INSIDE: Christmas shopping can easily get out of hand. Learn how to set a Christmas budget so you can make it a great one without doing into debt.
You need a budget, especially at Christmas. Here’s how to set a Christmas budget for your family that works!
To set a Christmas budget, decide what you can afford to spend this Christmas
Knowing how to set a Christmas budget comes down to what you can comfortably afford. How much money do you make per month? Now subtract all your expenses? How much is left over? How much of the leftovers do you feel comfortable putting towards gifts?
There’s no magic number for exactly how much you should spend on Christmas. Each family has a different budget and different circumstances. But, be reasonable. Don’t go into debt in order to buy gifts.
Once you’ve come up with a number that is right for you, write it down and stick to it. If you want to buy a family member something special but it’s over budget, then either wait for it to go on sale or come up with a new plan. And don’t be so hard on yourself.
Avoid falling for the “perfect Christmas myth.” Your kids will be okay if they don’t get every single thing on their list. Don’t go over budget because you’re trying to make the holidays perfect. And it’s never a bad idea to teach your kids about a holiday budget.
- Pro tip: You can still have a magical Christmas on a budget — get our tips on How to Do Christmas on a Budget.
- Another pro tip: Download our free Christmas Planner Bundle and help take some stress out of Christmas!
If your budget is lower than you want it to be, consider ways you can make more money for Christmas.
Our best tips for staying on budget this Christmas
In order to set a Christmas budget and stick with it, try these tips…
Keep gift-giving simple
When it comes to my extended family, we’ve been doing Secret Santa-style gift swaps for years. Not only does this reduce the amount of money that you need to spend, but it also reduces the stress of trying to come up with a thoughtful gift for every uncle and cousin that you only see twice a year.
Make a list and stick to it
Once you’ve decided on a gift-giving strategy, then you’ll know exactly who to need to buy gifts for. Create a list of names and determine how much you can budget for each person. Based on your list, you can start brainstorming gifts that align with your budget.
Give experiences, not things
If you’re having trouble deciding what to give people for Christmas, remember, give experiences, not things. Experiences are more meaningful than things, and the memories you create from a good experience can truly last a lifetime. Passes to a museum, amusement park, or a gift card to a fantastic restaurant are great gift ideas.
How to save money on Christmas gifts to stay on budget
Between gift-giving and holiday entertaining, Christmas can get expensive. That’s why you set a Christmas budget to begin with. But, in addition, here are some gift-giving tips to help you stay on budget:
Follow the four gift rule
When it comes to the act of gift-giving, keep it simple. There are a ton of super fun gift-giving strategies that allow you to celebrate the tradition of giving without spending a fortune. My kids are still young, but we’ve started practicing the four gift rule, which is:
- Something you want
- Something you need
- Something you’ll wear
- Something you’ll read
This is a great strategy to help keep you on budget while shopping for Christmas gifts.
Give a gift card
Yes, you can argue that a gift card doesn’t qualify as a super thoughtful or meaningful gift. All I know is that I would prefer a gift card over an ugly sweater or smelly candle. Also, gift cards are a great way to stay on budget. All you have to do is pick an amount or assign an amount that fits your budget. No waiting for a sale and no overspending necessary.
Give a homemade gift for Christmas
Are you super artistic, an excellent baker, or a woodworking genius? Then consider giving a homemade gift to help you save money and stick to your Christmas budget.
There’s a reason why online marketplaces like Etsy are so popular. It’s because there’s a demand for beautiful homemade products. However, if the extent of your creativity involves a glue stick, macaroni, and glitter then perhaps this is not the budget-saving tip for you!
Advantages of shopping for Christmas all year
If you’re a planner, this strategy could work for you. Although it’s strange to start to think about Christmas shopping in March or April, there are a lot of advantages when it comes to Christmas shopping all year, as opposed to saving it all for November or December. So, start celebrating Christmas in July and reap some of the financial and emotional benefits.
If you can wrap your head around the idea of shopping for Christmas gifts all year long, then there are quite a few major advantages to doing it this way:
It’s easier to stick to your Christmas budget
Can you even imagine the Christmas holidays without last-minute panic shopping? Even if you set a Christmas budget, it can easily get blown away when that happens.
When you break up your Christmas shopping over several months or even an entire year, you can make a plan. You can shop for items when you know they’re on sale, and you can take some time to save for things before making a purchase. This can help you avoid going into a ton of debt at Christmas time.
According to a report by Statista titled, “U.S. Christmas Season,” the average American expects to spend $846 on Christmas gifts. If this seems accurate to you, then divide this by twelve months, and you can set a ballpark budget of $70.50 per month.
Early shopping means you can avoid the crowds
While 64% of U.S. consumers purchase gifts online, many of us also find ourselves in a mall during the holidays. And, in my personal opinion, there is nothing worse than a crowded mall at Christmas. Everyone seems to be grumpy, in a rush, and deplete of holiday cheer. No thank you.
It can result in more thoughtful Christmas gifts
When you have a list of people you need to buy gifts for and months to do it you can take the time to come up with more thoughtful gifts. This is opposed to the regular last-minute shopping sprees where you are trying to think of something, anything that would make a decent present for your nephew or second cousin.
It can make the holidays less stressful
Wouldn’t it be nice to have some time to relax around the holidays? How would it feel to sit down with a warm coffee or a nice glass of wine on December 23rd instead of searching for last-minute Christmas gifts in a crowded store?
When you shop for Christmas all year round, you don’t need to be at the mall searching for a parking spot with everyone else. You can take some time to relax and really get into the holiday spirit.
You can go into the new year on a financial high note
It’s all fun and games in December but January can be a real bummer if you overspend during the holidays. When you shop for Christmas gifts all year, you can start January on a high note and focus on achieving all of your New Year’s resolutions rather than waiting for your scary holiday credit card bill.
Don’t forget to budget for each family member’s Christmas gift
If you like the idea of shopping for Christmas gifts throughout the year, then it’s a good idea to still set a Christmas budget. Just as you can overspend during the last-minute Christmas rush, you can also overspend on Christmas when you’re shopping throughout the year if you don’t have a plan.
Remember what Christmas is really about
This Christmas give yourself the gift of more time, less stress, and less debt by shopping for holiday gifts all year long! This strategy will give you the ability to focus on the things that really make the holidays special — the people, the traditions, and the memories!
And that brings us to Christmas dinner! Discover how to create a budget for Christmas dinner too!
–By Jessica Martel