It’s Time to Start Your 2025 Christmas Sinking Fund

We know it feels way too early to say the C word… but Christmas is less than five months away. And if you’re anything like us, you’d rather not be panic spending in December and cringing every time you tap your card.

That’s why August is the perfect time to start your Christmas sinking fund.

A sinking fund is just a fancy name for saving up for a future expense in small, manageable amounts, and what’s more predictable than Christmas? Gifts, food, travel, nights out… it adds up fast.

Starting now gives you time to spread the cost and avoid putting it all on credit later (because we are not bringing debt into the new year again).

Here’s how to start your Christmas sinking fund in 5 minutes:

1. Work out how much you want to spend
   Be realistic. Think gifts, food, parties, travel, all of it.
2. Divide that total by how many paydays you have left
   If you get paid monthly and have 4 paydays left, divide your total by 4.
3. Set up a separate pot
   Use a savings pot, a separate account, wherever you won’t dip into it. The key is to keep it separate from your everyday spending.
4. Automate it
   Set up a standing order the day after payday so you don’t even have to think about it. Future you will be thriving in December.
5. Track it
   Keep an eye on your progress so you can adjust if needed.

You’ve still got time to spread the cost but the earlier you start, the easier it is. Let this be your sign to sort it today. 

Want a full guide to setting up your sinking funds? Read it here!