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The cost of Christmas set to be £1,500

The cost of Christmas set to be £1,500

Category: Money Saving

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

How much are you planning to spend this festive season? Well, according to research from American Express, it could tot up to a staggering £1,551 – an increase of £51 from last year - so it's time to see where savings could be made!

Where does all the money go?

The £1,500+ total may seem like a sum that you'd never spend in just a few weeks, but breaking down the figures shows that it may not be that far off. The total includes everything from the traditional expenditure on gifts (£341) and the big festive food shop (£75), to the cost of hosting a Christmas party (£90) and new clothes for the season (£69), with Christmas jumpers and a new outfit for the office night out often high on the list of priorities.

And what about festive getaways? An increasing number of Brits are enjoying trips to Christmas markets both in the UK and abroad, with the average spend coming in at £457 for breaks outside the UK - the largest expense on the list - and £255 for festive trips on home soil. After you add in the cost of travelling to visit loved ones (£88), Christmas catch-ups (£80), festive entertainment such as pantomimes (£60) and those new decorations (£36), you'll soon see how quickly the total can rise - are you factoring these kinds of costs into your festive budget?

Christmas on a budget

If it sounds like far too much to spend in the next few weeks, fear not - there are ways to cut the cost! Setting a budget is key, and although it can be difficult to stick to at times (31% admit to setting a budget but not sticking to it), it could be the best possible way to keep your costs in check. After all, keeping track of your festive spending can mean the difference between having a wonderful Christmas time and starting the New Year with a financial hangover, so it's important to be on the ball.

One way in which you could be particularly savvy is by saving up reward points. American Express found that 25% of respondents use loyalty points, rewards or cashback to cover some of their expenditure, with 44% specifically saving up those points throughout the year to make the most of their Christmas shopping - and they expect to cut their festive shopping bill by an average of £60 in the process. And what about cashback credit cards or current accounts? They're another way to boost your finances, and could be perfect for this time of year.

  • Do your research. It's tempting to snap up that perfect present as soon as you come across it, but it could pay to take a bit of extra time to shop around online, as you could well find it cheaper elsewhere. In the same vein, make sure to check cashback websites before you complete your purchase, as you could get a bit of money back from something you were going to buy anyway. Then you'll truly be getting something for nothing!

  • Take advantage of discounts. The nation is about to be hit with a Black Friday frenzy, with many retailers already offering great discounts on many of their products - and the bargains could be coming in even faster over the weekend. Again, this is where research comes in so you can take advantage of the best prices available, and make sure to be on the lookout for vouchers as well.

  • Get creative. Making your own decorations, cards and even gifts can save a small fortune, and the internet can provide you with a wealth of ideas to suit all abilities, from recycling last year's cards into homemade gift tags to collecting pinecones for the Christmas tree. Not only could you cut the cost of your festive spend dramatically, but you'll be adding a personal touch to the festivities, and that can make the whole event feel even more special

  • Book your travel arrangements early. Whether you're travelling to visit relatives or heading off on a festive mini-break, booking your travel tickets in advance can save huge amounts of cash - and the earlier you do so, the more you'll save!

  • Make loyalty pay. Many of us build up loyalty points throughout the year by shopping at our favourite retailers, and there's no better time to put them to good use than now! From Nectar and Clubcard points for the festive food shop to spending your accumulated Boots points on their 3-for-2 goodies, now's the time to see just how much you could save.

  • Use plastic - but use it wisely. If you need to use a credit card to cover part of the festive spend, look for a way to make it work harder for you. A 0% purchase card can be a great choice if you're looking to spread the cost, or alternatively, get something back from your festive spend with a cashback credit card. For example, American Express's Platinum Cashback Everyday Credit Card, which offers 5% cashback for the first three months, could earn shoppers up to £100 in cashback, and if you make sure to pay off the balance in full when the statement arrives, you won't have to pay interest on it!

"Our research shows Santa's sack will be brimming with presents this year, but it's great to see so many shoppers taking advantage of early sales and saving up rewards points to avoid costs adding up," commented Jenny Cheung, director at American Express. "Using a card with cashback can help you enjoy even more of the Christmas season by knowing you are making the most of your money, and you can get something back for each present you put under the tree."

What next?

Compare the top credit cards for your festive needs

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.