A new survey has found around a third of consumers will be spending less on Christmas this year.
With Christmas coming, it may be very tempting for some to go on a spending splurge, but good money management could involve being somewhat frugal this year.
VAT and inflation have pushed up the cost of goods faster than incomes this last year, but despite this, 58 per cent of consumers still plan to spend as much on this Christmas as last year, according to Axa's third Big Money Index.
However, while many are maintaining their spending, a third of consumers are cutting down.
The survey found 30 per cent will spend less on presents, 36 per cent will reign in their decorations budget and 34 per cent will be going out for fewer party drinks.
Food has slipped less on the priority list, with 24 per cent cutting back on the turkey and trimmings.
Among the demographic features are age and geographical variations, with older people and those living in the north-east most likely to cut back.
Commenting on the situation, Axa UK's director of customer partnerships Nick Turner said: "As the cost of Christmas rises, in effect, thanks to the VAT hike, it's heartening to see the majority won't be cutting back their festive budgets this year – though they will get less for their money.
"I think we're going to see a lot more shopping around and possibly the highest ever online trade this year as consumers seek to stretch their pounds even further."
Those wanting to budget better may find there is no time like Christmas to give themselves a bit of a present in the form of a budget planner.
This can help people at any time of the year to check carefully what they are spending and where their money is going, so they can eliminate waste and find ways to cut back if necessary without compromising on essential bills.
And it could help people to seek ways to get more for the same amount of money, with some taking up the idea of shopping around or getting bargains online.
The Consumer Credit Counselling Service warned this week that those who do not budget regularly are the most vulnerable to sliding into unpayable debt situations.
But for those who plan their spending well, Christmas can be merry without the fear of a new year financial hangover.