Five of the best spending challenges that could help you save up to £1,200 in time for Christmas

With Christmas now less than three months away, many of us will be thinking about how we are going to pay for it.

It can feel difficult to know how to get started but a spending challenge can help you to cut your expenses and build up a pot of cash for the festive season.

The idea is to help you spread the cost of Christmas, so you’re not hit with a big bill in the run up to the big day.

There are lots of spending challenges you could take part in that could leave you with hundreds of pounds to spend on Christmas shopping or activities.

Plus there are lots of options for every budget, so don’t worry if you can only shave small amounts off your spending each week.

Different challenges may work for you depending on your income and how much you are trying to cut back.

Here we explain how five popular spending challenges can help you set money aside for the festive season.

The no spend challenge

One of the easiest ways to save money is by doing the no-spend challenge.

You commit to only spending money on necessary items for a set period, such as 30 days.

During that time you only spend money on essential purchases such as bills, groceries and toiletries.

But you don’t spend money on unnecessary items, including streaming services, coffees or eating out.

For example, if you usually spend £4 on a coffee each day, then doing the no spend challenge for a month would save you around £120.

That means you could have around £360 by Christmas Day.

Meanwhile, the challenge can help you to get back on track after overspending, which can bring you closer to your savings goal.

It can also help you to understand where you’re spending money on unnecessary purchases.

The round up challenge

Another easy way to put money aside is through the round up challenge.

The concept is simple: every time you pay for an item, simply round up the cost to the nearest pound and save the difference.

For example, you pay £3.50 for a croissant in a shop and save the remaining 50p.

Some banks offer accounts that will actually do this for you.

Among them are Moneybox, Chase and Starling Bank.

Every time you make a transaction with one of their cards, the bank will round up the cost to the nearest pound, then save the spare change in a separate account.

It may not seem like a lot, but rounding up your spare change can really add up over time.

If you saved around £1 a day then you would have £88 by Christmas.

No spend challenge 

If you’re not ready to do a no spend month, then you could get started with a no spend day.

Simply choose a day of the week on which you will only spend money on essentials.

For example, if you work from home two days a week, then you could decide these are your no spend days.

On this day you cut out spending on coffees, sweet treats or other impulse purchases.

Doing this challenge could save you around £100 a month, which would add up to £300 by Christmas Day.

Match the spend challenge

This challenge is a great way to make you aware of what you are spending.

For example, if you spend £3.50 on a coffee, then you put £3.50 in your savings.

Doing this will also help you to see the areas where you are splurging and could cut back.

Plus, the challenge works really well if you’re prone to spending small amounts of money that quickly add up.

When it comes to more expensive items or splurges, ask yourself if you really need the item or experience.

If you don’t then don’t make the purchase.

The amount you could save depends on your monthly budget.

But if you spend £400 a month, for example, then this is the amount you would have saved after 30 days.

If you were able to set this money aside until Christmas then you would have £1,200 to spend during the festive season.

Cashback challenge

As we increasingly pay for items online, there are more opportunities to save money with different tools.

Cashback is one way you can be rewarded for spending money with certain companies.

For example, Topcashback will pay you when you sign up and make a purchase through its links.

You could then put this extra money into your savings.

Cashback deals are often advertised as a percentage.

For example, you would get up to 5% back when you spend £30 or more.

But you should always be cautious when spending and not let offers tempt you to hand over money you didn’t intend to spend.

Only use cashback to make a purchase if you were going to buy the item anyway.

Topcashback said its members earn more than £300 a year, which works out at around £25 a month.

So if you used Topcashback for every purchase until Christmas, then you would have £75 by December 25.

Where should I store my cash savings?

If you usually pay for things with coins or notes then you may prefer to save your cash into a jar or piggy bank.

But you could increase the return on your money with a savings account.

This is because you earn interest on all the money you save.

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

Your bank may also offer you a pot where you can keep your savings interest separate from other money you have.

If you need access to your cash, then open an easy-access savings account, from which you can withdraw your money fee-free.

Or if you want to lock your money away for longer, then choose a fixed-rate bond or notice savings account.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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