Christmas on a Budget? (14 Simple Steps to Finally Save)

Ho, ho ho! Christmas is almost here!

Christmas budget

Usually, when I envision the winter months I think of overeating, shorter days, movies and the holidays with loved ones!

Excited to spend time with family and friends, typically the last thing on anyone's mind is their Christmas budget!

However, when most are relaxing and preparing for the new year,  stores around the country just experienced their biggest shopping explosion of the year.

The enticing marketing campaigns and holiday cheer aids in the astronomical consumer spending every winter!

According to a Forbes article, holiday spending in 2016 exceeded 1 trillion dollars. Enough money to eradicate 66% of the college debt in the United States!

However, this is the year you will finally stick to your Christmas budget using these 14 steps!

Why do Christmas on a budget?!

Instead of taking out consumer debt, joyfully spending on the holidays without any regard and starting off the New Year in debt… this is the year you will stick your budget!


Because you actually made a budget for Christmas in the first place!

33% of the U.S. adults are estimated to spend $1,000 this Christmas with another 22% over the $500 mark.

But let's not start Christmas $1,000 in the hole!

Unfortunately,  instead of starting the new year off right, ready to accomplish personal, health, and financial goals, most people will actually start out in consumer debt due to the holidays. 

One report stated the average consumer would accrue approximately $986 in credit card debt during the holidays. That same person will take five months to pay off this balance.

So right as the warm weather rolls around in May, most people will finally have paid off their Christmas debt, just seven months away from doing it again.

It is time to do Christmas on a budget! But first, that starts with setting a spending goal.

Set a Christmas spending goal.

Before you buy a single gift for Christmas, you need to have a spending goal.

Christmas budget worksheet
Use this Christmas Budget Worksheet!

Really, it's a spending limit.

But no matter how you slice it, without a limit, goal, or Christmas budget, you might easily find yourself among the people who have over $1,000 worth of consumer debt from Christmas.

Note: See the photo above? Want the FREE PDF version? Download the MLW Christmas Budget sheet below!

According to a Fortunly article on Christmas spending, in 2018 consumers spent an average of $1,500 on Christmas gifts. This number is up over $500 from 2016!

1. Write down your Christmas Budget!

Marissa at said it best – get on a Christmas budget before you even step in a store! It seems silly, but 60% of adults don’t use a budget in life, let alone for the holidays.

Here is how you create a Christmas budget in about 10 minutes:

  1. What is your spending limit? Write it on the top of a piece of paper.
  2. Write down the names of everyone and anyone you plan on buying for.
  3. Assign a dollar value per person (while this can psychologically be a little taxing, it is necessary. To help – keep in mind it's all about the thought, not the dollar amount see #10)
  4. Just like that, you have a Christmas Budget!

Now that you know your number… it's time to start saving for Christmas… in January!

2. Start a Christmas Savings Account

After you create your Christmas budget, you need to start a Christmas savings account that is separate from your checking account. 

We will discuss why it needs to be separate in a moment, but if you don't save all year long, there is statistically a higher chance you will take out consumer debt during the Christmas season.

Instead of going into debt and spending the first five months of the new year paying off your Christmas credit cards, start the new year off with zero Christmas debt.

How to start a Christmas savings account:

  1. Look at your Christmas spending over the last few years to find your number (If you're unsure, set a general goal like to save $100 a month for Christmas)
  2. Open up a savings account that is separate from your typical banking account. This will prevent you from using this savings account for other things! Out of sight, out of mind!
  3. Divide your number by 11 (January – November) so you know how much to save for the 11 months leading up to Christmas.
  4. Either manually or automatically contribute to your Christmas savings account each month
  5. Around Thanksgiving, take your Christmas savings account and transfer what you need to your checking.
  6. Use your list and Christmas budget and don't go over it!

Note: You might not have a Christmas savings account at the moment. That is ok. Start one this January for next year! Congrats, now you know 🙂

What now?

Now that you have your budget and savings account, use these tips to help you stick to your Christmas budget and be savvy when buying this holiday season!

3. Use the Secret Santa approach.

Using the Secret Santa approach to cut back on gift spending is incredibly useful, especially for adults.

When polled on Twitter, the most commonly recommended Christmas budget-saving technique was to use the “Secret Santa” approach to gift-giving.

