How to set money boundaries this Christmas

With Christmas around the corner, millions of people will be feeling the pressure to spend big.  Last year, the financial toll of the festive period was huge, with one in five UK adults still paying off their debts months later - some up until Easter.

On average, people spent over £1,800 per person last Christmas, covering everything from gifts to travel expenses. For many, this was nearly 80% of a typical monthly salary.

But why do we feel pressure to spend what we don’t have?

The urge to splurge at Christmas often comes from societal and psychological pressures. The festive season is seen as a time for generosity and indulgence. This can lead people into ‘competitive buying’ – compelled by the feeling that we must match or outdo the presents others give us. Social media plays a big role too, making us feel like we need to keep up with trends or portray an ‘ideal Christmas’. But this can lead to financial strain.

Here are some ways to keep your Christmas spending under control.

Be honest about your budget

Start by being straight. You don’t need to share every detail of your finances, but letting loved ones know you’re being mindful of spending can set expectations. Say something like, “I’m keeping things simple this Christmas to stick to my budget.” This opens the door to practical discussions without causing offence. You’ll probably find most people will also be relieved to be able to cut back a little.

Suggest a Secret Santa or spending limit

If gift-giving is a tradition, why not suggest a Secret Santa or agree on a spending cap? This keeps things fun and fair while easing financial strain. You could say, “Shall we do a Secret Santa this year with a £20 limit? It’ll make things more affordable for me.”

Choose thoughtful, low-cost gifts

Remind loved ones that it’s the thought that counts. Homemade items, personalised playlists, or framed photos can be just as meaningful as expensive presents. You can get everyone on board by saying: “I’m focusing on thoughtful gifts this year rather than splashing out.”

Turn down costly events

Christmas markets, panto tickets, or fancy meals out can add up. Politely decline and suggest an alternative if something doesn’t fit your budget. Start the conversations with: “I’d love to catch up, but I’m watching my spending. How about a cosy night in instead?

Plan together

Take the initiative to plan budget-friendly gatherings. A potluck Christmas dinner or a movie night can be festive without breaking the bank. Suggest to everyone: “Why don’t we all bring a dish and have a low-key celebration at mine?”

Prepare for pushback

Some people might not be happy or want to cut back, but stand firm. You can say, “I really want to enjoy Christmas without stressing about money. I hope you understand.” Don’t feel bad about having the conversation. Setting boundaries isn’t about being stingy. It is about protecting your financial well-being.

Remember the spirit of Christmas

Ultimately, Christmas is about spending time with loved ones, not draining your bank account. By focusing on connection and thoughtfulness, you can create a memorable Christmas that doesn’t leave you in the red come the New Year.