How to Budget for Christmas

Published on November 28, 2019 by Lauren

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  • Christmas is my favorite time of the year. The season is full of joy, gratitude, and quality time with family. Of course, the holidays wouldn’t be complete without presents. How do you pay for all those gifts? You may be wondering how to budget for Christmas this year.

    It’s easy for me to overspend since I often get carried away during the holiday season. I can honestly say that having a Christmas budget has been a huge help. I started a Christmas savings account years ago and have an automatic transfer set up to save money every month of $100. I use a Smarty Pig Savings account, it is super easy and has a high return!

    You’d be surprised how much less stress you have when you’ve got your Christmas spending covered. 

    But budgeting for Christmas is easier said than done. That’s why I’m sharing my favorite tips to help you organize your money so you won’t end up broke or in debt before the holidays are over.

    How to Budget for Christmas

    How to Budget for Christmas

    1.) Set up a Christmas fund to save money.

    They say every little bit helps, and it’s especially true when it comes to saving money. No matter if you’ve got three months or three weeks until Christmas, don’t wait another minute to start a Christmas fund.

    Create a separate account to stash money in or use a good ol’ fashioned cash envelope to hold your Christmas savings. Even if you add $150 between now and then, you’ll be that much closer to a debt-free Christmas. Set $100 aside every month and put it in a Smarty Pig Savings Account, this way you will have $1200 for Christmas next year.

    2.) Plan who you’ll buy for and how much you’ll spend.

    Planning is the secret sauce behind making a budget work any time of the year. For Christmas, it means creating a list of all the people you want to give a gift to and set a spending limit for each person. 

    Don’t let your emotions tell you how much to spend. A $20 or $30 gift budget is fine for most people. And your kids don’t need $300 in gifts, either.

    3.) Consider a side hustle to earn extra cash.

    Christmas is expensive. To get more money for holiday expenses, there are so many side hustles you can start. They’re my favorite way to make extra money since you can do most of them in your spare time. Chances are you have a skill or talent that someone will pay money for. You could also consider making money with surveys or by scanning your receipts for more holiday spending money.

    4.) Think of gift ideas early and write them down.

    Shopping at the last minute can lead to overspending. Keep track of gift ideas throughout the year by making a list on your phone or in a notebook. This way you’ll have a ready-made list of gifts to pick from when you start your Christmas shopping.

    5.) Use apps to save money on gifts, food, and decorations.

    Your money will go toward more than gifts during the holiday season. You’ll need to buy extra food for Christmas parties, stamps for Christmas cards, and decorations for your home.

    The best money-saving apps can help you cut costs on gifts and groceries and compare prices of gifts to stretch your budget even further.

    6.) Go the DIY route for gifts.

    Give a gift from the heart by opting for homemade presents this year. Your family and friends will appreciate the extra effort and thoughtfulness. Plus, DIY creations are easier to personalize for a one-of-a-kind treat. 

    If you’re not sure where to start, you might think about a homemade cinnamon hot chocolate mix, chocolate chip cookies in a jar, or Christmas coupon books.

    7.) Opt out of presents and spend time together instead.

    Everyone likes presents but Christmas doesn’t have to include gifts at all. Talk to your family and friends about forgoing the gift-giving tradition and make a plan to spend time together instead. You could have a family movie night at home, host a Christmas cookie exchange party, or have a meal together with your family or friends.

    8.) Leave your credit card at home and shop with cash.

    You’d be amazed how easy it is to overspend when you can rely on that little piece of plastic in your wallet. But what happens when you leave your credit card at home? 

    If you only have cash to spend, you’ll be forced to stick to your budget. You might like not overspending so much that a cash budget becomes your new best friend.

    9.) Stick to your shopping list.

    I already mentioned how I can get carried away at Christmas. Part of my overspending problem is buying things for myself when I’m supposed to be shopping for others. When doing your Christmas shopping, don’t be tempted to buy for yourself. Make a list and promise yourself (and your budget!) that you’ll stick to it no matter what.

    I’m not saying making a budget for Christmas is easy. But if you want to get and stay out of debt, you’ve got to get your spending under control. Make a plan ahead of time and start a side hustle if you need extra cash. Above all else, remember that Christmas isn’t about finding the perfect gift or winning the neighborhood Christmas light contest. It’s about spending time with those who mean the most to you, and that won’t cost you a thing.



  • Having a Christmas budget is a huge help. Instead of buying gifts for everyone, we’ve drawn names for the kids to exchange gifts. We’ve also played gift exchange games where if you want to participate you can. It’s fun to watch too even if you don’t participate.

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