How to save money at Christmas 2026 without cutting out the fun

Christmas is getting more expensive again, and the particularly annoying thing is that we're apparently not even getting more Christmas for our money.

New research from VoucherCodes predicts that British shoppers will spend a record £93.76 billion over the six-week festive shopping period in 2026, an increase of 2.9% on last year. But while the amount we're spending is going up, the number of things we're buying is expected to fall slightly, which is rather a depressing return on our festive investment.

The report also forecasts average spending of £1,411 per shopper over the festive period, nearly £40 more than in 2025. That's not a recommended Christmas budget, thankfully, but it does demonstrate just how expensive the season can become once you've factored in presents, food, celebrations and all the other things that don't necessarily make it onto your original shopping list.

And that's where Christmas spending gets particularly interesting, because while it's easy to blame expensive presents and enormous food shops, it's often the smaller decisions we make along the way that turn a perfectly manageable Christmas into an expensive January.

The good news is that saving money doesn't have to mean cancelling everything you enjoy, but rather being a little more deliberate about which bits of Christmas you actually want to spend your money on.

Why is Christmas so expensive in 2026?

According to the VoucherCodes Shopping for Christmas Report, total UK festive retail spending is expected to rise from £91.12 billion in 2025 to £93.76 billion in 2026.

The amount of goods purchased is actually expected to fall by 0.2%, suggesting that much of the increased spending is being driven by higher prices rather than people filling their baskets with more things.

Gifts remain a major expense, with spending on presents forecast to reach £11.97 billion. Toys, electronics, clothes and cosmetics are among the biggest categories.

Other research suggests we're feeling the pressure. The Institute of Practitioners in Advertising (IPA) found that 45% of consumers expect to feel more financially anxious this Christmas because of rising costs, yet almost half say they don't intend to cut back.

It makes sense. Christmas is full of traditions, expectations and people we want to make happy. But there are ways to keep the bits that matter without paying for absolutely everything that comes wrapped in a festive marketing campaign.

10 ways to save money this Christmas

1. Do a Christmas spending audit, including the bits you forgot you bought

Most people can make a reasonable guess at how much they'll spend on Christmas presents, but I'd wager far fewer could tell you what they spent on everything surrounding them last year. The school raffle, the Secret Santa for a colleague you barely know, petrol to visit family, the emergency wrapping paper and the extra supermarket trips all have a habit of escaping the original budget.

Before you decide what Christmas 2026 is going to cost, have a look at your bank transactions, online shopping history and calendar from November and December last year. You might discover you spent £200 on presents but another £150 on things you barely remember buying, which is quite a lot of money to lose track of in the name of festive cheer.

I'd separate those forgotten expenses into their own little pot this year rather than hoping they'll somehow be absorbed by your normal spending. You'll have a much more useful picture of what Christmas costs you, and it might reveal a few expenses that weren't actually worth repeating.

2. Give your Christmas budget a hierarchy, not just a limit

I think we sometimes approach budgeting as though every expense has equal value, when the reality is that some things are absolutely worth the money and others are only happening because we've always done them.

Rather than starting with what you need to cut, divide your Christmas spending into three categories: the things that make Christmas special for you, the things that would be nice if there's room in the budget, and the things you could happily live without.

For one family, an enormous Christmas dinner with all the trimmings might be sacred, while buying new decorations every year is a complete waste of money. Someone else might be perfectly happy eating a supermarket pizza on Christmas Day if it means they can afford the train fare to spend the week with people they love.

The point is to spend the money where you'll actually feel the benefit, rather than giving equal financial importance to Christmas dinner and a novelty soap dispenser shaped like a reindeer.

3. Put expensive purchases through the Next Payday Test

One of my favourite ways to interrupt an impulse purchase is what I call the Next Payday Test, and Christmas is arguably when we need it most.

Before buying something expensive, imagine your next payday is further away than you expected and ask yourself whether you'd still be happy having spent that money. You don't necessarily have to abandon the purchase, but it forces you to consider whether that £80 present is comfortably within your budget or whether you're making a decision December Vix will love and January Vix will absolutely resent.

This matters particularly if you're paid early for Christmas, because a December salary arriving a week ahead of schedule isn't extra money, despite your bank balance doing a rather convincing impression of it. That pay packet still needs to cover everything until your normal January payday, which could leave you facing five or even six weeks between payments.

