Christmas On A Budget

Ever asked yourself – How can I have a great Christmas on a budget? Christmas is notoriously a time when people spend tons of money and pile on the credit card debt to buy presents for all their family and friends. Often times tey do this without any plan to pay off debt. After the holiday lights dim, the new year rolls in and passes, and those credit card bills  starts coming due, they open up some depleted bank accounts and that’s never fun.

How much the average person spends on Christmas

Christmas is expensive! The average American spent $976 on Christmas gifts alone in 2019. This doesn’t include other things like travel, food, or any other fun for Christmas, like a tree! Sometimes people think that if they are buying cheap Christmas gifts, they are spending less, but the truth is, it all adds up fast.

Expenses to consider when creating your Christmas budget 

First things first, when creating your Christmas budget, you need to consider all of the expenses, not just the gifts. Things such as wrapping paper, boxes, bows can add up quickly. You can save money on these items by shopping at the Dollar Tree or Dollar General Stores for your gift wrapping items.

You also want to consider your travel expenses such as gas, accommodations, or airline tickets. You can save money on travel fair using sites like and making reservations in advance for cheaper rates.

If you are considering having a Christmas Dinner at your home, you will need to factor in the expense for all of the food you need to purchase. Keep this in mind when making your guest list because the more, the merrier, but the more people you have, the more expensive it will be. By creating a Christmas budget and savings plan, you can have a great holiday without racking up too much debt.

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

Now, let’s discuss how to save money for Christmas over the months before to make sure you get through the holidays financially sound!

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

First, make a list of who you plan to buy gifts for, and the maximum amount you are willing to spend on each person. I would also add any travel you may anticipate or expenses that may pop up, like food for a holiday meal. The total amount is what you are going to be saving for in between now and November.

Why November? Well, it gives you a few months to put some money away in savings. This is also typically when sale season starts, and it’s possible to find some really good deals if you haven’t snagged these items already. If you can spend less, that would be great but spending more is a big NO because that could totally ruin your budget.

Speaking of spending more, I always save an additional amount on top of what I say I am going to spend because stuff happens. I forget about a gift I need to buy for someone, or something ends up being more than I had originally estimated. Turkeys burn. Kids rip their tights right before the family portraits. Somebody might forget Grandma at home and have to spend additional gas money. It’s best to have extra money set aside than go over budget.

By putting money away as early as you can until Thanksgiving, you’ll be ready to go before the holiday rush starts. You’ll also be saving yourself from financial stress. No more wondering how much more you can afford to spend because that number has already been predetermined and saved by you.

2. Open up a designated Christmas savings account

Once you have decided what you will be saving from now until Christmas, you can decide how best to organize the funds so you don’t spend it. Some people use sinking funds as a way to prepare for the gift-giving season, so they don’t have to come up with a large amount of money at once. To do this, you can open up a savings account that you designate specifically for Christmas or holiday savings and name it accordingly. You could also consider automating your deposits.

You shouldn’t be able to easily transfer funds back and forth from it; otherwise, you might find that you are spending instead of saving the money you are trying to put away for the holidays. When the time comes to transfer the sinking funds into your checking, you won’t feel guilty, spending it all on gifts because that is your intent for this money! A great account type to save for Christmas is a Christmas Club Account.

3. Build saving for Christmas into your budget

Now that you know how much you need to save, you’ll want to incorporate this amount into your budget. How do you do that? Depending on how much you need in total to purchase your gifts, you’ll want to divide that dollar amount by the number of weeks you have between now and Thanksgiving.

This will give you a good idea of how much you should be putting away each week towards your gifts. You can then sum up that weekly amount to determine what your biweekly or monthly savings should be.

4. Plan your Christmas shopping ahead and shop smart

November is the beginning of the sale season. It’s also a time when you can easily get side-tracked with all the fancy advertisements. However, if you have a game plan, it’s much easier for you to stick to your guns.

I highly recommend you shop online and get your gift buying out of the way early. If you decide to go to a store, then plan ahead. Map out what days you’ll be shopping, what stores you’ll be visiting, and what you’ll be buying. Also, you’ll want to leave those credit cards at home and use only the money you have saved. Remember, the whole point is to avoid racking up any holiday debt whatsoever.

You also want to make sure you use any coupons or cashback apps, like Rakuten or Ibotta, to make sure you are getting the most bang for your buck when spending. My wife loves shopping at places like Kohls and Target because then she can save the instore rebates. These are usually given in the form of store credit or gift cards, and she can use them on a later purchase.

5. Stay motivated to save money for Christmas

As usual, it’s important to find any expenses in your budget you could cut or spend less on. This may be a good time to decide now on what cheap or free activities your family may be participating in this summer while school is out. Libraries always have great summer programming for both children and adults alike. If you’re single, it may be that you travel less or also find free things to do. Summer can either be a cheap or expensive season based upon your interest and dependent on where you live.

I’m also a firm believer that we can’t save what we don’t earn. So while running your numbers, see if it’s reasonable, or even needed, for you to pick up a side hustle for Christmas.

In order to successfully execute your plan, you are going to need to stay committed. It’s a good idea to get a savings partner for accountability, so you can keep tabs on each other and help each other succeed. Think of someone interested in joining you as you save for the holidays and plan weekly check-ins with them!

6. Get creative with your Christmas gift-giving

Enjoying making things? One creative way to save money on Christmas gifts is to make gifts yourself. It could be physical items like clothing or trinkets or home-baked goods like cookies and cakes. You may also think about giving experiences instead of things. I’ve had a lot of stuff given to me over the years, but experiences are what are remembered most. Create memories instead, and watch your money last.

