As holidays are approaching here is a quick tutorial on how to create a blurred out of focus lights background for your project.
1) Create a new file with a black background and the needed size;
2) Add a transparent layer on top of the background;
3) Add a new layer on top of the transparent layer and fill it up with a colored gradient. Right click on it (the gradient layer in Layers panel) and select Create Clipping Mask;
4) Go to the transparent layer and with a brush of the needed shape paint the lights using white. The colors of the above gradient layer will apply to the lights.
If you want to make the background more colored than black you can apply steps 3 and 4 to it also, but painting with a thicker or irregular brush and with less transparency.