This is why you should start budgeting for Christmas 2021 Now

Christmas is less than two weeks away so you may be questioning what I am talking about Christmas 21.

You’re probably right if you think I am mad. BUT if you have found this Christmas has caused you more anxiety than joy and the growing amount of hard-earned money spent from this months paycheque is causing you dread. Then like me you will want to begin planning for next christmas as soon as possible!

If you have read my post about budget forecasting then you will know I am all about the big picture. According to the Bank of England the average household spends an extra £800.00 in December! I don’t know about you, but I don’t have this kind of money just sitting around to spend. This is why you should probably start looking at making monthly instalments into a Christmas fund now.


How do I work out how much I should be saving?

There are a few things that you should be looking to include in this allowance, there are  three categories which need to include in your Christmas fund.

1. Gifting – From this years spending you will have a good idea of your average spend for each individual in your gifting list. For next year you want to look at what you have spent, decide if you are happy with this figure, or if you should look at reducing your gifting list, maybe you just need to cut back on unexpected gifting.

As me and J work towards our mortgage goal we know next year we will be cutting down on our gifting. This can leave you feeling guilty that the presents you give are not equal to the appreciations you owe each person. If you find yourself in a similar situation I always find it best to be clear and offer my time or gifts of sentimental value instead – such as organised activities or a lovely in budget dinner. You can also use “can we just buy gifts for the children” Or “Can we do a single family member Secret Santa” to allow you to focus your gifts without dropping the monetary value.

2. Celebrations – 2020 wasn’t a very social year for us and this Christmas was no different. We have managed to make substantial savings in this department, however next year may not be the same.

We budget for our nights out with friends; whether they be meals, drinks or any other type of social event we will set a limit for each activity which is likely to occur. This would also include travel expenses such as a train ticket into London or a Flight if this is something you require to see family at Christmas.

3. Festive Food and Decorations – This is fairly self-explanatory, however I know I will be hosting Christmas for my family next year which will mean lots of beverages, a spruce up of decorations and a large increase in the meat purchased.


How to calculate monthly savings

Personally, I aim to have my saving figure by the 1st November, therefore, I would break my budget into 11 instalments.

If we use the average spending in December as our goal figure we would divide £800.00 by 11 monthly payments which works out to just over £72 a month starting in January.

I would count my Christmas budget as one of my sinking funds and therefore would have this £72 automatically placed into a saving account for me to withdraw in November. Out of sight out of mind!

The festive season should be full of fun and cheer don’t let it get dulled down by the financial side of things. Save now so next year your biggest problem will be deciding what outfit you should wear on Christmas Day!

How do you approach Christmas saving? Let me know your tips in the comments below.



9 thoughts on “This is why you should start budgeting for Christmas 2021 Now

  1. You are sooo right! At first, I thought, “Well, that’s interesting to plan ahead. But why so early?” But you’re right! This year, shopping for gifts online was such a headache, so it makes since to start early. You’re a genius lol.

    Liked by 1 person

  2. very smart post! Indeed saving for Christmas is a good move esp if you host it. I budgeted my gift list along way with making it and I even was smart enough to put a spot for extra in there in case I have to substitute or (more likely if you know me well) if I forget about someone and need to make a present asap.

    Liked by 1 person

  3. It’s always better to start saving as early as now so that you can fully enjoy the holiday season! Thank you for these tips.


  4. What better time that now…right? I don’t know if I have the discipline or even any clue of what I am doing tomorrow more or less next year. But if 2021 returns to “normal” post pandemic then we will definitely return with full force and lots of celebrating. But that means extra cost. So what better way than starting a dedicated savings account than now.

    Liked by 1 person

  5. Mitigate risks of life better: When you begin saving early, you can make sure that you have enough financial support in the form of emergency fund to counter any emergencies of life. This also helps you feel more secure and puts you away from any financial distress.

    Liked by 1 person

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