How to Do Christmas on a Budget

Looking to save on Christmas expenses this year? You can totally cut back, save money, and still enjoy a great holiday. Here are some easy ways to do Christmas on a budget.

It’s one thing to budget for Christmas but it’s another thing entirely to actually do Christmas on a budget. There’s a lot more finessing to do in real life to get the numbers to crunch just right.

Like a good Christmas toffee, don’t ya think?

With the cost of everything eternally ticking higher without pay matching it, it can be enough to just shut oneself up with a bowl of gruel and forget the whole thing. Thankfully, you don’t need to go all bah-humbug.

There are plenty of ways to do Christmas on a budget and enjoy it.

Have a Christmas budget.

So, in order to enjoy a frugal Christmas, it’s good to give it an actual dollar amount. Saying you’ll spend as little as possible is different than saying you’ll spend no more than X amount of dollars.

Being specific about how much your budget Christmas can cost will help guide your choices. 

If you decide now how you will approach the holiday season, you won’t be swayed by all the hullabaloo that happens as Christmas approaches. Decide on a holiday budget, how many parties you will host, how many gifts you will give, and so on.

Doing it with a sane mind will help you save money later when everyone’s going crazy.

Furthermore, find a way to truly limit your spending. In years past I might have said pay with only cash dollars and coins. I still hold to that reasoning. When the cash is gone, you are done Christmas shopping.

That said, I know that paying cash isn’t always feasible, but I do recommend making sure you actually have the cash to pay for it. Don’t charge your Christmas spending. January You will hate you.

Consider buying gift cards in the amount of your Christmas budget for YOU to use while shopping. You can buy them from a number of retailers sometimes at a discount this time of year. When the card is empty, you’re done shopping!

Plan well.

Have you ever found yourself a day late and spending way more than your holiday budget? Lack of planning at the holidays can put you over budget quick.

Take some time now to plan and really hone in on your priorities this holiday season. Before you wrap a single gift, think about what’s most important. This will help you do Christmas on a budget according to your values.

Shop your house first.

What do you already have in terms of Christmas decor, festive foods, and even gifts? Take an inventory before you shop so that you don’t buy what you don’t need.

Build your plans around what you already possess. This will hep you do Christmas on a budget.

Can you find it free?

If there’s a book your kids want to read or a movie they want to watch during the days leading up to Christmas, can you borrow it from the library or from a friend?

Sure, building your collection of Christmas Read Alouds, movies, and music is fun, but if the money isn’t there, let this be the year you skip buying more. There’ll be other opportunities in the future.

Make presents.

For years making homemade gifts was my main mode of operation. I enjoyed the creative exercise crafting handmade gifts, and we saved money.

If you’re going to make gifts, set a deadline for yourself. You do not want to be crafting in the wee hours of Christmas morning.

Simple gifts that don’t cost a lot include:

• Smores Kits
• Wooden Card Holder for Playing Cards
• Microwave Heat Bags
• Spa Gift Basket

–> Check out my HUGE database of gift ideas you can make, including easy and inexpensive ideas for everyone on your list: kids, teens, college students, ladies and men.

Bake someone happy.

I love to bake cookies at Christmas time. Eat cookies. Give cookies as gifts. And eat some more cookies!

And believe it or not, if you package them properly, you can bake them a month in advance and store them in the freezer. Using your freezer also allows you to present a variety of cookies without spending a lot of time in one day.

Here’s how I make up a dozen different cookies without a ton of work.

Buy the affordable food boxes at Dollar Tree and package up the goodies as if they came from a fancy bakery.

Browse thrift stores.

Savvy shoppers are often able to find veritable treasure at thrift stores and consignment shops. If you’re new at it, find a friend who can show you the ropes.

If the person on your gift list loves thrifting, then gift them a shopping spree (within the budget, of course). That way, you’ll enjoy time together and they’ll get to share their hobby with you.

Thrifters love to show newbs the ropes!

Shop online via Rakuten

Since I order a fair amount online, I’ve found that using Rakuten works well all year-round to get a little cash back from online purchases.

In the past I’ve done my Black Friday shopping through Rakuten and gotten great deals, free shipping, and cash back from my purchases. Since I signed up in 2009, I’ve received over $2000 cash back.

Currently, new members can get $50 back if they make $50 worth of purchases in their first 90 days. Check it out with my referral link. 

Request free samples.

As you see offers for free samples of cereal, granola bars, snack bags, coffee, etc, request these and then save them for Christmas. They make wonderful budget-friendly stocking stuffers or additions to DIY gift baskets and they won’t cost you anything but self-control not to dig in right away.

Create a basket high on a shelf in your pantry to collect them and don’t tell the kids. Also, be sure to check expiration dates so you’re not gifting stale snacks.

Shop the sales.

If you see a great sale or clearance deal and are 95% sure it will make a good gift for a specific person, then snatch it up and store it in your gift closet. The key is making sure that you have a specific person in mind.

A lot of the things in my gift closet are great gifts, but I don’t have anyone to give them to! Be sure you’re right, then buy ahead. (I think Davy Crockett once said that.)

Plan for experiences.

Sometimes gift exchanges become stuff exchanges. Maybe this year instead of a pile of gifts around the Christmas tree, you might go on adventures instead. 

Plan more experiences than presents this year! One way to do that is to create DIY gift coupons that can be redeemed for game nights, back rubs, walks in the park, whatever you and your loved ones like to do together.

I heard about one family that does adventures each month, gifted at Christmas, but celebrated all year round.

Make do with less.

This is probably the most obvious as well as the most difficult way to save money at the holidays. But, there are lots of things that you might think are necessary at Christmas time, that really aren’t.

Talk with your family and find out what is really important to them. Make those things priorities and if the rest doesn’t fit Christmas on a budget, then do without it this year.

Christmas cards used to be a “must-have” for me. But, long ago I stopped sending them and haven’t looked back. The world went on without a holiday greeting from us in the mailbox.

Another year I bought a fake tree. To date, we’ve saved $450 in reusing the same tree!

Start planning early for next year.

You’re in the throes of this Christmas, what do I mean plan for the next one? As you go about your Christmas planning and shopping this year, give thought to the lessons you learn along the way.

Sometimes I get a great idea that I can’t pull off right away. If that happens to you, write it down so you can make that great idea happen next year. 

As you spend and cut back doing Christmas on a budget this year, consider how you can start a sinking fund for next Christmas season so budgeting will be easier.

Keep perspective.

The Christmas holidays are a wonderful time. They hearken to the child in each of us. We often dream of wonderful get-togethers, fabulous feasts, and memorable Christmas gifts.

However, even the best laid plans don’t go according to plan. And finances and jobs don’t always deliver as they should. We can have wonderful get-togethers, fabulous feasts, and memorable gifts – even without a lot of money.

And that is something to think about, no matter the status of your bank account.

I’d love to know what helps YOU do Christmas on a budget.

More Frugal Christmas Ideas

This post was originally published on July 29, 2010. It has been updated for content and clarity.