Below I am going to give you the tools, information, and helpful tips you need to have the best Christmas without going broke.

Christmas should be all about spending time with family and friends. But it can also be one of the most stressful times as well. You got to buy the best, most thoughtful gifts for everyone and their dog. You have to bake and host perfect parties all while trying to keep your regular life stuff afloat.

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It can all seem like too much. Then you add the expense of everything that comes with Christmas….๐Ÿ™

My Christmas wish for you is to have the most amazing Christmas within your means so you don’t go into debt or blow your hard-earned cash with little to show or lackluster memories. You can have the best Christmas while on a budget!

So how do you have the best Christmas on a budget…?

You plan well in advance and start early! ๐Ÿ˜€ That’s how.

Let’s start with creating your Christmas budget…๐ŸŽ…๐Ÿป

Have the Best Christmas on a Budget

How to set a Christmas budget so you don't go into debt

1. Christmas Gifts Budget.

First, sit down and write out all the people (and dogs) you want to buy for. Think back to the year before. Who did you buy for? Who do you want to buy for?

Here is a general list to get you going:

  • Spouse
  • Kids
  • Parents
  • In-laws
  • Nieces/Nephews
  • Sisters/Brothers
  • Kid’s best friends
  • Coworkers
  • Boss
  • Friends

In our family, we mostly only buy for the kids (our kids and nephews) with a few exceptions. My husband and I usually just buy things for each other that are useful or we would have bought anyways.

We also made a pact with our friends who have kids and said no more buying gifts for each others kids! They already have too much stuff. Instead, we might take them to a movie, jump park, etc.

Also, when we get together with our friends for Christmas, we have a recycled gift exchange where we find stuff around the house to give away. It is hilarious!  

For coworkers, I tend to buy something very small or even just a card.

Back to you...Give this list a lot of thought. It’s easy to forget about someone when you are planning so far in advance. 

What to do:

  1. Now that you have your list of people to buy for, write down your budget for each person. Be realistic. 
  2. Prioritize your list into musts and maybes. The maybes are those that might get cut or downgraded to a very small inexpensive gift or some homemade baking.
  3. Total this budget up.

Cost Savings Tip: 

  • Christmas shop ALL year.
    • Dollar stores are your friend for stocking stuffers and they have different merchandise throughout the year so pick up little things you know will be liked as you see them.
    • Check out stores as they switch seasons. They often put out-of-season items on sale cheap cheap cheap.
  • Track your Christmas spending as you go so you don’t forget what you bought and you don’t go over budget.
  • Continuously scour online for the best deals on websites like Amazon, Zulily, Old Navy, Beyond the Rack, etc. 
    • I bought my daughter some beautiful earrings from Zulily in July for a fraction of the price. 
  • Shop deal days like Black Friday, Amazon Prime Day, etc.
  • Always comparison shop. If you are at a store and you see something so-and-so will love, quickly whip out your phone and google the item. What does it go for on websites like Amazon? 
  • Use Ebates when making online purchases.
  • Use the browser extension Honey to make sure you are taking advantage of any discount codes meandering around online.
  • Buy discounted gift cards for those hard-to-buy people on your list. Check out Gift Card Granny and search for the perfect store! Heck, you could buy them for yourself and use them to buy your gifts. 
  • Make some of your gifts. Check this post called 44 Creative DIY Christmas Gifts in a Jar by Dodoburd for inspiration.

2. Buying for your Kids

Ok, this is a big concern for me.

In years past, we have bought so much stuff for our kids. I always felt like their Christmas would be crap if I didn’t. Well last year, we did the same thing and bought our kids way too much (not to mention all the stuff they get from everyone else).

After all the gifts were opened, my son (6 at the time) turned to me and said “That’s it? That’s all I get?” I was immediately angry thinking of all the money and time we spent on his gifts. How ungrateful of him.

But after thinking about it, I realized I have created this little monster. I am the one who bought him so much stuff. I created this expectation.

