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Christmas Budgeting Made Easy: 13 Ways To Save Money

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Try these 13 easy Christmas budgeting tips to save money and avoid overspending. You don’t have to go into debt to have a magical holiday!

Christmas is the most expensive holiday of the year for the majority of people.

But it doesn’t have to be!

There are several, practical things you can do that will keep you from crying when you look at your credit card statement on December 26.

Keep reading to see my best tips for Christmas budgeting, including some easy ways to save on decorations, family gifts, and ways to make some extra money.

Smart Christmas Budgeting Tips

1. Set a budget.

Christmas list used to create a Christmas budget next to calculator and presents.

This one may be self-explanatory, but you need to set a budget!

It doesn’t matter if it’s $100 or $1000, you should sit down with your partner (or yourself) and make sure you’re clear on the spending limit.

And I highly, highly suggest you don’t go into credit card debt to purchase Christmas gifts. Borrowing on credit surges over the holidays. But, hopefully, these tips will help you avoid using credit cards altogether this year. No potential excitement or spoiling is worth going into debt.

In the past, we’ve budgeted around $100 per person for immediate family, and then $25 for our sibling gift exchange and $50 for our parents. The amount of our Christmas spending has changed as our income has grown, but it was consistently $100 per person for several years and that was more than enough.

And don’t forget to include small things like stocking stuffers in your holiday expenses, because those can add up quickly!

Strive for a zero-based budget, meaning everything you spend, save, and invest adds up to the same amount of your income. That way, you’ll know where every single dollar is going.

2. Create a Christmas fund.

Once you’ve created a gift budget for Christmas, plan to set aside a little bit of money out of each paycheck or once a month to add to a Christmas fund.

Setting aside a small amount each month is a lot easier than coming up with the money all at once right before the holidays. This is especially true if you’re on a tight budget. Simply take the total amount you plan to spend for Christmas and divide it by 12.

If you’re reading this article in December, it’s too late to set up monthly payments for a fund, but you could still start putting aside money every week. Just remember to start your fund early next year.

You can create a separate bank account, funnel it into an app, or withdraw cash to keep in a safe place.

3. Protect your Christmas budget by tracking your spending.

It’s important to track your spending so your budget actually works. Make sure you’re coming in at or under budget for all of your spending categories. This will ensure you don’t go into debt.

Once you purchase a gift or item from your Christmas list, subtract it from the total amount you have to spend so you know how much you have left.

If you do overspend on something, you have two options:

1) You can make it a point to cut back on your overall budget the next month to compensate OR

2) You can borrow money from another line item in your monthly or Christmas budget.

4. Temporarily cut back on other spending.

If you need to, you can always temporarily cut back on non-essentials. Things like going to the movies, eating out, and getting your nails done can go on the back burner for a bit. Use those extra funds to finance your Christmas plans.

Small sacrifices over time can add up to big savings for your holiday spending.

5. Simplify your gifts.

Neutral and pink wrapped Christmas presents under a flocked Christmas tree with pink and silver decorations.

Christmas was always so magical growing up. My parents really tried to make it special by getting us what we put on our lists, but I almost wish they hadn’t. Looking back I can see what a financial burden it was for them to buy us the expensive toys we had asked for.

Of course, I want my children to feel the magic of Christmas, but I also don’t want them to get greedy and expect that they’ll get everything they ask for. Once you have your budget in place, the easiest way to make that budget count is to simplify your gifts.

We do this with the “four gifts” idea:

  1. Something to wear
  2. Something to read
  3. An item they want
  4. An item they need

We’ve organized our children’s gifts like this for several years and it’s amazing at the stress and anxiety it removes from Christmas shopping.

And it’s amazing how easy it is to stay in the $100 per person budget when I’m only looking for 4 gifts for each person!

Here are some suggestions for gifts from each category:

Something to Wear

  • Christmas pajamas
  • Dress clothes
  • Socks, underwear
  • Snow clothes
  • Dress-ups
  • Shoes

Something to Read

  • Board books
  • Chapter books
  • Magazines
  • Cookbooks
  • Busy books
  • Kindle
  • Handwriting books

Something They Want

Something They Need

  • A new backpack or lunchbox
  • Anything from the clothing category
  • A helmet
  • New bedding
  • Luggage
  • Toiletry Items

If you do Santa gifts in your family, you may need to adjust your budget to fit those in because those are usually in addition to the gifts you give your children.

You could do this by adding the gift they want as a Santa gift and only giving three gifts from mom and dad.

Or you could move some money around so they get four less expensive gifts from mom and dad and one expensive gift from Santa.

I’ve also seen parents suggest that Santa bring the more practical gifts like clothes, socks, etc. so that the parents can give the bigger, more exciting gifts.

This way, the parents are the big shots to the children and it helps any jealousy or disappointment for friends with homes where Santa can’t afford to bring an iPad or electric scooter or playhouse.

Just something to think about.

6. Make a list (and check it twice!).

Once you’ve decided on the clothing items your kids need, what kind of books they’re into this year, learned the items they want, and determined the things they actually need, compile each item into a list so you can stay organized!