Just make sure to set some ground rules before everyone plays like a spending limit and a spending minimum (to help avoid the re-gifters who give out old candles, dirty flip flops, or worn flags).

Here is how Secret Santa works:

  1. Set a spending minimum or sending limit
  2. Draw names from a hat
  3. Buy for that person
  4. Give to that person at your family, workplace or friendly Christmas party.
  5. OR use the version where people draw from the middle and can “Steal” gifts!

Not only can you save money with the Secret Santa approach, but it is also super fun and engaging for adults or kids!

There are tons of variations for Secret Santa, here are just few ideas!

4. Give the Gift of Time or Expertise.

Who said a gift had to be purchased?

Instead, maybe you can “Help out a family member with your time instead of money.”  

Are you a plumber or have another trade you're considered an expert in?

Offer to help someone with a house project instead of buying a gift. Chances are, it will be greatly appreciated.  

Imagine helping a family member with an electrical project and saving them $400? That is an awesome gift!

Even if you're not a an expert at something, even just lending a hand is a great gift. Imagine telling your mom or grandmother they have you for eight hours on a Sunday to do whatever they want!

5. Have a Christmas budget for kids!

Kids make the holidays special…and that much more expensive.

If you have children ( I personally don’t yet and you can read why here) planning is essential when it comes to your Christmas budget.

One recommendation is to set a budget as step #1 said.

If you have multiple kids, consider getting each child something they really want… but do not feel like you have to have equal spending or the same number of gifts for each kid… they won’t know how much you spent.

Try this if you have younger kids:

I thought this was pretty funny and awesome if you have younger kids, one reader said him and his wife don't exchange gifts. With regards to his kids he stated, “Since they are small, we actually will hide toys that they stopped playing with and wrap them up.  They don't remember that's it's not new yet”.

At the end of the day, be sure to make Christmas about family and fun and not about getting. Starting those lessons at an early age will pay huge dividends down the road!

What about adult kids?

Consider doing a family day after Christmas instead of giving gifts or use the Secret Santa approach.

On another note, my mom was really good at hiring my step-dad to do work around my house for Christmas – a great gift for an adult kid!

Idea include:

  1. Going to a luxury theatre,
  2. Sporting events,
  3. Family vacations
  4. Mini-trips
  5. Other experience type activities

6. Don’t Ask, Don’t Buy.

Brother to brother, sister to sister, wife to husband – do we really need to get gifts each year for everyone?

Unless your love language is receiving gifts, as adults, you don't necessarily have to go all out for your sibling or spouse each Christmas season.

If you are in a relationship and you have financial goals or just a super tight Christmas budget, don't exchange gifts.

While yes, it might seem weird at first, not exchanging gifts doesn't have to be permanent and it is not that bad. The key to making this happen:

  • Talk it over with your family first
  • Make arrangements with your siblings, significant others, or close family.
  • Ask, do we really NEED more stuff?

This can be a temporary fix or something fun as a family you embrace… instead of swapping gift cards just to say you did!

7. Make Christmas Gifts.

Ready for the best Christmas budget hack? Want to know how to spend less and still give awesome gifts?

Make your gifts!

If you're capable of making gifts, why not try it?

Making gifts is original, more personalized and cost-effective.  For example, I once made custom wood coasters with personalized engraving.

Angela from, Tread Lightly Retire Early, sent me this awesome candied jalapenos recipe as an example of ways to make gifts. Homemade Christmas gift ideas include:

  • Woodworking projects
  • Wreaths
  • Decorations
  • Cookie baskets
  • Clothes (If you can make them)
  • Pictures

8. Volunteer as a family!

In my opinion, the best way to give is to GIVE!

Donate your time or efforts to a cause this Christmas season. For the past four years, my wife and I have participated in a group visit to a shelter where we helped families.

Giving gifts to the kids and their families and providing a holiday dinner was fun and rewarding!

Just try it one year, there are endless opportunities to volunteer and give!

9. Buy Throughout the Year.

Plan for next year's Christmas budget now!

The day after Christmas you will find wrapping paper, name tags, bags and decorations for half off. A week after that they're virtually free (but picked through).

That being said, you can also buy Christmas gifts all year as things go on sale!

