How to turn a Season of Spending into a Season of Saving

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2021 is looming fast, and since you’re already planning, why not set up some savings to make sure you extend a stress-free season into next year? Turn a potential financial drama (car needs essential repairs! The boiler breaks down!) to be a mere inconvenience. We hope that doesn’t happen, but the key is to be prepared, because otherwise you’re likely to accumulate expensive debt.

A way to avoid spoiling your special season? Set up an emergency fund with all that extra Christmas cash!

An emergency fund is a savings account that you can access at any time, which holds between 3-6 months of your essential (core) household living costs. So, if your essential household expenses like mortgage, energy, transportation, loans, and insurance etc amount to £1,500 per month, this means your emergency fund needs to ideally be between £4,500 to £9,000.

If you don’t have an emergency fund right now, focus on creating a starter emergency fund of £1,000. Once you’ve got £1,000 together, you can then focus on getting rid of all your (non-mortgage) debt. Then, with all the money you free up from getting rid of those debt repayments, you can then focus on finishing off your emergency fund to the 3-6 months’ essential expenses.

Building the emergency fund should be a priority, even if you currently have expensive debts. That’s because:

  • You want to avoid unexpected financial events causing you to have to take on more debt in the short-term;
  • You want to create a sense of progress to build your confidence;
  • You can then focus on getting rid of non-mortgage debt, which eventually frees up income from which you can finish funding your emergency fund.

Once you’ve got £1,000 in your emergency fund, use the snowball method to repay all your non-mortgage debt as quickly as possible using the same principles as you used for the starter emergency fund.

As you build, don’t forget to celebrate small milestones

You are looking for progress, not perfection. Find a non-spending way to celebrate progress, in a way that works for you. As you begin your starter emergency fund, focus on small, achievable milestones of £250, £500, £750 and £1,000. Until you get to £500 focus on how much you’ve saved, not how much more you need to save. Then flip it over and focus on how much you need to save until you get to the £1,000. You need to find a way to keep you moving forward, in the face of temptations, setbacks and lapses in self-discipline.


Now that you’ve read this article, set yourself a small, actionable goal for the next week. Sit down to plan out repaying your debt using the Snowball method, or make yourself a savings pot: make sure you do something, and don’t forget to recognise that you’ve taken action, and that’s something to be proud of!

It might take a little time and effort, but in return you could be less stressed and have greater financial security. Have a very merry festive season, then set yourself up to stay financially-stress free going forwards, too!

Santa Savings

Important: This is an option, not a recommendation. Your employer does not benefit from offering this service and all your communications will be with Salary Finance limited trading as Neyber. Loan applications will be assessed to ensure the loan is appropriate and affordable for you. Finwell content is for guidance and educational purposes only and is generic in nature. Salary Finance limited trading as Neyber does not offer regulated financial advice. Please seek independent financial advice.