Have you ever asked yourself – How can I have a great Christmas on a budget? Well, Christmas is notoriously a time when people spend a lot of money and rack up lots of debt buying Christmas gifts for their loved ones. Many times, without much of a plan to pay off debt.

However, when the holiday lights go out and the New Year begins, those credit card bills appear, and they have to pay off those empty bank account statements. It is never fun to open those depleted bank statements. Ever.

How much the average person spends on Christmas

Christmas is an expensive holiday! Americans spent an average of $976 on Christmas gifts alone in 2019. It doesn’t include shopping, food, or even fun holiday activities, such as decorating a tree. People often think that if they buy inexpensive Christmas gifts, they have saved money, but this is often not the case. It adds up quickly.

Holiday finances – Did you know:

Borrowing on credit surges over the holidays?

Some people never get out of the cycle of credit card debt because they spend all year paying down debt only to get sucked back in due to holiday spending?

Credit card companies create special holiday-themed marketing campaigns around certain dates? They often offer promotions of 0% interest for a limited time to encourage customers to sign up for their services.

Crazy? Well, that won’t be you this year! You know you are probably going to be spending the money on Christmas. It occurs every week and all year round.

You don’t know the exact amount (which we’ll talk about later), but you know that no matter what, you will be paying for gifts.

Creating a budget will allow you to save a smaller amount each month as opposed to having to pay all the money upfront, and you can avoid getting in over your head.

Even if you’re not a frugal individual, setting a budget for Christmas gifts can still help you.

Expenses to consider when creating your Christmas budget

When creating your Christmas budget, you should account for all of the expenses, not just the gifts. Items such as wrapping paper, boxes, bows can add up quickly.

You can save lots of money on these items by shopping at Dollar Tree or Dollar General Stores for your wrapping paper items.

You should also consider your transportation costs, such as gas, hotels, or plane tickets. You can save money on travel fairs by using websites like booking.com and reserving beforehand for lower prices.

If you are having Christmas dinner at your house, remember to buy all of the food you will need. Consider the size of your guest list when making your list, the more guests you have, the higher the cost will be.

You can create a Christmas budget and fitness regimen to have a great vacation without having to overextend yourself financially.

How to save money when you are planning Christmas on a budget

Now we will look at ways to save money on Christmas in advance so that you will be able to enjoy the holiday season comfortably.

1. Make a list of who you are buying gifts for and how much you need to save

Next, make a list of the people you are buying gifts for, and the total amount you are willing to spend on each person.

I would also include any travel expenses you may expect or expenses that may arise, such as food for a holiday meal. The total amount is approximately what you are saving from now until November.

Why November? In November, you’ll generally have several months to save some cash. This is also when holiday sales begin, and you can find some excellent bargains on items you have yet to purchase.

If you want to save money, that would be ideal, but spending more would be a terrible decision because it would destroy your budget.

I am always able to save at least an additional amount over what I say I will spend on something because things often change. I may fail to purchase a gift for someone, or it may be more expensive than I had anticipated.

Turkeys burn. Kids rip their tights right before the family photos. Someone might forget Grandma at home and spend extra money on gas. It is better to have saved more money than to go over budget.

By setting aside money as soon as you can, you will be prepared before the holidays hit. You’ll also be preventing yourself from being saddled with debt.

No longer ask yourself how much you can afford to charge since that has already been predetermined and saved by you.

If you are interested in gift ideas, check out our gift guides.

2. Open up a designated Christmas savings account to use as a sinking fund

Once you know how you intend to spend your money from now until Christmas, you should decide how to spend it so you don ‘t quickly spend it all. Some people use sinking funds to get ready for the gift-giving season, so they don’t have to save up a large amount of money at one time.

To do so, you can set up a savings account that you designate exclusively for Christmas or holiday savings and call it accordingly. You may also wish to automate your deposits into this account.

You should not be able to easily transfer funds back and forth from this account; otherwise, you may find that you are spending instead of saving the money you are trying to save for the holidays.

When it is time to transfer the funds to your checking, you won’t feel bad spending it all on presents because it is your intention for these funds. An excellent budget category to save for Christmas is a Christmas Club Account.

Christmas On A Budget
Christmas On A Budget

3. Build saving for Christmas into your budget

Now that you know how much you have to save for Christmas, you should include this amount in your budget.

To determine how much you should set aside each week to save money, divide the total amount you need by the number of weeks you have until Thanksgiving.

