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How to avoid spiralling debt this Christmas

How to avoid spiralling debt this Christmas
Image source: Getty Images

Is your wallet ready for Christmas this year? While it’s easy to overspend, here are some ways you can stay in control of your finances during the festive period and beyond. 

Why your Christmas budget matters

From Christmas parties to Secret Santas, the festivities cost money. In fact, according to research by Norton Finance, people spend up to 29% more during December.

However, with living costs rising and energy bills increasing, it’s more important than ever to stay on top of your finances. Spend too much, and you could struggle to pay your bills in January. What’s more, if there’s a financial emergency, you won’t have spare cash to fall back on. 

How do you avoid overspending at this time of the year, though? Let’s take a look. 

How to avoid spiralling debt

To avoid a debt spiral this Christmas, here are five tips to keep you on track. 

1. Set a budget

First, be honest about what you can spend on Christmas this year. Then, make a list of your income and necessary expenditure (e.g. bills and fuel). 

Once you cover the essentials, you can budget for Christmas extras such as party food and gifts. And after you set your budget, stick to it. Otherwise, it’s very easy to overspend quite drastically. 

2. Review your spending

Sure, we know that we often spend more at Christmas. Ideally, though, you shouldn’t go too far over your normal expenditure, or else you might not have enough money to pay for essentials. 

Review your spending at regular intervals. Make sure you’re on track with your budget and look for ways to save money if it looks like you’re overspending.  

3. Keep up your repayments

Make a note of when all your repayments are due, and always pay on time. Missed payments can lower your credit score, which might make it harder for you to apply for credit in the future. 

Do you pay by direct debit? You might find it helpful to pay all your bills at one time. For example, if you’re paid monthly, you might want to pay direct debits just after you’re paid rather than mid-month, and so on. You can do this by changing your payment date. Contact your lenders to set this up. 

4. Only borrow if you need to

Whether it’s a home loan or car finance, sometimes you might need to borrow money to buy the things you need.

That said, you shouldn’t take out more credit than you can afford, so consider your finances carefully before borrowing. If you do need to borrow money, though, then make sure you can afford the monthly repayments before you commit. 

Are you tempted to take out a loan or a new credit card to buy Christmas presents? This may not be the best idea. Instead, stick to your budget, and always shop around for the best deals online or in store. With some research, you could find that perfect gift a little cheaper elsewhere. 

5. Start a savings account

Do you have a savings account yet? If not, this might be the time to open one.

With a savings account, you can build an emergency cash fund. Why does this matter? Well, emergency cash can help you you’re hit with an unexpected expense or you accidentally overspend during the Christmas sales.

Don’t have much cash to spare? That’s okay! Even a few pounds per week adds up over time, so just put away whatever you can.   


From Black Friday sales to festive offers, it’s easy to overspend at Christmas. However, if you set a strict budget and watch your spending, there’s less chance you’ll end up with debt you can’t afford.

Are you worried about debt this year? Don’t struggle alone. Instead, reach out to your creditors, or contact a charity like Citizens Advice for help. Dealing with money problems early can help you stay in control of your situation.

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