If something doesn't pass the test, consider whether you could buy a smaller version, split the cost of a gift with someone else or simply leave it until you've checked what your essential spending looks like.

4. Decide what you want before Black Friday tells you what you need

Black Friday falls on 27 November this year, and I'm all for using the sales to save money on Christmas presents, provided you're shopping from a list rather than allowing retailers to write one for you.

If you've been planning to buy your partner a specific pair of headphones and they drop from £80 to £65, that's £15 you can keep in your pocket. If you buy a £65 pair because they're supposedly reduced from £120, despite having no idea who you're giving them to, you've spent £65 you weren't originally going to spend and the retailer has had a considerably more successful Black Friday than you have.

Start keeping an eye on prices now, particularly for electronics, toys and appliances, where the advertised discount doesn't always tell the whole story. Price history tools can help you see whether something has genuinely become cheaper, and it's always worth comparing the final price including delivery rather than getting distracted by the biggest percentage on the screen.

I'd also be wary of turning Christmas shopping into a competitive sport where you feel you've failed if you don't get the absolute lowest price. A sensible price on something you already wanted is a win, even if somebody on the internet claims they got it for £3 less at midnight.

5. Stop spending money to unlock a saving

There is a particular kind of bargain hunting that I think deserves much more suspicion, and that's when we start spending additional money purely to qualify for a discount.

We've all been there, staring at an online basket that's £12 short of free delivery and convincing ourselves that adding another £15 item makes financial sense because we're avoiding a £3.99 charge. In reality, we've just spent an extra £11.01, but the little green message congratulating us on unlocking free shipping has somehow made it feel like a victory.

The same principle applies to three-for-two Christmas gifts, supermarket multibuys and loyalty deals where the reward only kicks in once you've reached a certain spending threshold. Sometimes these are worthwhile, particularly when they're products you already planned to buy, but the offer itself shouldn't be the reason you need them.

When comparing deals, I always try to bring the question back to what I originally intended to buy and what the cheapest way of getting that particular thing would be. It's not terribly glamorous, but paying full price for one item can be considerably cheaper than buying three things at a discount.

6. Have the awkward present conversation before somebody buys you a candle

If you've been exchanging £30 presents with the same group of friends for the past ten years, there's a reasonable chance at least one of you would be delighted to call time on the tradition, but nobody wants to be the first to suggest it.

October is an excellent time to have that conversation because there's still a good chance nobody has started shopping, and you can frame it as a way of making Christmas a little easier for everybody rather than an announcement that you've personally withdrawn from the festive economy.

You could suggest a Secret Santa with a proper spending limit, presents for children only, a charity shop challenge or putting the money towards an evening together instead. I also think there's something rather lovely about agreeing not to exchange presents and then actually respecting that agreement, rather than turning up with something small and accidentally restarting the entire obligation.

There's no shame in saying you'd rather spend £30 on seeing your friends than on guessing which scented candle they'd most enjoy receiving, particularly if everyone involved feels exactly the same way.

7. Price-lock the presents you already know you're buying

There's a difference between sensible early shopping and buying half the contents of a Christmas aisle because you've been told you'll regret missing out.

If there's a particular toy, book, perfume or gadget you know somebody wants, and you've found it at a price you're comfortable paying, it can make sense to buy it now rather than waiting for December when availability might be worse and delivery more expensive.

This is what I'd call price-locking, although the important thing is that you're locking in a price you're happy with, not assuming October is automatically the cheapest month to buy something.

Keep an eye on the returns policy because buying early can leave you outside the standard return period by Christmas, particularly if the recipient changes their mind or something turns out to be unsuitable. Some retailers offer extended Christmas returns, but there's no universal rule requiring them to do so.

I wouldn't use early shopping as an excuse to accumulate a secret cupboard full of emergency gifts, either, because there's a fine line between being prepared and discovering in January that you've spent £120 on presents for hypothetical people.

8. Shop for the Christmas dinner you're actually having

Christmas food shopping is one of the easiest places to spend money on a version of Christmas that only really exists in adverts, where seventeen relatives arrive looking delighted to eat every variety of stuffing and nobody has apparently had a snack since breakfast.

Before placing your order, work out how many people you're genuinely feeding, which meals you're responsible for and what people actually like eating. If the Christmas pudding went untouched last year and ended up lurking in a cupboard until Easter, you have my full permission not to buy another one out of respect for tradition.

