The festive season is full of cheer, but it can also leave your finances feeling stretched. Overspending on gifts, parties and travel is common, leaving many of us stressed in January. The good news? Recovery is possible. By following practical post-Christmas budgeting steps and adopting smart Christmas money tips, you can regain control and start the new year on a solid financial footing. For more guidance, see our guide on budgeting after the festive season.
Assess Your Spending (Without Judgement)
Before you can move forward, it’s important to understand exactly where your money went.
Practical steps:
- List all Christmas-related expenses, including gifts, food, travel, decorations and social events.
- Check bank statements and credit card bills to capture anything you may have forgotten.
- Compare your actual spending to what you originally planned.
Example: If you budgeted £400 for gifts but spent £500, identifying that £100 overspend helps you plan how to absorb it over the next few months.
This isn’t about blame, it’s about clarity. Knowing the numbers so you can plan going forward gives you back control.
Prioritise Bills and Debt
January often brings higher costs and delayed credit card statements. Knowing what to pay first can reduce stress and prevent missed payments.
What to focus on first:
- Essential living costs: rent or mortgage, council tax, utilities, food and childcare.
- Priority debts: mortgage arrears, rent arrears, council tax, energy bills and court fines.
Non-priority debts: credit cards, overdrafts, personal loans, etc.
Fact: According to Finder, in October 2025, the average UK credit card APR was 35.89%, up from 30.46% in January 2023 – e.g. if you borrow £1,000 and take a year to repay it, you could face up to £350 in interest alone.
Tip: If you’ve used your credit card to fund your Christmas shopping, like two-thirds of other Brits did last year, we would recommend cutting it up now to stop yourself getting tempted. Alternatively, you could move your debt to a 0% interest credit card. This will give you more time to pay off your credit card debt, without worrying about any extra costs.
If money is tight:
- Make at least the minimum payment on non-priority debts.
- Contact creditors early – many lenders are willing to offer short-term breathing space or reduced payments.
- You may also find it helpful to complete a simple income and expenditure sheet to clearly see what’s affordable for you.
Create a Realistic Post-Christmas Budget
A fresh budget helps stop festive overspending from rolling into the rest of the year.
Steps to build a practical budget:
- Write down your monthly income.
- List fixed costs (rent, utilities, insurance, childcare).
- Allocate money for essentials like food and travel.
- Set aside what you can for debt repayments.
- Allow a small amount for non-essentials so your budget is sustainable.
Tip: If savings were used over Christmas, rebuild them gradually. Even small amounts help. Start creating your sinking fund now.
Example:
- £50 per week to rebuild your emergency fund
- £20 per week towards clearing Christmas-related debt
- Using a budgeting tool or calculator can make this process quicker and clearer.
Reduce Costs with Practical Money-Saving Actions
Rather than general advice, focus on changes that are easy to implement and make a real difference.
Food and day-to-day spending:
- Plan meals weekly and cook in batches to reduce food waste.
- Shop with a list and avoid impulse purchases.
- Use supermarket loyalty schemes or cashback apps.
Subscriptions and bills:
- Review bank statements for unused subscriptions or memberships.
- Cancel anything you no longer use or need.
- Check whether you’re on the best available tariffs for mobile, broadband, and insurance.
Transport savings:
- Walk or cycle for short journeys where possible.
- Use public transport season tickets if you commute regularly.
- Car share with colleagues to reduce fuel costs.
Small, consistent savings add up quickly and free up money for debt repayment or savings. For more practical strategies, check out our money-saving tips after Christmas.
Plan Ahead for Next Christmas
One of the best ways to recover financially is to avoid the same pressure next year.
Simple planning ideas:
- Set up a small monthly Christmas savings pot.
- Spread gift buying throughout the year during sales.
- Decide on a clear spending limit for gifts and social events early.
Planning ahead reduces reliance on credit and makes Christmas far less stressful.
Get Help With Your Debt
If you’re feeling overwhelmed by Christmas spending or existing debts, you don’t have to deal with it alone. Our Debt Advice Tool can help you do the following in less than 15 minutes:
- Understand your debt options
- Explore practical solutions
- Create a personalised plan to manage and reduce what you owe
Taking action early can make a real difference to your financial wellbeing and help you move into the new year with greater confidence and peace of mind.
