Why it pays to start your financial planning for Christmas now

While December may still seem like a long way off, now could be a good time to start thinking about how you’ll put money aside for Christmas.

Saving a little and often over the next few months can seem less painful than trying to find a big lump sum of cash much nearer the time.

Hopefully, a bit of advance planning to get Christmas all wrapped up could also mean needing to rely less on debt over the winter months too.

You’ll also have time to come up with and set a budget, which will be handy when working towards savings goals and making sure you’re not overspending.

YouGov research last year indicated that people spent £600 on Christmas 2022 – which can be a significant amount to find from just one month’s worth of pay if you leave it very close to the time to start saving up.

If you start your Christmas planning early, you won’t be alone.

A recent survey from American Express revealed that three in 10 (30%) adults who celebrate or shop for Christmas have already made a start on this year’s purchases, stocking up on gifts, decorations, cards, and even food and drink.

Emma-Lou Montgomery, associate director for personal investing at Fidelity International suggests: “Use the next couple of months to evaluate your saving and spending habits and consider your credit cards and loans when you begin to plan for the festive season. This will help you spot where you can make cutbacks and help you realistically budget for this year’s gift giving.”

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She suggests making some of your savings automatic, so you’re putting small amounts away over time without having to think about it.

“Sometimes the biggest barrier to saving is the task of manually moving money,” says Montgomery.

“Sidestep this problem early by setting up an automatic withdrawal from your account to either a savings account or a dedicated Christmas money pot instead.

“If you have a festive budget in mind this is especially useful, as you’re easily able to save a specific amount every week or month with minimal stress.”

She also says you should make the most of rising savings rates in the higher interest rate environment.

According to, the average easy access savings account rate on the market surpassed 3% in early September, with easy access rates having hit their highest level in around 15 years.

“It’s worth looking into different savings accounts or cash ISAs as a way of maximising your money for the next few months,” says Montgomery.

She also suggests looking out for perks and rewards being offered by banks and other financial services providers, such as cashback or discounts on spending.

If a bank is offering cash for you to switch current account, you could also use the money from that to give your Christmas savings pot a boost.

Montgomery also suggests setting up a savings account as a gift for children, that will grow with them.

She continues: “You can contribute up to £9,000 into a child’s ISA every year where the investments can grow, free of tax, until the child is 18 without affecting your own ISA allowance.

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“At 18 years old, the Junior ISA can be accessed and spent, or left to automatically convert into a regular, adult ISA that will carry on growing.”

Ban Mahsoub, spend and save director at Tesco Bank, adds that you can ease the pressure on your Christmas savings pot by ticking items off your festive gift list as and when you see them in sales.

She says: “Sorting this early will allow you to make the most of seasonal sales, as there are often perfect gifts available throughout the year which you can buy and store away for the gifting season.

“By doing a bit of shopping now, you’ll also be able to spread the cost across a few months and build back your spending in a shorter amount of time.”

Retailers’ loyalty schemes should also be looked into to see where you can save some cash, she adds.

Be sure to check whether you could get some money back on any purchase through cashback websites, such as TopCashback and Quidco, Mahsoub says.

She adds: “Try Honey too – it’s a handy tool that finds the best deals available online for you.

“And don’t forget, paying online with a credit card gives you extra protection if something goes wrong with your purchase.”

Under section 75 of the Consumer Credit Act, you may be able to raise a claim against your credit card company for a breach of contract or misrepresentation by the firm which was meant to be supplying the goods or services.

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