How to Save £1,200 by Christmas: 5 Simple Challenges.

Saving Money for Christmas

According to The Sun: With less than three months until Christmas, many people start thinking about how to cover holiday expenses. This can be challenging, but participating in various savings challenges can help you accumulate money.

The key is to spread out your Christmas expenses to avoid a large financial burden right before the holiday. There are many challenges to participate in that can leave you with extra money for gifts or festive entertainment. Don't worry if you can only save small amounts each week – there are options for every budget.

Different challenges will suit you depending on your income and savings goals. Next, we'll discuss five popular challenges that can help you set aside money for the holiday season.

No-Spend Challenge

One easy way to save money is through the no-spend challenge. You commit to spending money only on essential items for a certain period, such as 30 days.

During this time, your expenses are limited to basic needs like utilities, food, and hygiene products. Forget about unnecessary purchases, including paid services, coffee, or eating out.

For example, if you spend £4 a day on coffee, you could save around £120 during the no-spend challenge month. This means you’ll have approximately £360 by Christmas.

This challenge can also help you get back on track if you've overspent, bringing you closer to your savings goal.

Expense Rounding Challenge

Another simple way to save money is through the expense rounding challenge. The idea is that every time you make a purchase, you round the cost up to the nearest pound and save the difference.

For example, if you paid £3.50 for a croissant, keep the 50 pence change. Some banks offer accounts that automatically round up your expenses. Among them are Moneybox, Chase, and Starling Bank.

Each time you make a transaction with one of these bank cards, they round the amount up to the nearest pound, and the difference is saved in a separate account.

While this may seem insignificant, cumulative rounding can add up significantly. By saving about £1 a day, you'll have £88 by Christmas.

No-Spend Day

If a month without spending isn't for you, try starting with one no-spend day a week. Just pick a day when you'll only spend money on the essentials.

For example, if you work from home two days a week, these days could be your no-spend days. This way, you could save around £100 a month, which totals £300 by Christmas.

Spend Tracker Challenge

This challenge will help you become aware of where your money is going. For example, if you spend £3.50 on coffee, put that same amount into your savings.

This method also indicates where you are overspending and where you can save. When it comes to larger purchases, ask yourself if you really need it. If not, don’t buy it.

Cashback Challenge

With the rise of online shopping, new opportunities for savings arise. Cashback is a way to receive rewards for spending with certain companies.

For example, Topcashback will pay you if you register and make a purchase through their service. This extra money can be set aside for savings.

Cashback offers are usually presented as percentages. For instance, you could get up to 5% back on purchases of £30 or more.

Topcashback has stated that their members earn over £300 a year, averaging about £25 a month.

Where to Keep Your Savings?

If you are used to paying in cash, you might find it easier to keep your money in a bank or a piggy bank.

However, by opening a savings account, you can earn more interest on your savings.

To find the best savings account, visit comparison sites such as MoneyfactsCompare or Compare the Market.

Your bank may also offer you a special account to keep your savings separate from other funds.

If you need access to your funds, open an easy-access account that allows you to withdraw money for free. If you want to lock away your money for a longer term, choose a fixed-rate deposit account.