Use your list to hunt for applicable items on sale, gather useful coupons, and find quality options for the most affordable price.

I keep a list on my phone and mark each gift off as I purchase it so I can see what I have left and what I’ve already bought. If you start your Christmas shopping early, it can be easy to forget what you’ve already purchased, so keeping a list solves that problem.

7. Avoid emotional spending.

Your list will also help you avoid emotional spending. Don’t get distracted by impulse buys or any begging or pleading from your kids. If it’s not on the list and not in your budget, it shouldn’t go in your cart! And if you can, try to avoid going into stores altogether and do your shopping online.

8. Amplify your Christmas budget with sales.

Black Friday sale tag with black ribbon in front of a hot pink background.

I can’t emphasize this enough: try not to buy a Christmas gift if it is not on sale!

It may be more difficult this year with several supply chain shortages, but if you really want to do Christmas on a budget, you have to make your money go as far as it can, which means buying gifts on sale and using coupons and promo codes for the best deals.

To make sure you are getting the best price on gifts, you have to start checking prices now. And to start checking prices, you have to have a list of items to check. So make your list, keep track of prices, and buy those gifts when they’re on sale.

This usually means waiting to do Christmas shopping until Black Friday Sales start. If you start buying gifts in the summer, you may be done early, but you may also spend more than if you’d waited.

If you do start shopping now to avoid any out-of-stock issues, here are a few tips to still save money:

  • Try to shop at stores that offer price matching through the holiday season. You can grab those gifts now if they are on sale, and get the price match later if they drop even lower.
  • Sign up for a store’s email list because they often offer 10%-20% off coupons as a new subscriber.
  • Bookmark the more expensive gifts you want to buy so you can check frequently to see if the price drops (this is especially true for Amazon items).

9. Spend less of your Christmas budget with freebies.

Woman holds up a cellphone with a cash back rewards app on the screen.

What’s better than saving money on your Christmas gifts?

Getting those Christmas gifts with money that’s not yours!

Let me explain:

Every quarter, my husband gets $50 toward several different gift cards if he does certain health challenges for his job. When we get the $50 in the 4th quarter, I always use it to get our parents’ gift cards.

So they get a date night and it’s no money from our pocket!

I understand that not everyone works for a company that offers incentives like that, but there are several other rewards programs out there that offer the same sort of benefits.

Fetch Rewards

I’m sure you’ve seen the grocery shopping apps where you get rebates for purchasing certain products, ya-da, ya-da.

I’ve downloaded several of them myself and they usually turn out to be a big waste of time because you have to purchase expensive items that aren’t pantry staples for most families.

Well, I was super hesitant to download Fetch Rewards, but I’ve been really surprised at how easy it is to use!

You just scan your grocery receipt every time you go to the grocery store and you get points no matter what!

You then redeem those points for gift cards! It’s so awesome! Plus, it’s free!

It does take a little while to rack up the points, but to get you started, use my referral code, LOVELOVELOVE, during signup and you’ll get 2,000 Fetch Points ($2.00 in points!).

1-2-3 Rewards Mastercard

I have a Smith’s Mastercard and I get a certificate 4 times a year that varies from $15-$30. When I get my certificate in November, I can put that toward purchasing gift cards or stocking stuffers from Smith’s!

Feeding Reading Program

If you buy Kellogg’s products, you should sign up for their Feeding Reading program to get the books for your ‘something to read’ gift for free!

They have a variety of books for every reading level for kids. I’ve done their program twice now, and decided to keep the books for my kids until Christmas and give them as gifts.

You do have to submit your receipts by September, so make sure you make a note for next year if you missed it this year.

I’ve also seen reward programs for diapers, frozen meals, credit cards, and grocery stores, so take a look at where you’re shopping frequently and what you’re buying to see if you can’t get rewards from shopping.

Delta Card

If you want to give the gift of travel for Christmas, you should consider signing up for a Delta Skymiles American Express!

You’ll get thousands of bonus miles when you spend a certain amount in the first 3 months and it’s often enough to get at least 2 round trip tickets to somewhere in the continental U.S. Plus, you get 1 free checked bag per passenger with the card.

We love flying Delta and the benefits of the card have made it much cheaper to travel!

DIY Gifts

Another way to get gifts for free (or cheap) is to make DIY gifts!

Some ideas are:

  • If you like to sew, you could make blankets, pillows, or doll clothes.
  • Good with wood? Consider building frames, décor, or furniture.
  • If you like to bake, you could put together pre-measured baking mixes of some of your best recipes.
  • Skilled with paint or do graphic design? You could create wall décor, custom mugs or personalized t-shirts.

You can check out my ultimate guide of easy DIY projects for more ideas with step-by-step instructions.

10. Earn some extra money.

Several rolled up dollar bills in a large pile on white background.

One way to ensure you don’t go into debt for Christmas presents is to earn some extra money. You can do temporary things like selling old stuff around your house, donating plasma, or delivering food for a few nights.

