Christmas Shopping on a Budget

So many questions spring to mind when it comes to Christmas shopping. Everyone seems to rush around, trying desperately to buy their loved ones the ultimate gift. 

  • What is the average Christmas budget?
  • What is a good amount to spend on Christmas gifts?
  • Is it too early to buy Christmas presents?

I could go on and on trying to answer these questions, but the fact is that everyone's situation is different. Your budget for Christmas shopping depends on what you can afford. 

My take on this is to say to myself: 

What Can I Spend on Christmas Shopping and Everything Else Without Going Into Debt?

It's always early enough to start buying Christmas gifts, as long as you have the money saved to buy them. Below, I detail ideas, tips, and tricks for doing Christmas shopping on a budget.

Do a Shopping list research before you go, and give ideas for each person you are going to buy for. 

This will stop you from wandering up to a costly item and convincing yourself that she'll love it! 

Fair enough, but then the person you are buying for doesn't realize your pain while you pay your credit card off, right? 

If you write down two or three ideas about what each person would like, you are more likely to stick to it.

Set a Spend Limit for Your Christmas Shopping

From the outset, set yourself a spending budget. Ask yourself some difficult questions such as:

  • What realistically can I afford to spend on gifts this Christmas?
  •  What other household bills have I got due?
  •  How much money have I got spare without resorting to credit?

The first time I did this, the spare money I had left horrified me! I had a total of about £20. This was because I wasn't budgeting at all, which was the amount I had left in my account.

The important thing about this spending limit is that you can't go over this. It is easier to take this amount in cash, so I can physically see it, and it helps me take time for my decisions.

From Small Beginnings

From this amount, you can build.

I was determined to make this figure better and better each year. This has involved saving a certain amount every month and sending it to one of my friends. In return, she gives me a Christmas gift card, loaded with my money for Christmas. 

This way, I don't spend it during the year, and we have an instant Christmas budget of £250.

Read on for tips to do small cash work for you.

Looking Forward to 2020

Next year, I plan to save the cash into a sink funds envelope, as I became concerned over the last three years as to the safety of my money. This was nothing to do with trusting my friend. I had seen reports of other significant organizations going bust and not being able to pay people back the amounts on their gift cards

I am using this set of sinking fund envelopes from December's budget to save money for Christmas 2020. 

Here is my budget plan for Christmas 2020 filled out. I have filled it in with my thoughts for next year. This will then inform my saving envelopes. (sink fund envelopes)

I have changed my Christmas budget completely by starting early. Here's my Christmas 2020 budget
I punch my sink envelopes and cash envelopes and they fit nicely in a filofax #cashenvelopes #cashenvelope
To manage them, I punch my sink envelopes and cash envelopes and they fit nicely in a filofax #cashenvelopes #cashenvelope

Pay for Christmas Gifts in Cash

Cash is a significant spend stopper.

Suppose you pay in cash when Christmas shopping. It makes you think twice about handing it over. There’s something about having physical money in my hand that makes me aware that cash isn’t endless and will run out.

Result – I take more care and spend more wisely.

Leave Credit Cards at Home and Only Take Your Debit Card To Use in a Real Emergency.

Christmas Shopping Can Be One of The Easiest Things to Overspend on if You Take Them With You.

Christmas Shop Alone

If you shop with someone else, this becomes an easy way to overspend.

I know it sounds boring, but you avoid all the potential ‘spendy’ conversations like – aww, that would suit you – buy it!

If I shop with anyone other than Mr. Budget, this always happens to me. Mr. Budget enjoys the Christmas atmosphere, but there is no conversation around shopping because he finds it so dull! Also, he speeds me up – his time limit on shopping tends to be about two hours max!

Look for Sales at Other Times of The Year

You don’t have to reserve your sink envelopes purely for spending just before Christmas.

If I see a bargain, mainly just after Christmas, I will buy it. I need to have this amount in my sink envelope already. After the purchase, I marked down on my envelope who I bought it for and how much it was. Also, what is left in the sink envelope on that date?

Find out more about my cute Christmas cash envelopes.

Limit The Number of Toys You Buy

If you have kids, try to devise a limit for each child on how many toys or presents you will buy them. After all, how many presents can a child play with at once?

If you have noticed that some toys have never been played with, this could indicate that last year’s number of presents was maybe too many.

It’s worth bearing in mind that relatives will also be buying the kids presents, so they will probably have plenty, even if you cut down the number this year.

Get The Kids Involved With Saving Money on Christmas Gifts

You could explain to them what will happen, and ask them for ideas of free things you could do as a family that they enjoy. Tell them that family time in the holidays is a big part of Christmas too. You may be surprised about how well they get on board with this.

I have heard people ask their kids that if Santa had to afford Christmas for everyone, what would be the lowest number of presents that every child should get? Potentially this could backfire – like one of them saying, ‘I think he should give us 100 presents’, but it could be worth getting them involved in the money saving in this way.

Divide up Gifts and Wrap Them Separately

Buy presents that can be easily divided and wrapped separately.

So you buy a three-pack of character socks and wrap each pair up individually. A train set could be wrapped into as many pieces as your sanity allows!

The great thing about this is that you could have spent way less, but every person’s presents look like more than they would.

If you put the presents inside stockings for your kids, they will be kept busy for much longer, unwrapping each part.

Need this article for later? Pin one of my images straight to your Pinterest. 

Combine Christmas Gifts

Another solution for Christmas shopping on a budget would be combining gifts where possible.

Could you buy your sister and her partner a gift they will both love, say a coffee set, for $20, instead of paying $25 each for different presents?

Would your mum and dad love vouchers for an experience or their next holiday?

Use a Cashback Website or App Like Rakuten (Rebates)

If you live in the US, using Rakuten (Ebates) is something else you can do when Christmas shopping on a small budget. When you register with them, you can get cash back for everything you spend on your card. 

Rakuten supports using American Express Visa and Mastercard credit and debit cards. You can get cashback by spending online or in-store. 

Plan Way Ahead

This has been a major game changer for my Christmas budget. Now I have been able to quadruple my budget from four years ago, and I hardly notice it. You might not be able to do it this year, but now’s the time to start your Christmas budget for next year.

How to Budget for Christmas Gifts Way Ahead

  1. Write down everything you need on a Christmas budget planner.
  2.  Total it up and check – is it realistic? Can I afford each part?
  3.   Be familiar with what you usually spend monthly to estimate whether it is realistic. (My article on making a budget is helpful in creating a monthly household budget. )
  4.  Divide this figure by 11. This will give you a total figure to save each month. (Yes, I give myself a month’s breathing space because there might be unexpected items of my budget around Christmas, so I save for 11 months. )
  5.  Save this amount every month.
  6.  To make it easier, if you use my sink envelopes to do this, you can divide each budget area by 11 and take it to the nearest dollar.
  7.  Write the monthly figure you need to save on the front of the envelope and the total target amount.
  8. Give meaningful gifts for Christmas.

My final tip is to buy gifts with meaning, or check before you buy, what someone wants. My mum, for example, this year, was enthusiastic about telling me that she would love a pair of slippers. She knew exactly which ones she wanted, and I ended up paying so much less than I would have if I had tried to figure out which ones she wanted. Chances are she wouldn’t have worn the ones I’d chosen, either.

Some people argue that this is taking the magic out of Christmas, but I say that not only does someone get what they want, but they also save money on most occasions and avoid wasted Christmas presents. 

Another idea would be to use your talents to create presents. Can you paint, draw or design excellent graphics? Why not give one of your creations as a present, if you have time to do this.