So, what am I going to do about it this year? I am going to try a few things:

What to do:

Strategy 1: Adopt the minimalist kid buying plan:

  • Something they want
  • Something they need
  • Something to wear
  • Something to read
  • Something to do
  • Something to make
  • Something for family

Strategy 2: Buy used toys and books from Facebook Marketplace, Kijiji, Craigslist, etc. 

  • I can get Diary of a Wimpy Kid books for about 15 – 25% of the retail price.
  • I can get a huge bag of My little Ponies with all the accessories for $50 instead of buying two ponies new for the same cost.

Who cares that they are used! The kids won’t know or care. So why should you?

This is a guaranteed way to have the best Christmas without going broke! Make sure to track the actual retail value so you don’t end up spending too much.

Strategy 3: Focus on creating low-cost family traditions as opposed to more gifts. More on that later.

3. Food Budget.

Along with gifts, this category is probably one of the worst for causing people to spend too much money at Christmas. Going broke to have the fanciest dinner is not worth it! However, if you plan in advance you can do reasonably well. Food is expensive! 

Here are some food budget areas:

  • Baking ingredients 
  • Meal ingredients for:
    • Christmas Eve dinner
    • Christmas Day dinner
  • Special snacks/food items (ie, chocolates, egg nog, etc)
  • Alcohol

What to do:

  1. Once you have your list like above, find the recipes you plan to make. Based on your chosen recipes, make a list and estimate the cost of each ingredient or search for the cost online to be accurate.
  2. Make a list of other food items you will buy (ie, chocolates, egg nog, etc)
  3. Total this all up.
  4. Add a little extra to your total because sometimes the cost of things goes up unexpectedly or our plans change a little. 
  5. Next step is to bring your list every time you go to the grocery store. Look for deals on the non-perishable items on your list.

4. Clothing Budget.

Are you going to any office Christmas parties or getting family photos done? Will you or anyone in your family need new clothes?

What to do:

  1. Before you add anything to this list, go through closets and see what you might wear without buying anything.
  2. If you don’t have a dress to wear for that office party, ask a friend to borrow a dress or swap! Maybe she is having the same conundrum.
  3. If you have to buy, check out your local online markets such as Facebook Marketplace or go to thrift shops. Often, thrift shops in affluent areas have brand new clothes for pennies.ย 
  4. Another option is to wear dress pants and a nice blouse which you likely already have in your closet.ย 
  5. If you still can’t find anything check out websites like Zulily, Dresslily, etc.
  6. For kid’s clothes, try to find something used at your local thrift shop or on an online buy and sell. If that doesn’t work, sign up for your favourite kid’s clothing store email lists to get their deals.
  7. Once you have your list, set a budget.

REMEMBER: Going broke for a pretty Christmas dress is not going to bring you or your family joy in the long term. Having the cutest, trendiest clothes for your kids on Christmas day or in those family photos is NOT important.

5. Events & Activities Budget.

Think about the activities you and your family and friends do each year or are already planning to do this year. Here are some basics to get you started:

  • Tickets
    • Christmas parties
    • Christmas plays
    • Gallas
    • Concerts
  • Meals out
    • Work lunches
    • Dinners with certain friends either at a restaurant or in-home. 
  • Taxi/Uber rides
    • Are you going to have a few drinks and need to get a ride home?

What to do:

  1. Create your list of events and activities you plan on doing over the holidays.
  2. Make a separate list for each activity with all the expenses you can think of for each.
  3. Total them up. This is your budget. 

6. Christmas Cards Budget.

  • Photographer
    • Or can you do it yourself with the timer on your camera or phone?
    • If you have a photographer friend, maybe you can trade something for their service (ie, babysitting, baking, etc). After all, you only need one good photo!
  • Cards
    • Look for awesome deals through Shutterfly, Canva, Vistaprint, etc. They go on sale all the time. 
  • Postage
  • Add it all up.