Christmas on a budget: Alternatives to buying presents

There is nothing more precious than the gift of time or lending a helping hand. Rather than buying a gift, you can help a friend or a loved one in other ways. Maybe you have an older or disabled loved one that can’t get around very well. You can help them by doing household chores, gardening, or running errands for them.

A picture is worth a thousand words. You can pick up photo albums cheap at the Goodwill or Thrift Store and make a personalized photo album or scrapbook for your loved one. Shutterfly is an excellent site to create photo albums and gifts at a great price. They offer coupons and discounts, and it’s easy to upload your photos and order.

Do you have something one of your friends or relatives just raves about every time they see it? Can you part with it? Maybe you have a designer purse your cousin can’t afford, and she’d love to have. The gesture of giving up something you love to make someone happy is one of the greatest gifts of all.

Another alternative to buying gifts on a Christmas budget is to shop secondhand. You can find fantastic deals on gorgeous jewelry, name-brand tools, musical instruments, electronics, and more at pawn shops, thrift stores, and online. You can save up to 50% off retail prices by shopping secondhand.


With these tips, you should be able to put a solid plan in place to avoid holiday debt and come out on the other side of the Christmas season with your financial goals intact. The goal is to stick to your plan, no matter what. If you need motivation to save money, leverage one of our completely free savings challenges to get the ball rolling!

Here’s to a happy and financially sound holiday season!

Budgets Suck. Do This Instead.

Budgeting sucks; it’s really boring and most of us never stick with it. Learn an easy way to (not) budget in only a few minutes a month.

Don’t get me wrong. I’m not saying you should just throw caution to the wind and blow your money on whatever you want. Becoming Financial Independent requires a certain amount of discipline, which means you can’t turn your expenses into a money inferno. BUT that also doesn’t mean you have to cut expenses down to the bone.

rectangular red Supreme container

Old-school personal finance books tell you that if you just create a budget and stick to it, then you’re all set and your money problems will be solved. But anybody who has ever tried budgeting knows it isn’t quite that simple or easy. 

In fact, only one out of every three Americans creates and follows a long term financial plan. Obviosuly budgets work for some but we will cover a different approach to manual spreadsheets, 50/30/20 , and the envelope method.

You know you should budget, but you also know you’re not really going to do it. Learning how to budget isn’t the problem, the information is out there.

You can visit any one of hundreds of personal finance blogs to read about budgeting techniques:

  • You can download free spreadsheets on countless sites
  • You can pick up one of hundreds of books
  • You can use any one of dozens of budgeting apps, many are free

Even if you track every dollar and dime you spend for 30 days… you’re still human.

Over the past 10 years in the navy, I’ve messed around a lot with my budget. I’ve set monthly budgets, annual budgets, and weekly budgets.

I’ve tracked my spending using paper and pencil, spreadsheets, and apps like And through this I’ve learned alot.

Tracking spending manually is pointless.

I never keep up or on top if it for very long. And I’m a financial blogger and nerd about this stuff.

Spreadsheet, Graph, Chart, Report, Theme

If I can’t do it, how can I expect you to. Monthly budgets are useless because it’s so easy to underestimate our monthly expenses.

There are some you pay for every month, such as housing, transportation, utilities, food, and debt payments.

Then there are things you pay for less often like car repairs, home improvements, trips and vacations, holiday gifts, and insurance payments. For you, these less predictable expenses may only be 10 percent or so of your total spending. But for me they’ve crept up to more like 30 percent.

And here’s what this means. Accounting for, and “pre-spending,” every dollar you make can be a financial mistake.

If you take your annual take-home pay, divide it by 12, and proceed to spend that amount every month, you’re going to be in trouble when that unexpected expensive repair comes up, or any of lifes financial curveballs comes your way. 

So what you need to do is stop obsessing over the detailed, track-every-penny budgets you’ve always been told were the solution and instead, you need to implement a simple spending plan that’s easy to set up and easy to follow. 

What is a simple spending plan?

A simple spending plan is an easy way to budget that helps you save money, get out of debt, pay your bills on time, and still allows you the freedom to spend money on things you value or keep you sane, within reason of course.

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Step 1: Track your spending automatically

Budgeting is simple: Subtract your bills from what you earn; save or spend what’s left.

Forget about manually tracking every beer, energy drink, coffee etc. The goal is to set up a system that keeps track of all of your spending electronically without any additional work from you so that you can access it as you need to.

An easy way to do this is by using the single-card method. This is when you use a single debit or credit card for all of your purchases, or as close to all of them as you can, and let technology do the tracking for you.

One of the best ways technology can help our wallets is by eliminating the need to use cash, and therefore, eliminating the need to keep track of our cash expenses. Now this is counterintuitive to what most of the old-school financial gurus say about cash helping you spend less.

Electronic payments are here, like it or not, and the number of times you need cash (for anything) over a debit or credit card are fewer and fewer. But the best thing about using a credit or debit card is that you automatically have a record of all of your spending.

So should you use credit or debit?

An age-old question. If you have a tendency to buy things first and figure out how you can pay for them later, stick to a debit card. But if you’re comfortable with a credit and only charging what you can pay back in full each month, credit cards are more useful than most debit cards for tagging and categorizing your purchases, as well as cash back and rewards that they offer.

Find the best credit cards, how to choose the best card for you, and how to use credit cards responsibly at

If a single card isn’t for you, an alternative to the single-card method are personal finance management (PFM) tools. These applications link to your credit and debit cards, aggregate your transactions, and can even categorize them automatically.

You set spending limits, and they can send an email or text when you hit them. These apps are powerful and effective, if of course, you remember to login occasionally and make sure the categories are right, and view your spending.

But even if you don’t, that’s OK. The important thing is that data is there if you need it.