Why now is the time to save for Christmas 2024

The festive season is in full swing - with office parties, late night shopping and evenings spent browsing Christmas markets in winter wonderlands. 

And, as we countdown to the big day, it’s natural to reflect and assess what we could do differently next year. 

One point that might be worth considering is finding a way to alleviate the pressure of festive spending next Christmas. 

Now, it might sound strange to plan for an event that's more than 365 days away… But you’ll thank us next year. 

Christmas should always be treated as a long-term savings goal, as it will take a big chunk out of your budget. As much as we can try and reduce festive spending, it’s inevitable we’ll spend more in December than any other month in the year.  

This realisation is important as then you can appropriately plan for how much money you’ll need come Christmas 2024. 

So, grab a mince pie and let’s explore some saving tips that might help throughout the next 12 months. 

Create a budget 

The best way to start saving for Christmas next year is to look at your finances and track how much you can realistically save each month. Review your bank statements and assess where your money is spent. Plus, if you can find any miscellaneous direct debits that you don’t need anymore and can delete - bonus points! 

This is a great exercise to do before the new year as it means you’ll start 2024 with a strong budget and fresh outlook on your finances. 

Compare savings accounts 

Once you’ve done some calculations, it’s time to find a safe place for your monthly savings. Interest rates on savings accounts have increased this year and for the first time in years, some accounts are even offering rates that beat the current inflation rate of 4.6%. Therefore, it’s a good idea to move money if it’s sitting in a low-interest account as you could be benefitting from some extra interest on your savings. 

Currently, the top interest rate for an instant access account is from Metro Bank at 5.22% but you’ll need to deposit £500 into the account to unlock this rate. This is a good option if you have the deposit amount and are looking for a flexible savings account that allows you to withdraw and deposit as you wish. 

Alternatively, a regular savings account is a good way to start saving for next Christmas, as it encourages a specific savings amount each month. This amount can be determined when you review your finances and create a budget for the year. 

The top regular saver in the market is from Nationwide at 8% with a maximum monthly deposit of £200 - but this is variable, so it could change throughout the year. 

Elsewhere, First Direct has a regular saver at 7% and this is fixed for one year. The maximum monthly deposit is also higher at £300 but you have to deposit at least £25 a month, so you can’t skip the savings habit.   

Lock money away if you can

Another savings account to consider is a fixed-rate bond. If you have a lump sum of money leftover from this Christmas, then a good way to ensure it’s saved for next Christmas is to lock it away for 12 months. A fixed-rate bond will do this and you’ll be rewarded with a competitive interest rate. 

Metro Bank is currently offering a one-year fixed-rate account at 5.8%, but remember this is a commitment, as you won’t be able to access the money until the term ends.

Try a savings challenge 

However - if you don’t have a lump sum to save and you are struggling to put money away each month - then you could try a savings challenge. These challenges are popular as it forces someone to be disciplined with their money. 

Try saving little and often every day and soon you’ll be rewarded with a sizable savings pot. For example a popular challenge is when you save £1 on Monday,  £2 on Tuesday and then keep rising until you reach Sunday and save £7. This means you save £28 every week and by the 36th week the saving would reach £1,000.

Be creative with this year’s gifts 

Finally, by thinking about 2024’s festivities you’ll see opportunities to take advantage of this year’s fun. 

A simple savings hack is to keep your Christmas cards and then reuse them as gift tags for next year. Plus, carefully store any unused wrapping paper and this will mean you can avoid these costs again. 

Overall, it’s definitely a good time to think about next Christmas as by putting a plan in place now, it’ll mean your bank balance is filled with festive cheer all year round.