How to Budget for Christmas

Christmas comes at the same time every year.  So why do so many people go into debt or not create a budget for Christmas?  Last year was the first time I ever set a true budget for spending on Christmas items.  While we did go over that budget, we were lucky and still did not go into debt because of overtime that my husband worked in November.  However, I think we spent way too much money ($2000 when all was said and done!) and I DID keep track of everything we spent money on related to Christmas so that I would have a comparison for this year.  Some of you might think that $2000 is not a large amount at all while others might be in shock, but in the end everyone’s budget is going to look different – the important things are that you create a budget, you stick to that budget, and you do not go into debt over Christmas.If you really need help figuring out your budget for Christmas, then check out her awesome printable and spreadsheet! She really helped me to get organized this holiday season.

There are many ways to save or make money for Christmas – a quick search on Google or through Pinterest will bring up many results.  I have not quite figured out the best way to do this yet, but this year we saved a large chunk of the two extra paychecks that my husband made (we only budget for being paid twice a month, but since he gets paid every other week, we get two extra paychecks a year).  My focus is help you figure out how to plan your Christmas budget and keep track of it once you have arrived at your family’s magical number to be spent on Christmas this year – no matter what that number may be.

Decide Where Your Money Will Go

The first thing you should do once you have decided how much you will budget for Christmas is to list out all the people you have want to buy gifts for.  Remember, you don’t have to buy a gift for every last person you know – even if they buy you something!  I have created a printable to help get you started on your planning, my Christmas Budget Planner.  If you are not a paper person, you can skip right ahead to using my spreadsheet if you like, but I think it always helps to write things down first before going digital.  I have listed out a basic group of family, friends, and acquaintances that you might be buying a gift for.  You can add your own, cross out mine, or do whatever you want – I just tried to cover all bases to help jog your memory on who might be on your list.  Next to the person, you can write a dollar amount that you are allotting to them, a gift idea, or both.

I think most people remember that they have to buy gifts at Christmas, but where the budget usually gets ruined is in the “extras”.  If you celebrate Christmas, then chances are you will need a Christmas tree, lights, wrapping paper, etc.  I have started a basic list of Christmas decorations and other miscellaneous items that I have personally spent money on.  Finally, don’t forget all the food you might need to purchase.  Whether you are hosting Christmas dinner, a festive cocktail party, a cookie exchange, or just buying food and holiday treats for your family, chances are you will be purchasing items not normally included in your grocery budget.  Once you have finished brainstorming your initial list of items and people you will be spending money on this holiday season, you can either add up the total amount of money you have allocated for each item (if you have not already been subtracting from your grand total through the process) or you can move on to use my handy excel spreadsheet and let the computer do the work for you.

I am so tired of going into debt for Christmas and really wanted to learn how to budget for Christmas. This gives me great tools and ideas to create a budget and stick to it!

Track Your Christmas Budget

Writing down how much you are going to spend on gifts, decorations, and food is easy.  The hard part is sticking to those numbers and keeping track of what you spend when you spend it.  Just like tracking your spending in your everyday budget, the same needs to be done for your Christmas budget.  I have created an Excel spreadsheet that is already set up to help you do this, my Christmas Budget Tracker.  All you will have to do is transfer over what you recorded on the Christmas Budget Planner and let the magic of Excel run the numbers for you.  You will be able to see how much you have allocated out of your total budget (don’t forget to add this number in first under Total Budgeted in the Summary section) and how much you have left to work with – no math required on your part!

As you purchase gifts or other items on your list, make sure you add the amount spent in the Actually Spent column next to each item as you go.  You will see a total of all that you have spent in the Summary section as well.  No matter how little the purchase may be, don’t forget to include it.  For instance, today I was at Target and picked up some candy for stockings and while they were only a dollar a piece, I added them in under the respective person I bought them for.  You can easily add multiple items in the same row for one person or category (use the = and + within the cell such as =10+15), or create as many rows as you want if you like to see everything itemized out.  Please feel free to email me with questions if you are having trouble, but I promise it is easy!

budget for Christmas

Make Your Money Last

If you have done this exercise or maybe you have not even started because you feel like there is no way you will be able to afford what you need or want to spend, try out some of these money saving ideas.  You might have to really think and decide what is important to you and your family to celebrate Christmas, but that is the best part – YOU get to decide.

  • Take care of your immediate family first.  Whether you like to celebrate with gifts, experiences, charitable giving, or quality time, make sure your family spends Christmas the way they like to.
  • Just because someone gives you a gift, does not mean that you have to break your budget and go out and get them something.  This is why it is important to plan ahead and really think about who you would like to include in your holiday giving.
  • If you have a large extended family, consider drawing names for individuals or even families.  Set a limit on how much money should be spent.  Or better yet, plan to enjoy a meal out or a fun experience together instead.
  • Grandparents and many other older people do not look forward as much to receiving “things” as much as they just want to be remembered or included.  Bake their favorite cookies, spend a day with them around the holidays, or write them a nice card.
  • As a former teacher myself, I know that most teachers just want to know they are appreciated.  Sending them a heartfelt note thanking them for all they do, or even a fun piece of candy or $5 gift card is all it takes!
  • Buy a case of wine on clearance and bring a bottle to any parties you are invited to as a hostess gift (or keep as a last minute gift for someone you truly forgot about!).
  • Investing in quality decorations, ornaments, and lights over time is the way to go.  Build up your collection over time and eventually you will have a wonderful stockpile to choose from.  Try only adding one or two (or none, depending on your budget) new pieces each year.
  • Live trees can be expensive.  Unless this is truly a high priority for your family (like it is for mine), invest in a fake tree and then you will be able to cut that expense from your budget for years to come.
  • Don’t send out greeting cards.  Last year we spent $70 on Christmas cards and $70 on postage.  Yes, this could have been cheaper if I tried, but we have decided not to send cards this year.  It is not a high priority for our family.
  • Instead of donating money to a charity, donate your time.  Also, volunteer on a day after the holiday season.  Think about how the amount of volunteers probably drops off after the new year!
  • If you are hosting a party, don’t hesitate to ask people to contribute by bringing food or alcohol.

Now it is time to get to work!  Download my Christmas Budget Planner and Christmas Budget Tracker to get started.

What are your best money saving tips for the holiday season?

FREE 5-Step Budget Workbook!


If you are ready to take control of your finances, get started with my FREE 5-step budget workbook and the spreadsheet I use for my own budget!

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