If you want a more consistent stream of income, you may want to look into a part-time job. There are lots of options out there for real stay at home jobs! Some of the ideas are:

  • Virtual assistant work (bloggers are always looking to hire!)
  • Online surveys
  • Turn your hobby into a business (if you craft, do photography, do handyman work, etc.)
  • Become a nanny

You can also ask your friends and on social media if anyone is hiring work-from-home positions. You never know who has the right connection unless you ask!

11. Don’t waste your Christmas budget on pricey wrapping paper, cards, or décor.

Budget-friendly Dollar Store Christmas cards and tape on a white table.

Not only can Christmas gifts get expensive, but all of the wrapping paper, bows, and bags can also add up. And don’t get me started on how expensive cards and Christmas décor are.

Here are a few tips for cutting down your Christmas wrapping, cards, and décor budget:

Packaging and Cards

  • Get your cards, wrapping paper, and bags from the dollar store! I have an entire post on my favorite dollar store finds, and two of them include Christmas cards and gift bags. I always get beautiful $1 cards to give our parents every year, and you could never tell they came from the dollar store.
  • If you’re really crafty you could also make reusable cloth gift bags to keep year after year.
  • If you’re getting packages delivered frequently (hello, Amazon Prime) save any brown packing paper. It makes a great wrapping paper that you can customize with stamps, lettering, and fancy ribbon.
  • Speaking of ribbon, you can make a beautiful decoration for gifts with scraps you have lying around the house, so check there before you go out and buy new spools.
  • If you have Christmas cards from years past, don’t throw the cute ones away! You can cut the back off with the personalized note, and use it as a fancy tag for this year’s gift.
  • For the cards you send to family members and friends, make sure your pictures are done early so you can buy your cards on Black Friday. Lots of printing companies have sales that weekend. And if you really can’t spare the money for a physical card, a digital one works just as well!

Christmas Décor

  • When it comes to Christmas decor, it can be tempting to buy everything you see in sight. Make sure you shop the sales and only buy things you really need. Don’t let these items take up a huge portion of your holiday spending.
  • If you’re just starting out or have changed your style, buy things a little at a time. It will take a few years to get all of the decorations you may need, but you’ll stay within your budget.
  • And of course, you can always DIY your Christmas decor! I made glam Christmas trees out of cereal boxes when I was a newlywed that I still put up every year. I also flocked my own tree to save money. Check out my post on glam Christmas decorations on a budget for more ideas.
Mom and daughter decorate a Christmas tree as part of their family tradition.

12. Cut down your gift list.

It may sound a little harsh, but if you’re really strapped for cash, consider removing some people from your gift list. Extended relatives, teachers, and co-workers don’t always need a gift and may not even expect one. You can also set up a gift exchange with immediate family or friends so you’re only responsible for getting a gift for the person you’re assigned.

Another great way to limit the number of gifts you have to buy is to give group gifts. Instead of buying something for each member of a family or your friend group, do one big gift they can all enjoy together like a nice dinner or a trip to the movies. This is a great way to utilize gift cards you may have received through rewards programs.

13. Save your Christmas budget by re-gifting.

There is no shame in re-gifting! If you have items sitting around the house not being used that you know someone else would enjoy, wrap it up and get it under their tree! Re-gifting is great for your wallet and also great for the planet. Your once-needed or once-adored items can find another loving home!


How much should you budget for Christmas?

In 2022, the average American is expected to spend $832 on Christmas gifts and expenses, but that is not required and it really depends on your income.

Look at how much you typically save in a month and decide what portion you can responsibly devote towards a monthly Christmas fund. Or, if you know how much you generally save year over year, decide a total amount you’re willing to channel towards a Christmas budget and divide by 12.

It’s never a good idea to go into debt for Christmas, so try to make your Christmas spending fit within a zero-based budget.

If you can, consider temporarily cutting back in other areas of spending to offset your Christmas expenses.

How can I make Christmas special with no money?

There are lots of ways to have a magical Christmas on a tight budget or with no money at all. Here are 9 ideas to get you started:

1. Take advantage of free community Christmas activities and attractions.
2. Climb in the car and take a drive to see the Christmas lights.
3. Use your existing grocery budget to make holiday-themed meals, desserts, and treats.
4. Watch Christmas movies.
5. Participate in service opportunities.
6. Listen to lots of Christmas music.
7. If you have existing decorations be sure to put those on full display.
8. Make DIY Christmas gifts with existing supplies or within your existing grocery budget.
9. Give your time instead of presents.

Want More?

If you liked these tips for your holiday budget, be sure to check out my ultimate guide of frugal living tips as well as these 30+ family Christmas traditions.

Your Turn

What did you think of these Christmas budgeting tips? Anything you think I should add? Let me know in the comments!

Pinterest graphic with text and Christmas list next to calculator and presents.

Ashley Ziegler

Monday 16th of November 2020

This was helpful! Thanks Jessica!

Jessica Ashcroft

Wednesday 18th of November 2020

Glad you liked it Ash!