This will supply you with a good idea of how much you ought to set aside on a weekly basis for your gift. You can then subtract that amount from your weekly or monthly budget to determine how much to save.

4. Plan your Christmas shopping ahead and shop smart

November is the start of the sales season. It’s also a time when it’s easy to be sidetracked by the attractive ads. However, having a plan makes it easier to stick to your guns.

I recommend that you get your holiday shopping done as soon as possible. If you choose to go to a physical store, plan your trip accordingly. Map out the days you will be shopping, the stores you will visit, and what you will buy.

Also, do not leave the credit cards at home and use the money you saved. Remember, the primary goal is to not incur any travel expenses at all.

You also want to take advantage of any coupons or cash back apps, such as Rakuten or Ibotta, to make sure that you are getting the most out of each purchase. I love shopping at stores such as Kohl’s and Target because then I can save the in-store rebates.

These are often provided in the form of store credit or gift cards. I can use them on a later purchase. This allowed me to buy a winter coat for my friend and acquire Christmas presents for children free of charge!

5. Stay motivated to save money for Christmas

Like any good budget, it’s vital to find any cost savings or freebies you can cut back on. Now is the time to make plans for low-cost or no-cost activities your family might enjoy over the summer while school is out.

Library programs often have great activities for adults and children alike in the summer. If you are single, you may travel less or find free things to do. Summer can either be an inexpensive or expensive season depending upon your priorities and where you happen to be located.

I’m also a strong believer that we cannot save what we don’t earn. So while you’re operating your runs, check out if it is reasonable, or even required, for you to pick up a side gig for Christmas.

To successfully complete your project, you will need to remain dedicated. It’s best to get a discount partner (AKA an accountability partner), so you can track each other’s progress and support each other. Think of someone who would be interested in joining you during the holidays and check in together every week.

6. Get creative with your Christmas gift-giving

I believe that less is more. I believe that I ought to protect our planet for citizens, but I must remember that they may not necessarily need as much help as I initially thought. One shirt is preferable to five different shirts in different colors. In the majority of situations, providing only one gift is sufficient and will help you stick to your budget.

Do you like making things? Another creative way to save on Christmas gifts is to make them yourself. It can be physical items like clothing or accessories or homemade baked goods such as cookies and cakes. You may also consider offering experiences instead of things.

I’ve had a lot of things given to me over many years, but the greatest thing I’ve ever received was a lifetime of unforgettable experiences. Take the time to create memories instead, and you’ll maintain your wealth forever.

Tips to earn more money towards savings for the holidays

If your Christmas shopping costs aren’t quite what you had in mind, you can still earn extra money to donate to the holiday. Many businesses hire temporary workers during the holidays. This is an opportunity to put extra money in your savings this Christmas.

Do you want to save even more money while on the job? You can also find employers that offer generous employee discounts, and you can shop where you work as well and save money.

Another fantastic way to reduce your costs during the holidays is to start a sideline gig which you can carry out from the comfort of your home. Sideline gigs are part-time jobs that can fit easily into your busy daily routine.

There are plenty of simple ways to earn quick money. You could also earn extra cash by cashing in your spare change and depositing it into your Christmas savings account.

Christmas on a budget: Alternatives to buying presents

There is nothing more valuable than the gift of time or giving a hand. Rather than getting a gift, you can assist a friend or a loved one in other ways. Maybe you have an older or disabled family member that can’t move around very well. You can help them by performing household chores, gardening, or running errands for them.

You can pick up inexpensive photo albums at the Goodwill or Thrift Store. You can make a personalized photo album or scrapbook for your loved one with inexpensive photo albums. Shutterfly is an excellent website for making photo albums and gifts at a great price. They offer coupons and discounts, and it’s easy to arrange your photos and order.

Do you have something someone close to you just loves whenever they see it? Would you be willing to part with it for a friend or family member? Maybe you have a designer purse your cousin can’t afford, and she’d love to have it. The gesture of giving up something people enjoy to make others happy is one of the greatest gifts of all.

Another option is to buy used items on Christmas budgets. You can find great deals on valuable jewelry, brand name devices, musical instruments, electronics, and more at pawn shops, secondhand stores, and online. You can save up to 50% off retail prices by purchasing used.


Using these suggestions, you can set yourself up for a successful financial holiday and come out on top of the Christmas season with your financial goals intact.

Our goal is to stick to your plan, no matter how challenging it may be. If you need inspiration to save money, take advantage of one of our free money saving challenges to get started!


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