Why budgeting matters more than ever this Christmas

Can you afford the cost of Christmas this year? That’s the question many of us are asking ourselves this year.

And for good reason.

Research by Park Christmas Savings has found that the typical UK household expects to spend nearly £700 on presents alone.

On top of that, the predicted spend on Christmas dinner is likely to be around £185.80, along with £158.20 on snacks, sweets and treats.

And that’s before we even get to other expenses like Christmas decorations, festive fizz and activities, which look set to add up to about £1,500.

That’s almost a third - around £400 - more than people think they spent last Christmas.

Set a budget for Christmas

It’s easy to get so preoccupied with the cost of Christmas that you can lose sight of other essential expenses, such as groceries, rent and household bills.

So if you’re worried about how to balance these various costs this winter, take a look at how much money you’ve got coming in and where it’s going.

If you know exactly what you’re spending on vital household expenses, you’ll have an idea of what you can realistically afford to spend on celebrating the festive season.

You could even set an upper limit on how much you want to spend this Christmas, and take the opportunity to review your spending habits to see where savings could be made.

You’ll then, hopefully, be able to have the best possible Christmas and avoid starting 2027 with a financial hangover.

We’ve put together a guide to how to create a budget to help you get started.

It's also worth checking our tips on how to get your finances ready for Christmas.

Households worried about how they’ll afford Christmas

Just one in five people polled by Park say they’ve been saving up throughout 2026 to pay for Christmas.

At the same time, more than one in three say they’re planning to either borrow money from friends or family, take out a loan, use their overdraft or use their credit card.

And four in five adults admit they’re worried about covering the cost of Christmas this year.

So it’s clear that now’s the perfect time to get to grips with your budget, before the festive spending ramps up in the coming weeks.