I'd also look carefully at the cost per kilogram rather than the festive packaging, because supermarkets have a wonderful talent for taking perfectly ordinary products, putting them in a box with a gold snowflake and making them feel like essential Christmas purchases.

Frozen vegetables, supermarket alternatives and preparing some dishes in advance can all help keep the cost manageable, but I'd focus first on cutting food nobody wants rather than trying to make the Christmas dinner everyone loves as cheaply as humanly possible. There's no point saving £8 if it means replacing the one dish your entire family looks forward to with something nobody particularly enjoys.

9. Don't turn Christmas into a twelve-week programme of paid activities

One of the more recent developments in Christmas spending is the sheer number of things we're apparently supposed to squeeze into the weeks leading up to it, from light trails and Christmas markets to Santa experiences, festive afternoon teas and elaborate opportunities to drink hot chocolate in a themed environment.

Individually, plenty of these are lovely, but once you've added tickets, parking, food and the inevitable impulse purchase on the way out, a couple of family activities can account for a surprisingly large chunk of your festive budget.

I'd pick one or two paid experiences that you really want to do and build the rest of your plans around cheaper or free alternatives, whether that's a local lights switch-on, a Christmas film night with friends or heading out to look at the most enthusiastically decorated houses in your neighbourhood.

It's also worth considering what children actually remember from previous Christmases before spending a fortune on another experience, because there's every chance the highlight of last year's £70 outing was the hot chocolate you bought from a petrol station on the way home.

10. Treat your January bills as the first Christmas expense

If there's one thing I'd encourage everyone to do before spending a penny on Christmas, it's to work out how much money they'll need between their December payday and their first normal payday in January.

This is particularly important for anyone paid early over Christmas, because getting your wages on 20 December instead of 28 December can feel like a lovely little bonus until you realise you've got an extra eight days to make exactly the same amount of money last.

Start with your rent or mortgage, essential bills, food and transport, and ring-fence whatever you need for those before deciding how much is available for Christmas. If you're buying presents using credit or Buy Now, Pay Later, include the repayments in that calculation rather than treating them as a problem for future you.

I'm not against spreading costs where it's affordable and properly planned, but it's worth remembering that interest-free doesn't mean consequence-free, particularly when several relatively small repayments all arrive in January alongside the usual bills.

The aim isn't to spend the absolute minimum on Christmas or feel guilty about enjoying yourself, but to avoid making December so wonderful that January becomes an involuntary financial detox.

What's important is deciding on a figure that works for you and then making choices within it, rather than beginning with a wish list and hoping your bank account can keep up.

If your available budget is £100, there are ways to celebrate Christmas with £100, and if you've saved £1,000 and can comfortably afford to spend it, that's entirely your decision too.

The real measure of a successful Christmas budget isn't how impressively little you've spent, but whether you can enjoy what you've chosen to spend it on without worrying about the consequences afterwards.

How much should you spend on Christmas in 2026?

There's no magic number, and the £1,411 average forecast by VoucherCodes certainly isn't a target anyone needs to aim for, particularly when households have very different circumstances and Christmas traditions.

Your budget should reflect what you can comfortably afford after essential spending and existing financial commitments, rather than what other people appear to be spending or what the average shopper is predicted to spend.

The real Christmas saving is buying less of the stuff you don't care about

The interesting thing about this year's spending forecast is that we're on course to spend more money without actually buying more things, which feels like a fairly rubbish deal given how much effort Christmas shopping already requires.

But I do think it makes a compelling case for being more selective about where our money goes, because we can spend an enormous amount of time hunting for discounts on things we didn't particularly need in the first place.

I don't believe people need another lecture about cancelling Christmas coffees or making every present out of things they found in a drawer, especially when the rest of the year has already demanded plenty of compromises. Christmas is allowed to be fun, and there's nothing wrong with spending money on things that make you happy when you can afford them.

What I would encourage is being a little more ruthless about the spending that doesn't actually make Christmas any better, whether that's an annual present exchange nobody enjoys, elaborate decorations you're buying out of habit or a fifth festive night out you're attending because saying no feels awkward.

Christmas isn't a competition to see who can spend the most, or indeed who can spend the least, and if we can arrive in January with some happy memories and enough money left to pay the bills, I'd consider that a very successful festive season.