How To Set Up A Simple Christmas Budget

The worry of overspending at Christmas can be overwhelming. Christmas expenses mount up and soon spiral out of control, putting huge amounts of strain on families during the run-up to the holiday season. Imagine how good it would feel to be credit card debt-free this Christmas! If you haven’t already got a Christmas budget, now is the time to grit your teeth, roll your sleeves up and start thinking about budgeting for Christmas! Don’t be scared. Having a debt-free Christmas is easier than you think. You can do this!

If you’re used to overspending every year and the thought of saving money this Christmas sounds alluring, then don’t worry, you’re by no means alone!

Average Christmas holiday spending in America

  •   In 2016 the average American spent $935.58 on Christmas presents. 
Christmas presents

The average amount spent during the Christmas season in the UK.

 Whilst in 2017 the average British person spent: 

  • £475 on gifts
  • £225 on food and drink
  • £31 on Christmas decorations
  • £89 on Christmas travel
  • £829, the total for just one day!
christmas cleaning, a small pile of Christmas presents

It’s crazy money, and as consumerism rises and the pressure for mums to spend extra money to keep up with the Joneses increases, we need a way to curb our excess and stop spending money on stuff we don’t need!

To instantly give your bank account the ultimate workout it deserves, read this simple post packed full of magical tips to help you spend less this Christmas!

How to create a realistic Christmas budget.

Time needed: 45 minutes

Setting up your Christmas budget

  1. Work out how many weeks until Christmas.

    This is the first and most important step when knowing how to budget for Xmas. Knowing how many weeks you have left allows you to spread the cost over the remaining paychecks and help you know when to spend money and save money.

  2. Write down your all your outgoings between now and Christmas.

    Write down every single thing you would normally pay for between now and Christmas. Use a Christmas budget spreadsheet or notebook and keep it for next year!
    Examples of typical outgoings would include:
    Kids activities and school trips 
    Lunch money
    Petrol and car care
    Newspapers and magazines 
    Take away coffee or drinks, including bottled water.
    Take out food, including lunches and dinners. 
    Gym classes
    Nails and beauty
    Pet food and pet care

  3. Work out how much money is left after all your outgoings are calculated.

    The amount of money left, is the amount of money you can spend on this year’s budget Christmas if you so desire. Remember you don’t have to spend it all! Check out ways these no-nonsense ways to save money this Christmas in this super savvy post!

  4. Write a list of everyone you are buying Christmas gifts for this year

    Great Aunty Dolly in the South of France. 
    Linda from down the road and her four children.

    Try downloading the Christmas list app for your phone to keep you organized and up to date.

  5. Next, see if there is anyone you can remove from the list.

    If you’re posting gifts and Christmas cards to people you have not seen for many years, now may be the time to supercharge your Christmas budget and cull the gift-giving!
    Chat with your friends and see if you can mutually agree to stop buying presents for each other’s kids, especially if you don’t see each other very often. You will probably find that they will be happy to remove you from their gift budget too!
    Separate the shopping list into kids and adults.
    If you have a family gathering with many adults, agree to have a secret Santa to help you stick to a reasonable Christmas budget.
    You can now cross Great Aunty dolly from the south of France and Linda down the road and her four children off your gift list.
    You’ll be surprised how much money you have been spending over the years on these unnecessary gifts, and it all mounts up to a pretty big saving!
    You’ll probably find that Linda down the road with her four kids is relieved that she doesn’t have to find the money from her Christmas budget to buy presents for your three kids too!

  6. Write down all your Christmas expenses on your Christmas budget worksheet such as:

    Christmas decorations

  7. Decide how much money you are going to allow for each category

    Then see if you can cut down any further. For instance, it is totally possible to reuse all of last year’s decorations and Christmas tree without having to buy anything new ever again. Make do and mend. Frugal living is fun!

  8. Write a list of all the food you can reasonably afford on your Christmas budget.

    Write a menu for Christmas day and work out how much money you will need for nibbles and trimmings.
    You can tighten your belt here. One of my best Christmas budgeting tips is to remember Christmas dinner is only a roast dinner with turkey instead of chicken!
    You don’t need to spend a huge amount on your food and drinks bill! If you need help with menu planning, read this post.

  9. Make sure you can afford to travel this Christmas

    If your budget doesn’t allow it, don’t be tempted to book tickets on credit cards. Explain to your friends and family that the Christmas fund won’t stretch to travel this year and that you don’t want to get into debt. Explain that you will be sure to visit after Christmas this year when you have more Christmas cash!
    Plan to spend Christmas at home if you need to!

