Christmas can significantly impact finances, and many Brits will be wondering how to manage their money over the next couple of months as they navigate the winter chill.
Thankfully, experts at The Calculator Site have compiled their top tips for maximising savings this winter. While it’s a season that typically brings extra costs, it can also be an opportunity to take control and make both big and small changes with minimal effort that will have a significant impact on your finances.
Make your money work for you by opening savings and investment accounts
If you don’t already have your money stashed in a savings account, then now is the time to open one. There are plenty of options at your disposal, but it’s a good idea to make the most of tax-free savings before you look elsewhere. You can currently save £20,000 across Individual Savings Accounts (ISAs) each financial year, but the Cash ISA allowance will decrease to £12,000 in 2027, so if you’re not keen on investing, be sure to make the most of this higher allowance threshold now.
ISAs are a simple but effective way to strengthen your financial safety net and can be particularly useful for managing unexpected costs or any shifts in household spending. You can open multiple accounts, and there is plenty of flexibility in terms of the type of account you can open, with different options to suit different goals and lifestyles, such as whether you want instant access to your money or prefer to tuck it away for longer-term plans.
Cash ISAs are a good option if you’re more risk-averse and want a stable interest rate on your savings, and easy-access savings accounts will ensure that your money is readily available to be taken out whenever you like. However, if you’re saving up for the long term and won’t require immediate or frequent access to your entire savings pot, it’s a great idea to deposit money into a Stocks and Shares ISA. These typically have higher returns over a longer period, although be sure to invest smartly and make sure you’re aware of the risks.
A LISA is also an excellent choice if you’re between the ages of 18 and 40 and saving up for retirement or to buy a home, as you will gain a 25% government bonus on the money you put into it, which can be up to £4,000 per year. You can add money to this account until you’re 50. The government is looking to replace the LISA, but you can currently still open a new one.
Set small savings goals and stick to small, regular deposits
If you don’t have lump sums ready to save or invest, you aren’t alone, and waiting until that moment arrives can mean missing out on valuable opportunities to build wealth gradually. Try to save little and often by either setting aside a specific amount each month or rounding up everyday purchases. Consistent small savings can be just as powerful as occasional large deposits, and committing to saving habits can make a huge difference over time.
This is largely thanks to the magic of compound interest, which allows your savings to grow not only from the interest you earn, but also from the interest on that interest. Even modest contributions can accumulate faster than you might expect. For example, saving just £50 a month into an account earning 4% annual interest could grow to around £3,000 after five years, and the longer you keep saving, the more pronounced that growth becomes.
Starting small helps you build momentum and confidence in your financial habits, while also cushioning you against unexpected costs. Make it an automatic, non-negotiable part of your monthly routine by saving before you budget everything else, as opposed to saving whatever is left over. You could even treat it as another bill, only you’re paying yourself in the knowledge that your future self will thank you.
Budget your spending mindfully
The festive season often amasses a significantly higher bill compared to the rest of the year, due to the high expenses that come with everything from gifts and food to gatherings and energy costs. That’s why setting and sticking to a realistic budget for the upcoming months is essential for keeping your finances in check over the winter. Start by reviewing your income and regular outgoings, then decide how much you can comfortably allocate to extra spending without dipping into savings or relying on credit. Breaking this down into categories, such as food, social events, and travel, can help you stay organised and avoid unwanted surprises.
Just as small savings add up, small adjustments to your spending can make a big difference. Setting spending limits, planning gift lists in advance, and taking advantage of sales, coupons, discounts, or cashback offers can all help stretch your budget further.
Ultimately, budgeting for winter doesn’t have to increase the January blues. However, by planning your choices to align with your financial goals and keeping a close eye on where your money goes, you can relax and recover from any potential financial Christmas hangover.
Embrace the ‘hygge’ lifestyle and review your heating habits
You are often left with a much higher energy bill in winter due to the cold weather and long, dark nights. While this is inevitable to a certain extent, there are things you can do to save on energy costs. Many people overestimate how high they need to set their thermostat during cold weather. In general, you shouldn’t need to set your thermostat above 21 degrees, and you may feel comfortable setting it lower than this, although it should be at a minimum of 18 degrees.
Heat can also be generated in other ways. When you have guests over, the room is likely to be warmer due to body heat circulating. Similarly, cooking can produce natural heat that can flow throughout your house, allowing you to lower the temperature. This may inspire you to embrace a cosy ‘hygge’ as it’s referred to in Scandinavian countries. Layering thick knit jumpers, blankets and duvets, as well as enjoying hot foods and drinks, will help you feel extra snug.
You also need to check that heat can circulate properly throughout your home. Ensure that radiators are not blocked by furniture or other obstacles, as this will prevent heat from flowing through the room properly. Sofas are the most obvious culprit of trapping heat, but any large furniture could pose an issue. Clearing the radiator area prevents you from needing to turn up the temperature to compensate for the room not heating correctly and will guarantee that you are getting the most out of your heating.
Additionally, be mindful of your windows, which can be a major source of heat loss, as they are often less insulated than walls. To prevent this, close your curtains at night to create an extra layer of protection against the chill from cold windows. You may already do this, but it’s a common error to keep them open or just close the blinds, which can reduce the warmth of your house, increasing the need to turn up the heating. Thick, blackout curtains will be especially effective for retaining heat.
Cut back on energy in other ways
There are lots of small lifestyle changes that will help you cut back on energy costs over winter. Since winter clothes are thick and heavy, you may find yourself with more laundry to do over this period. Doing eco-washes or washing at 30 degrees is a great way to minimise your energy use, as is wearing things (especially jumpers and jeans) multiple times before washing.
At the same time, make sure loads are as full as possible without overloading the machine, as this will ensure the efficiency of your washes and prevent you from needing to do more. If you’re fortunate enough to be on holiday, or just happen to be a night owl, you may have the means to do laundry at night during off-peak hours (between 10pm and 8am) which is cheaper, and an easy way to cut back on energy costs.
Another way to save energy over winter is by selecting the right appliances while cooking. Microwaves, air fryers, and slow cookers are more efficient for preparing smaller portions for just one or two people, whereas an oven will be best suited for cooking for larger groups or families. Whenever possible, consider batch cooking by preparing meals in one go, and reheat portions on the following days. Additionally, resist the urge to open the oven door to check on food, as it lets out heat and wastes energy, making it harder to maintain the correct cooking temperature. Instead, keep the oven door clean so you can monitor food through the glass. When cooking on the stovetop, keeping lids on pans helps food cook faster and can save up to 10% of energy, while using fewer hobs will also minimise energy use.
Alastair Hazell of The Calculator Site said, “Ultimately, being prepared and thinking ahead about your finances will ensure a restful and stress-free start to the New Year for you and your family. New years are for fresh starts, and now is the perfect time to put your savings to work so that future you can benefit significantly.
“Whether your focus is on major financial decisions, such as investments, or budgeting, or small lifestyle changes and hacks to cut down costs, having a financial action plan ready will allow you to tackle the winter and 2026 with confidence.”
