With the festive season around the corner, holiday expenses are quickly piling up—gifts, social gatherings, decorations, and festive feasts. However, soaring living costs and higher interest rates have left many consumers with less disposable income this year, prompting a need for smarter budgeting strategies to avoid overspending during Christmas.

Experts Highlight Early Planning

Christie Cook, Managing Director of Retail at Hodge Bank, emphasized the importance of preparing early. “Ideally, we’d all enter the festive season with savings set aside, but with rising energy and domestic bills, many might feel unprepared for December’s higher outgoings,” she explained.

Cook suggested starting savings early and consistently setting aside money every payday. For instance, putting £50 (€60) into a savings account each month could yield £600 (€721) by the next holiday season. Fixed-term ISAs are another option for those with lump sums to save, providing interest benefits over the long term.

Budgeting and Spending Wisely

Tracking expenses and setting firm spending limits are crucial to avoiding holiday debt. Opting for cash or debit card payments over credit cards can offer better financial control and eliminate high-interest costs.

Shopping early for gifts can help spread expenses throughout the year and unlock better deals. Comparing prices and using cashback websites are other savvy strategies to maximize savings. Repurposing old decorations or making your own can also cut costs.

Managing Festive Feasts

Christmas dinners, often one of the biggest holiday expenses, can be managed through careful planning. Online portion calculators can reduce food waste, while buying frozen turkeys instead of fresh ones and focusing on fewer, crowd-favorite dishes can significantly lower costs. Hosting a potluck-style meal can further ease the financial and logistical burden.

Trends in 2024 Holiday Shopping

This year, consumers are prioritizing savings and seeking ways to cut costs. According to Vericast’s 2024 Holiday Retail TrendWatch report, 38% of respondents are hunting for discounts, while 27% are exploring local deals.

Interestingly, 41% of shoppers plan to prioritize gifts for themselves, even if it means spending less on others. Physical gifts remain more popular than experiences, largely due to cost considerations, while AI tools and digital wish lists are emerging as key shopping aids.

Many families are also reassessing holiday traditions, scaling back on extended gift exchanges and large gatherings to manage expenses.

Average Holiday Spending

In the UK, average Christmas spending per person is approximately £768 (€923), while other European countries, such as France (€159) and Germany (€166), report lower figures. Italy (€117) and Spain (€95) rank the lowest among major Western European economies.

Cook advised consumers to create wish lists and stick to them to avoid unnecessary purchases. “Unwanted gifts are often a waste of time and money,” she said.

While financial planning may feel daunting, early preparation and mindful spending can help ensure a joyful holiday season without the strain of overspending.

Natural gas prices surged to their highest levels in nearly two years on Friday, driven by expectations of a colder-than-average winter in the northern hemisphere, dwindling supplies, and ongoing geopolitical tensions.

Benchmark natural gas futures rose to $3.66 per million British thermal units (MMBtu) during the Asian trading session, the highest price since January 2023. Year to date, prices have climbed 40%, reflecting mounting concerns among traders about rising demand and supply challenges.

Winter Weather Boosts Demand

The anticipated cold blast across Europe, China, Japan, and parts of the United States has heightened expectations of increased heating needs. According to EBW Analytics Group, mid-January weather forecasts point to a potential surge in daily heating demand by 18 billion cubic feet over the weekend.

“Weather patterns indicate below-average temperatures across key regions, which could drive significant consumption of natural gas for heating,” the group noted.

Supply Constraints Add Pressure

Supply-side challenges are compounding the price rise. The U.S. Energy Information Administration (EIA) reported a net withdrawal of 125 billion cubic feet from working natural gas inventory for the week ending December 13, signaling tighter availability.

Geopolitical tensions have also played a role. Russia’s reduced gas supply to Europe following its 2022 aggression in Ukraine has led to increased reliance on the U.S. and Norway, now the region’s primary suppliers. Any further sanctions on Russian energy exports could exacerbate the supply crunch.

Additionally, production disruptions caused by Hurricane Rafael in the Gulf of Mexico in November contributed to a bullish trend, with prices rebounding from a four-year low of $1.53 MMBtu in February to the current levels.

Market Outlook: Short-Term Volatility, Long-Term Growth

In the near term, natural gas prices are expected to remain volatile. Analysts suggest that U.S. energy policies under President-elect Donald Trump, which emphasize fossil fuel production, could balance supply and demand dynamics.

Over the long term, natural gas demand is projected to grow, particularly as a key power source for the burgeoning artificial intelligence (AI) industry. S&P Global Commodity Insights estimates a one-third increase in global power demand over the next decade, with natural gas expected to play a critical role as a stable energy source.

Wells Fargo analysts predict a 20% rise in electricity demand by 2030 due to AI-driven infrastructure needs, with natural gas likely to provide 47 gigawatts annually between 2024 and 2035.

Goldman Sachs anticipates that natural gas will account for 60% of the power required for AI operations, as renewable energy alone cannot meet the growing demand.

As energy markets brace for winter and longer-term shifts in consumption patterns, natural gas is positioned to remain a vital component of the global energy mix.