  10. Follow the budget when buying Christmas gifts

    Knowing how to plan Christmas gifts is the key to not overspending.
    Decide on a Christmas gift budget for each person by splitting your list into people receiving a token gift and people you would like to treat.
    Think about giving a homemade gift to the people who are just receiving token gifts.
    Good examples of cheap Christmas gifts for couples would be a homemade gift of cookies or fudge.
    Giving homemade gifts will leave you with more money to spend on those special people in your life.
    Create a Christmas budget per child from whatever money is remaining and stick rigidly to that list.

  11. Try buying within the four present rule:

    Something they want, something they need, something to wear, something to read. This is a great way to stop yourself from overspending on inexpensive Christmas gifts and cheap stocking fillers just for the sake of it.
    If you’d love to try to stick to a $100 Christmas budget, read more about the four present rule in this simple post!

  12. Don’t be tempted by fancy packaging on cheap Xmas gifts!

    Take a stroll down to your local budget store, have a look at all the pre-packaged gifts. The majority of it is overpriced tat ready to go straight to landfill.
    Does your mum really want that overpriced Christmas set, or would she prefer something handmade by your kids?

  13. Listen to your kids!

    Don’t be tempted to overfill your basket with overpriced junk and cheap Christmas gifts, just so your family will have loads of presents to open. Chat with your children and listen to what they’d really like for Christmas.  Stick to buying only those things that they have asked for, rather than adding more junk just for the sake of it.

  14. Go for quality over quantity

    Wouldn’t your child prefer the watch they’ve been longing for rather than twenty poor quality presents they didn’t want or ask for?  Go for quality over quantity when Christmas shopping on a budget. Your kids will thank you for it later, and so will your credit card!

  15. Give a gift card

    Gift cards are a great way to give Christmas gifts on a budget.
    Who doesn’t love receiving a gift card to their favorite store? When you give a gift card, it is super simple to put a limit on your spending. When buying physical gifts, you often have to end up spending much more to make cheap Christmas presents look fancy!
    Although my kids say they need money for Christmas, I know they prefer to have a gift card for their favorite shop.

  16. Let go of the guilt!

    Letting go of the guilt is one of the best Christmas financial tips I’ve been given, and it has been a major part of my Christmas budgeting. Your kids have got enough. They are happy, just as we were as kids.
    Ditch the mom guilt and tighten your belt!
    Stick to the Christmas budget and stay debt-free this Christmas!

  17. Focus on creating traditions instead of presents

    I created some fabulous free elf on the shelf memories for my kids without adding more expense to the family tradition.
    Download your free elf on the shelf arrival letter here, and download my free elf on the shelf coloring pages here

  18. If you are in debt, get help.

    If you are in debt and feel like you need advice and help, read this post about getting help with debt.
    do not use credit cards or get into further debt to finance Christmas presents.

  19. Ditch the expensive gifts for your spouse!

    If you really want to cut down on your spending this year, have a chat with your spouse about exchanging gifts.
    Gone are the days when you need to spend heaps of money on each other to prove how much you love each other.
    You know you love each other without the gifts, agree to buy something you both need for the house, or agree to go out for a meal after Christmas together.
    Free up the cash by agreeing to quit the expensive gift buying for each other, focus your time and money on the other members of your family and stick to the Christmas budget!
    Create a romantic Christmas setting and have a meal at home while the kids are out, spend some time together, and don’t put extra strain on your Christmas budget planner when you don’t need to!

lady holding a Christmas donut bauble , how to have a debt free Christmas

Let’s see if we can cut the average Christmas budget right down!

Benefits of a Christmas budget

 lady holding a beautifully wrapped gift.

Having a Christmas budget set in stone helps you think about what you are spending and stops you from picking up those impulse purchases when you’re in the bargain shops. My Christmas budget reminded me that I didn’t need the Elf on the shelf webcam from Home Bargains for £7.99 yesterday. It’s just another bit of stuff that will end up in the landfill in a few years!

Take some time and write down some inexpensive Christmas on a budget ideas you can make for your family and friends.

One of my best Christmas budgeting tips is to remember Christmas dinner is just a roast dinner with turkey instead of chicken! You don’t need to spend a huge amount on your food and drinks bill!

 gift giving

Letting go of the guilt is a major part of Christmas budgeting. Your kids have got enough. Just as we were as kids, they are happy, ditch the mom guilt, and tighten your belt! Stick to the Christmas budget and stay debt-free this Christmas!

