What’s the best way of saving for Christmas?
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How do I save for Christmas?
If you want to save money for Christmas*, the first step is to set a budget. In the UK, we spend an average of £727** on gifts, decorations and food, which is two-weeks’ wages based on the average salary.
When planning your budget, consider how many gifts you’ll be purchasing, and allocate an amount for each. If it’s your turn to host Christmas celebrations, you may well also want to factor in food, drink and decorations.
Next, work out how much you can put away each month until Christmas. For example, if you start saving £150 each month from August, you could save £750 by December, which is over the average spend and might leave you with a little flexibility.
When considering how much you want to save each month, it’s best to be realistic and only commit to a manageable amount. Once you know you can manage your monthly bills and outgoings alongside your Christmas savings, you may even be able to save a little more.
5 tips for saving for Christmas
To increase your Christmas savings and boost the budget for your festive fun, our top tips for saving for Christmas include the following:
1. Eliminate unnecessary presents
While it would be wonderful to purchase gifts for everyone in your address book, this simply isn’t realistic, or affordable for the majority of people. You can make saving for Christmas easier by eliminating any unnecessary spending, or by agreeing a maximum spend limit with friends and family. Making a list of people you’re buying for and what you want to buy them will help you focus just on what you need to buy, and prevent the temptation of purchasing unnecessary gifts.
2. Consider purchasing online
There’s something festive about high-street shopping at Christmas, but a more cost-effective option might be to buy online, where prices are often cheaper than those found on the high street. (And ordering online also means no crowds, traffic jams, or car park charges.)
3. Book travel tickets in advance
It goes without saying that millions of people travel at Christmas time. Whether it’s for reuniting with far-flung family members or swapping fireside eggnogs for poolside cocktails, travel costs are often an integral part of the Christmas period. It’s almost essential to book tickets in advance to avoid peak costs. Airlines and rail operators often have early-bird offers, but you can sometimes get last-minute deals if you’ve left it a little late.
4. Sign up for email alerts from online stores
Signing up to retail newsletters can mean an influx of unwanted emails, but during the festive period, stores often reward customers with exclusive access to deals, as well as member-only sales and voucher codes.
5. Allocate a day for your Christmas shopping
One of the main reasons for overspending is last-minute panic. Consider setting a date aside (that’s earlier than Christmas Eve!) so you can take your time. This will help you keep track of your spending, and make better purchase decisions. It’s also a good idea to write a gift list so you avoid the temptation of buying unnecessary extras.
When should I start saving for Christmas?
It’s never too late (or too early) to start saving for Christmas, in fact, it’s always best to consider saving well ahead of time. The earlier you start saving for Christmas, the more interest you can earn on your savings.
What’s the best Christmas savings account for me?
If you want to maximise your savings and enjoy a stress-free festive period, you might want to open a dedicated Christmas savings account. Saving into a notice account or fixed rate bond could help ease the burden of Christmas expenses and even give a little boost to your celebrations.
A notice account is a great option if you want to save money for Christmas but might need to access your funds in the meantime. Notice accounts typically offer competitive variable interest rates, and allow you to withdraw your money by giving your savings account provider notice, usually up to 90 days, that you want to make a withdrawal.
Fixed rate bonds
Typically offering a competitive, fixed rate of interest, fixed rate bonds might be right for you if you have a lump sum of money that you can lock away for a set period. If you’re saving for Christmas, you might want to compare six month and one year fixed rate bonds.
If you don’t celebrate Christmas, you may still want to take advantage of the exclusive shopping deals the festive period usually provides. You could use the 25th December as a savings deadline, or splash out in the January sales with the money you’ve saved.
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