Why you should save for Christmas

Christmas is an expensive time of year. With the costs of Christmas dinner, and gifts - plus extra expenses if you’re planning on spending time travelling in the Christmas break - having some extra money set aside can make a family Christmas less stressful.

As rising interest rates in the UK push up the costs of borrowing, it’s even more attractive to save in advance if you can, rather than borrow and repay the costs of Christmas later. Even making small changes to set some money aside can mean January feels a little less stretched - and if you choose a Christmas savings account which pays interest on your balance, you may even be able to make your money go further by the big day.

How to Save for Christmas

Saving for Christmas can be a challenge, as day to day living costs rise. However, even setting aside a small amount in advance can help. Here are a few steps you might consider taking to save for Christmas in the next few months.

Step 1 - Work out how much you need

Saving for any occasion starts with setting a budget. Think about how much you’d ideally like to have to spend on Christmas, taking into account as many different expenses as you can think of. Everyone’s ideal Christmas looks different, but your budget might include costs set against:

• Gifts for family, friends and loved ones
• The extra costs of Christmas dinner, including entertaining if you’ll have guests
• Travel costs if you’re visiting people over the festive season
• Christmas party expenses or new clothes for nights out

The process of setting a budget can take a little time and thought. Work out who you want to give gifts to, and set a budget per person. If you’re catering Christmas dinner you may need to write a menu and come up with an outline budget for that. And if you need to travel to visit people over the season, you can check out ticket prices and fuel costs to get an idea of this additional expense.

Christmas savings tips: If your budget at this stage looks unachievable don’t panic.

Firstly, having the money set aside to cover some of your expenses is better than having none of the money set aside, so even achieving a smaller savings pot is a smart move. And secondly, at this stage, you still have options to trim the budget if you choose to.

Consider chipping in on group gifts, regifting or making homemade items to cut present buying costs, ask others to contribute to Christmas dinner to bring down the price per head there, and scour the internet for bargains for necessary travel and the gifts you’re dead set on buying. There’s lots of ideas and advice on line to give you inspiration on how to save for Christmas, so dig in and see if any work for you.

If you’re struggling to make ends meet, or if you’re already worried about debt, seek independent advice as soon as possible. The UK government suggests a range of debt and money management resources which is a good place to start.

Step 2 - Choose a way to set money aside

Now you know what you’re aiming for, you need a place to put the money you’re saving. Set up a Wise Jar or Christmas savings account with your bank, so the money you’re setting aside can’t be mixed in with your day to day spending accidentally.

Step 3 - Budget your weekly and monthly spend

Saving for Christmas might mean cutting back a little in the months running up to the big day. Take a look at your normal day to day spending, to see if there’s anywhere in your weekly or monthly spend you can make savings. This may be more or less difficult depending on your situation, but if you have ways you can reduce your outgoings without it cutting into essentials, this is the time to do it.

Christmas savings tips: If you cut discretionary spend, this is where to start. If you love to eat out or go out with friends, you may choose to entertain at home instead to save on cash. You might find you can save on groceries by looking out for offers, or spending left over amounts on gift cards or vouchers. Or you may decide the best idea is to up your income a little to create space in the budget - even clearing out your closet and selling some stuff online can make a big difference.

Step 4 - Put money away weekly where you can

Whatever you manage to save, count up weekly and transfer the money over to a savings account or Wise Jar. This keeps it separate from your day to day spending - and you’ll be able to track your progress as you go. Choose an account that pays you interest on the balance, and you could see your money grow, too - even better.

Step 5 - Use rewards programs to get extra benefits

One final Christmas saving thought - don’t forget to see if there are rewards programs out there which could help you either get discounts or earn benefits.

You might want to check out loyalty programs such as Tesco Clubcard®, or Lidl Plus® to claim rewards for food, drink and presents at your favourite store. Or if you have a credit card you can use to collect rewards or cash back, this might be a good option too. Just make sure, if you’re using a credit card for spending, to clear down the bill every period so you don’t end up paying more in interest and fees than you earn in rewards.

How to Save for Christmas With Wise Jars

Wise jars¹ are a handy way to save for a special occasion, holiday or a big purchase. If you don’t have a Wise account just yet, the good news is that you can open one with just your phone, by entering a few personal details and uploading an image of your ID and proof of address. You’ll then be able to add a balance, order a card, and start transacting.

Once you have a Wise account you can open one or more jars, and assign them names and emojis. Choose which of the 40+ supported currencies you want to save, and add funds when you want to. You can’t accidentally spend the money from jars using your Wise card, so even if you use Wise for day to day spending, your money is safely stashed away. Once you’re ready to access your jars, just switch the balance from your jar back to your main Wise balance for instant access.

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Saving With Wise Interest

Want to earn a return in multiple currencies? With Wise Interest, you can get a 4.70% variable rate on your GBP balance held in your Wise multi-currency account.

Capital at risk. Current rates do not guarantee future growth.

Variable rate is based on 7 day performance as of 10 Aug 2023. This fund has returned an 0.93% annual average over the last 5 years, excluding Wise and fund manager fees. See full 5 year past performance of funds.

Sources

Capital at risk. Growth not guaranteed. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you’re uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.