Keep in mind buying throughout the year requires more planning and more budgeting because you run the risk of overspending. However, it can be done!

Your best bet might be saving all year, but shopping all year is also an option!

[See also, 10 Ways to Simplify and Organize Christmas!]

10. Personal touch always wins!

When it comes to the holiday season and setting your Christmas budget, always remember this simple rule:

Add some personal touch.

Here is what I mean…

My grandmother passed away on October 13th, 2017.

When I was younger, Nanny (My grandmother) gave all 18 of her grandchildren tons of presents. With money becoming less abundant towards her later years due to being semi-retired, naturally, she had to cut back on Christmas spending.

The last Christmas gift from my grandma in 2016 was a picture of her as a child holding a puppy along with the prayer she read at my wedding inside a card. 

If I had to guess, the copy of the photo and the frame hold a total value of less than $2.00. But after 29 years of gifts, guess what gift I will always remember from my Nanny?

The picture of her holding the puppy is in my living room and the prayer sits in the drawer of my nightstand. To me, her gift was priceless.

Personal touch is key when giving. Don’t go spend a lot of money and think that is what it takes to give. By all means – definitely do not go into consumer debt!

11. Redirect some of your “Other” budgeted money.

Chances are, you have money budgeted for what two types of expenses, “Fixed Expenses” and “Variable Expenses.”

While the flexibility of your fixed expenses is pretty limited, there are ways to minimize your variable expenses or “Redirect” them to your Christmas budget.

Try this: Cut back on your food budget, eating out budget, and your entertainment budget by 10% for the three months before Christmas and see how much you can save!

12. Create a “Saving for Christmas” chart

In my house, in our kitchen, you will find a graph with the remaining balance in student loans we currently owe. Each time we make a payment we fill in the graph.

The visual reminder keeps on track and reminds us of our goals.

While saving for Christmas might not be your #1 financial goal, creating a chart can help you visualize the process. You can create a graph, a graphic, a chart, or whatever floats your Christmas boat!!

13. Save weekly for your Christmas budget!

Do you like simple math problems? Here is one for you:

Take the number of weeks per year, subtract four (For the month of December) and divide that number (48) by your allotted Christmas budget.

What did you get?

Now save that amount weekly for the next year in a savings account unattached to your checking. Withdraw it as needed at the end of November to Christmas shopping!

For example, if your Christmas budget is $1,200, you would want to save $25 a week or $50 per paycheck.

Try this!

Ready to really level up your budgeting skills?

Auotmate your Christmas savings by having your desired amount go straight from your paycheck to a savings account! In less than a month you won't even notice the small amount you're saving each month!

14. Make some extra money before Christmas!

Last but not least, who said you can't just go make some money right before the Christmas season if you're someone who can't stand to budget?

While the discipline of budgeting is a good skill to work on, there is nothing stopping you from going and making a few hundred dollars here and there.

Just making an extra $50 a month for ten months straight is an extra $500 for Christmas. Consider the following options:

  1. Fill our some surveys every month
  2. Become a Tasker
  3. Walk dogs in the summer
  4. Deliver some food,
  5. -OR- use one these 50 side hustle ideas!

Final words on your Christmas budget: 

When we were little kids we couldn't wait for Christmas morning.

And while the same may or may not be true for you today, what we all truly want to avoid is the aftermath of the holidays!

During my early 20's I would use the holidays as an EXCUSE to live recklessly when it came to my finances… but Christmas wasn't a once in a lifetime thing – it was an every year thing.

I easily surpassed the $1,000 spending average. I wouldn't just buy gifts for my brothers, parents, wife and so on – I would blow money on social events because I thought it was what everyone did.

 My mindset – I was getting a coaching bonus in January and February that could pay off my credit cards from the holiday spending. And worse case, if I really overspent, I had my tax refund coming in March!

Between ski trips, New Year’s Eve extravaganzas, and Christmas I would start each year broke!!!

So my final take on your Christmas budget is this:

  1. Have a budget
  2. Remember it is the personal touch that counts
  3. Make memories and have fun, but don't blow your budget!

Q: What is your favorite Christmas budget tip?

[Relevant(ish) Article: Anti-New Year's Resolution Advice]

Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $200,000 in student loans with his wife in less than four years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, helping others with their debt and recommend using Personal Capital to track your finances.