How to recover your finances after Christmas

Once the festive lights fade and the decorations come down, many UK households are left with a financial headache that lasts long after the leftover turkey. A typical household usually spends around £2,460 per month, but during December, spending habits shift dramatically. According to the Bank of England, households spend £713 more than usual – a 29% increase – as gifts, food, travel and social events stack up. Sales of books and entertainment items more than doubles, specialist food spending rises by 22%, and alcohol spending jumps by 38%.

It’s no surprise that January often feels like the longest financial month of the year. And Moneyboat’s own data shows that people earning £33,001-£40,000+ were 26.8% more likely to borrow in December 2024 compared to the previous year, while borrowers overall were 49.57% more likely to take out £1,000 or more.

That’s why our experts have pulled together practical, realistic ways to help you reset, recover and get financially ready for the months ahead.

In this guide:

• Quick cash boosts
• Smart ways to cut costs
• Longer-term fixes
• Build financial resilience
• Do a January money health check
• Summary & further support

Quick cash boosts

January can be a financially tough month, especially after a December where spending skyrockets – and in 2023 the average Christmas spend hit £709, with Londoners spending the most in 2024. If you need cash quickly, here are effective ways to generate a short-term boost.

1. Sell unwanted items

With video, music and entertainment purchases increasing sharply during December, many households end up with duplicates and unused items – and unwanted presents, of course. January is the perfect time to declutter and sell clothing, gadgets, toys or books on sites like eBay, Facebook Marketplace and MusicMagpie.

This not only creates space after a busy festive period but can also give you a quick cash injection to offset some of December’s extra £713 of spending.

2. Offer your skills freelance

If you can write, edit videos, design graphics or manage admin, platforms like Fiverr and Upwork can convert your free time into income. Even completing a handful of small projects could help cover rising food and gift costs from the holiday period.

3. Take part in paid research

With many people delaying DIY spending in December (hardware spending drops by 19%), January is a month when companies look for new consumer insights. User testing, mystery shopping and product trials can pay £20-£200 depending on the project.

4. Try gig economy jobs

Delivery apps like Deliveroo or Uber Eats can offer extra income with flexible hours. Even a few hours per week could help soften the impact of January bills, especially if you overspent during the most expensive month of the year.

Smart ways to cut costs

Reducing outgoings is just as powerful as increasing income – and many people discover they’re paying for things they no longer need. With food, drink and gifting costs surging in December, January is the perfect time to rebalance your spending and cut back where possible.

1. Switch your utilities and services

Whether it's broadband, energy or insurance, comparison sites can reveal big savings. Switching could save hundreds per year – money that can help smooth out the fact that households spend nearly 30% extra during December.

2. Cancel unnecessary subscriptions

Gym memberships, premium apps, forgotten streaming services and annual renewals can drain your balance without offering much value. Check your bank statements or use budgeting tools such as Emma, Plum or ScribePay to spot recurring charges. Cancelling just a couple of unused subscriptions can save £20-£50 per month.

3. Try a no-spend weekend

January is a naturally quieter month, making it perfect for low- or no-spend activities such as walks, home movie nights, batch cooking or board games. A no-spend weekend can help reset habits and highlight unnecessary impulse spending.

Longer-term fixes

Once you’ve handled the immediate pressure of January expenses, it’s worth putting longer-term structures in place.

1. Create a realistic budget

Budgeting after Christmas isn’t about restriction – it’s about clarity. The 50-30-20 rule is a simple starting point:

• 50% for essentials
• 30% for wants
• 20% for savings or debt repayments

Even if you dipped into borrowing during December (a month when people were nearly 50% more likely to borrow £1,000+), a clear budget can help you avoid repeating the same pattern.

2. Check if you’re owed money

Many people are entitled to tax rebates without realising it. Using HMRC’s tax checker takes only a few minutes and may reveal overpayments. Cashback websites such as TopCashback or Quidco are also good tools for saving money on everyday purchases – but avoid making purchases you wouldn’t otherwise, just because the cashback incentives seem attractive.

3. Switch your bank account

Some UK banks offer £100-£200 for switching your current account. If you’re unhappy with your existing provider, switching can deliver an instant cash reward and sometimes additional perks.

Build financial resilience

Once you’ve steadied yourself after Christmas, building resilience is the next step.

1. Start an emergency fund

Even having £500 tucked away can prevent reliance on credit if unexpected bills hit later in the year. Automating a small weekly or monthly amount into savings makes this easier to maintain.

2. Start a sinking fund for next Christmas

Putting aside £20–£30 a month now equals several hundred pounds by November. This prevents the intense pressure of paying for everything at once next December.

3. Explore free or low-cost alternatives

Swap paid subscriptions for free resources where possible – library books, YouTube fitness tutorials, second-hand equipment and community groups can all save significant amounts!

Do a January money health check

A financial ‘MOT’ can uncover opportunities to save money in places you may not expect:

• Check your tax code: Being on the wrong code can mean overpaying tax.
• Review credit card interest: If you’re paying interest, consider a 0% balance transfer card.
• Assess your energy tariff: If you haven’t switched in the past year, you may be on a costly standard rate.
• Check car insurance renewal: Auto-renewals often cost significantly more than switching.
• Review your mortgage rate: If your fixed term has ended, exploring new deals could save thousands.
• Check your water bill: Households with more bedrooms than occupants may benefit from a meter.
• Have a spare room? Renting it to lodgers or students can bring in regular income.
• Look at your mobile contract: SIM-only plans are often much cheaper.
• Use cashback credit cards: If you repay in full each month, cashback cards offer free rewards.

Summary & further support

Recovering your finances after Christmas is completely achievable with the right steps:

• Start with quick cash boosts to ease immediate pressure.
• Reduce outgoings through smart cost cuts.
• Put longer-term systems in place to avoid stress next December.
• Build an emergency fund to boost resilience.
• Carry out a January money health check to ensure you’re not overspending unnecessarily.

If you’re worried about debt or need independent support, organisations such as StepChange, Citizens Advice, MoneyHelper and National Debtline offer free, confidential guidance.

You can also explore more financial support resources on the Moneyboat Free Support Organisations page.

For more budgeting, credit and borrowing insights, explore the latest reads on the Moneyboat blog, including guides on saving money and open banking, or learn more about short term loans and payday loans.

Methodology

The team at Moneyboat developed this campaign using insights gathered from Moneyboat’s own blog content and industry expert guides, alongside national spending data. Key statistics were sourced from the Bank of England, NimbleFins, and Statista to provide context on UK Christmas spending habits. This information was analysed and adapted to create relevant, research-led advice on how to recover your finances after Christmas.