Frequently asked Q&A

What is your Christmas budget?

I come from a very frugal family where we only exchange one gift each, so it is easy not to overspend when I visit my parents. However, my spouse likes Christmas excess on every level, so there has to be a balance.
We do a secret Santa for all the adults and the budget for that is £50 per present, so we are literally only buying one present instead of eight. Adults have the choice of a surprise, or they can ask for something they need.
Last year I asked for a soup maker and this year I’d like a tripod. The secret Santa has really helped to reduce our Christmas spending!
Find out the super simple rules of the secret Santa here!

Why can’t I use my credit card to pay for Christmas?

From my experience, very few people have a Christmas budget and often pay for Christmas expenses by using credit cards.
Using credit or borrowing money to pay for Christmas is not a great way to start the New Year,  paying off a huge bill for one day of Christmas fun.
Putting Christmas expenses on a credit card will also cost you a lot more in the long run if you end up having to pay the interest on the loan.
The average APR on a credit card is approximately 18%. So, if your Christmas cost you £1500, you will be paying £270 in credit card fees unless you can afford to pay the bill straight away! you can read more about the cost of debt in this Dave Ramsey Christmas debt post.
If you really must put Christmas on the plastic, then go for a 0% card and pay it all off straight away.
It really isn’t worth it. To find out more about having a debt-free Christmas check out this post
Remember there’s no such thing as free money at Christmas!

What should my Christmas budget be?

It isn’t easy to put a price on your Christmas budget, but by following the steps above, you should be able to calculate how much money you have to spend and should be able to shop accordingly.
you could also try a Christmas budget calculator like this one

How will my kids cope with fewer toys this Christmas?

How was your Christmas as a child? How excited were you for Christmas morning seeing the presents under the tree?
When I was a child, there was an average of about 10 presents under the tree between 4 of us. We were lucky to get more than one present, and that was what it was like for most people before the crazy consumerism started to give us guilt trips and anxiety.
It was before the Christmas adverts and mass Christmas panic. Black Friday was non-existent!
We were still happy, well rounded, non-entitled kids. If we got a new bike for Christmas, it was the most exciting, amazing thing in the world. We didn’t need thousands of gifts. Christmas was special because we were all together as a family having fun.
We need to remember that we are doing our kids a favor by not going into debt over Christmas, and by spending responsibly, we are teaching our kids that Christmas is about giving and receiving.

Can you give me tips on how to save for Christmas gifts?

Knowing how to budget Christmas shopping is key. If you want to splash out on Christmas without getting into Christmas debt, start to save for Xmas from January, ready for next year.
Put some money to one side each week or month, set up a direct debit to go straight into a savings account, and watch your Christmas savings grow!
Remember to use a Christmas budget next year to help you stay out of debt!

What if I have barely any money left over after my outgoings how much should I spend on Christmas?

This is common for many people, and it can be a real temptation to put Christmas on credit, especially if you have children. If you possibly can, try to boost your income with a part-time job. Many supermarkets have part-time jobs going at this time of the year if you can get childcare.
If you have tiny children, do not stress buying lots of expensive presents as they are too young to remember Christmas or understand gift-giving.
You should explain to other family members that you have not given gifts this year as your priority is to stay out of debt.
With older children focus on trying to afford one present they have asked for, or promise to buy it for them in the January sales when you have more money. 
Try to focus on being together as a family and spending quality time together.

How can I get more money this Christmas?

Sell your unwanted stuff to get free money for Christmas!

My husband wants to know how to do Christmas cheap

Show your husband this post and try to create your budget together, so you both know how to budget for Christmas gifts. Then read this post for some money-saving tips at Christmas

What are some cheap Christmas gift ideas?

Plants, packets of seeds, homemade biscuits, homemade fudge, homemade Christmas cake, stationery, and photo album are great cheap gift ideas if you want to do Christmas on a budget.

What do you want for Christmas?

This year for Christmas I want a rest!

Self care at Christmas

If you’re struggling to get organized this Christmas, follow our free Christmas cleaning and organizing planner here. Just jump in where you can and get ahead of your Christmas planning!

Subscribe to our updates and receive the exclusive code to our FREE resources library packed full of free printables to keep you organized!

What are your best Christmas budget tips? Please leave us a note in the comments!

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