Tips To Avoid A Christmas Debt Hangover

It’s very easy to get so carried away with budgeting for Christmas presents, decorations and a delicious Christmas lunch that we can forget that we still need to meet our December and January household bills. Yes, avoiding Christmas debt can be a challenge!

A lavishly decorated Christmas tree - avoiding Christmas debt

We’ve been saving a little each day towards the cost of Christmas using Skintdad’s 52 Week Saving Challenge which helps you save around £650 by saving the same number of pennies as the number of the day in the year.  So, on 1st January you save 1p, 2nd January 2p, 1st February 32p and so on.

I would highly recommend trying this out next year and we will certainly be repeating the exercise, but that doesn’t help with the general household bills and the costs of things that can go wrong, like the heating, the boiler or the car. Unless you have a savings ‘cushion’ you’re left to find the funds to put things right and that can be a real struggle.

Most insurers offer emergency cover for this kind of thing and it is certainly worth shopping around when you renew your policy to see if this extra protection can be added on cheaply. Don’t forget to do your comparisons through using a search engine like

If your car won’t make it through the winter and you need finance to purchase another one, make sure you do your research before you buy.  Talk to your bank before you try a car finance company in case they are able to help with a loan or adjust your overdraft.

Reputable car finance sites will have a car finance calculator to show the true cost of your loan. This will allow you to decide whether the repayments are manageable and what the overall cost of credit is. You might want to consider car leasing or deferring a vehicle purchase until you have enough cash to put down a larger deposit and reduce the amount of credit you need to take out.

Here are some other things that might help.

Plan for next Christmas as early as possible

As I mentioned above, simple savings plans like Skintdad’s can provide you with a nice safety cushion to cover the costs of the big day.  It’s obviously a bit late now – but you can at least console yourself that next Christmas will be paid for.

Don’t blow all your December pay packet on Christmas

Easier said than done if you’ve bills to cover!  Lots of companies pay their staff earlier in December – at least a week earlier – and it’s easy to spend on luxuries and extra presents because you’re in the Christmas spirit.  There’s also your Christmas party outfits to consider.

Remember, it needs to cover you to the end of January – a long 6 weeks away.

Make sure you don’t miss vital payments like your mortgage

Missed mortgage payments are likely to get you into very hot water, not only by denting your credit score for future loans but with your lender.  Meeting these is far more important than new fairy lights or a state of the art TV to watch Christmas telly on.

christmas presents wrapped in brown paper

Talk to your bank if you need an overdraft

Don’t get clobbered by high-interest rates because you have not agreed an overdraft.

Use credit cards wisely

Credit cards can offer protection if you purchase goods costing over £100 because, if you have a complaint against the retailer, the credit provider can also be liable. But, the best advice is to pay off your credit card in full every month to avoid interest charges or shop around to see if you can find good balance transfer deals to consolidate your credit card debt.  Don’t forget, though, that credit is generally an expensive way of paying.

Similarly, don’t take out extra store cards which often have very high rates of interest, or take out finance which you might struggle to pay back come spring.

Related: The Snowball Debt Method – Get Debt Free Quick

Manage the kids’ expectations

It’s best to be upfront with kids who are pretty good at understanding when money is tight.  Tell them that Santa will be bringing them one special present this year rather than promising the full Christmas list – particularly if a mobile phone or other tech gadget is on their list.

Share the costs with your family

Are you the one who always organises Christmas?  If you have siblings (and it won’t cause a riot) try to agree to rotate the festive hosting between you.  If you’re cooking Christmas lunch, get your family to bring another course, or a Christmas cake, mince pies or wine.

Budget for nights out

It’s easy to budget for presents and food but forget all the extras that come with drinks after work and things like taxis back and forth from office parties (those were the days!).  Then there’s your office party outfit, Secret Santa presents and tubs of Quality Street to keep your colleagues happy.  Don’t forget to add an allowance for these ‘incidentals’ and try to stick to it.

With a bit of planning and some positivity, you will hopefully be able to rein in the excessive spending which can grip us all at Christmas and face the New Year without a Christmas debt hangover.

If you need advice about your financial situation now, contact your local Citizens Advice Bureau who can help.  Avoiding Christmas debt can be done with some careful planning.


  1. Susan B
    15 November, 2020 / 8:08 am

    Excellent advice. Putting away small amounts regularly is a really good idea. Not only does it give a pot to draw from when needed but it also gives self-respect and confidence to those who are not regular savers.

  2. Teresa sheldon
    12 December, 2017 / 6:47 pm

    Some really good advice here, so easy this time of year to get carried away and spend beyond our means, especially when today everything is so expensive and our children seem to want everything their friends have saying No can seem so hard, however something we need to do

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