7. Miscellaneous Expenses Budget.

  • Donations
  • Decorations
  • Live tree
  • Wrapping paper
  • Gifts for party hosts

Add up all your categories above. Are you surprised by this number?

8. Make sure your Budget is Realistic.

Christmas budgeting - learn how

If you are a budgeter by nature or have been tracking your spending for a while, you will likely know right away if your Christmas budget you created based on the above steps is good or bad. If you tracked your Christmas spending last year then you will definitely know!

If you haven’t been tracking your spending, are in debt, or both, then you might not know if you can afford your Christmas budget.

So what do you do if you don’t really know if your budget is good? 

9. Get a Crystal Clear Picture of your Financial Situation

You got to start tracking your income and expenses.

How much do you have left each month after you pay all your expenses?

If you are in debt, you wouldn’t have anything left over at the end of the month. So what do you do to make sure you have the best Christmas without broke or going further into debt?

Basically, you need to prioritize your Christmas costs, my friend!

Christmas buying is a huge culprit in many people’s personal finances. Having a great Christmas without going broke is very doable but you have to know your overall financial situation to prioritize properly.

Getting out of debt (besides mortgage) should be a higher priority than having a free-for-all Christmas.

Go back to the budget you created based on the above steps and start cutting back.

Now that you have a more realistic budget, take that amount and divide it up to see how much you need to put away each month between now and Christmas.

So, if your Christmas budget is $600 and it is 3 months until December, you will need to put away $200 each month so you don’t go into further debt for Christmas.

You might be thinking you can’t even do $200/month. So what should you do?

10. Start Cutting Back on Expenses. โœ‚

Once you have gone through about 3 months of spending, you will very quickly see all the money you are wasting. A latte here, a couple of lunches there, etc. Stop this mindless spending now so you can have the best Christmas.

Here are some quick hits that are relatively easy to implement immediately:

  • Have a no-spend month. This is where you don’t buy ANYTHING that you and your family don’t need for survival. I mean not even a coffee on your way to work. 
  • Usually, the easiest way to save money is on food. So stop eating out – food is such a huge expense as it is. Eating out even for lunch is a huge waste of money. Pack leftovers. Make freezer lunches to grab on the go. Meal plan!
  • Cut or lower your cable package. Do you even watch it anyways?

Here are some related posts on cutting your expenses:

11. Look for Ways to Make Extra Money.

If you still need to make up the difference after cutting your expenses so you don’t go into debt for Christmas, you need to consider bringing in extra money so you can afford your magical Christmas. 

One of the easiest ways to make some quick cash is by selling the stuff around your house you no longer use. 

~Check out these posts on making more money:

12. Focus on Making Christmas Magical for your Kids.

As we all know, the holidays should not be focused on gifts.

However, there is still a social expectation that we are crappy parents unless we buy the best most expensive gifts. We also hear this from our kids too! Well, I do anyways. They want all the latest and greatest stuff because that what they are used to and that’s what their friends get!

Christmas budget

It’s going to take you and me to change that expectation and it starts with OUR children.

Related Post: Cheap & Easy Christmas Traditions Your Kids will Love.

It’s so possible to have the best Christmas without going broke by planning ahead, budgeting, and not going overboard. Focus on the experience, not the stuff.

Anyways, I have no doubt that my children will look back on their childhood Christmases and remember the experiences, not the gifts they received. 

Let’s get back to the magical part!

Remember how I mentioned that one great way to have the best Christmas without going broke was to focus on no-to-low cost Christmas Traditions. Well, I wrote a whole post on this very subject. So check it out! 

Final Word.

Can you see now that you can have the best Christmas without going broke? You might find that with a new focus on making memories and not debt, your Christmases will be so much more memorable.

Now, I want to hear from you. What are your top tips for having the best Christmas without going broke? Leave a comment and let me know.

I sincerely hope you found this post to be helpful and I deeply appreciate you reading it.

If you like this post, I would greatly appreciate it if you shared it!

Christmas on a budget