Christmas is a time to be generous and merry.
But many people think if they do Christmas on a budget, they won’t be able to enjoy their holiday.
Overspending can lead to regret once the Christmas trees come down and the credit card bills arrive.
The average American spends more on Christmas than any other holiday. The American economy is currently strong, and holiday spending exceeded expectations in the year 2018.
EMarketer reported that holiday spending hit a record $998 billion during the last two months of 2018. This was up 5.4% from the previous year and topped $1 trillion in 2019.[1]
When it seems like everyone else is shopping to excess and so many people expect a gift, you may be tempted to succumb to societal pressure. However, you can plan Christmas on a budget and still have an amazing holiday season at the same time; here’s how.
How to Do Christmas on A Budget This Year
Before you even begin planning your holiday, make a budget so you know how much you’ll be spending.
Expense categories to consider when creating a Christmas budget:
- Christmas cards and stamps
- Grocery bills for Christmas dinner or side dishes for a potluck
- Christmas cookie and gingerbread house supplies
- Elf on the Shelf
- Indoor and outdoor decorations
- Extra energy costs for lighting your Christmas tree or outside lights
- Packing and shipping Christmas gifts to out of state friends and family
- Wrapping paper, tape, and other supplies
- Housekeeping/babysitting for hosting or attending Christmas parties
- Christmas party expenses
- Donations for charity
- Extra tips for your favorite waitress or hairdresser
- Hostess gifts for attending a holiday party
- Holiday family pictures
- Clothes/holiday outfits for photos or parties
Not to mention Christmas gifts on a budget for your:
- Spouse
- Kids
- Extended family members
- In-laws
- Nieces, nephews, goddaughters, and godsons
- Teachers
- Neighbors
- Bosses, coworkers, secretaries, etc.
- Clients, employees, and people who refer business to you
When you’re budgeting for Christmas, the costs can add up quickly. Not all of these expenses will apply to you, but it gives a few examples of costs you might not remember.
As you consider the expenses you’re responsible for this Christmas, take a look at the next step.
Related: 5 Financial Mistakes to Avoid This Holiday Season
Create a Frugal Christmas Budget
Having a list of Christmas expenses is only one part of the equation. Now, assign a dollar amount to each expense.
Your completed frugal Christmas budget will show you an overall picture of your projected costs for this holiday season.
Keep in mind that it might take a little bit of time to complete this step. For example, you might look up the cost of a professional photographer, but then realize you have the perfect selfie to put on your Christmas card instead.
Or, you might think you want to buy new Christmas decorations for your front lawn, but change your mind once you see the cost.
Spend some time doing a little research about the items on your list and try to come up with a total projected expense for the season. If you’re not comfortable with this total number, move on to the next step.
5 Ways to Lower Costs on Your Christmas Budget
You might be looking at your Christmas budget with fresh eyes and seeing a number you simply can’t afford.
Christmas might seem expensive, but it doesn’t have to be. Furthermore, you don’t have to go into credit card debt to make it a memorable and fun holiday season.
Here are some ideas to help you have an enjoyable Christmas on a budget.
1. Play a gift game. Many families now play games like a white elephant gift exchange or hot gift potato, which means they only have to buy one gift for the adults in their family. Suggesting this can save hundreds of dollars every Christmas. Plus, it’s a fun way to spend time as a family.
2. Stick to the four gift rule for your kids. Kids have so many toys these days. They can easily become overwhelmed, especially when the time comes to clean the playroom to make room for new toys. The four gift rule says that you can buy your kids something they want, something they need, something to wear, and something to read. These four presents should be more than enough for them to enjoy their holiday season.
3. Consider thoughtful Christmas gifts on a budget. Thoughtful Christmas gifts on a budget are great for teachers, co-workers, and neighbors. If you’re a crafty person, take a shot at some homemade gifts. A nice letter and a $5 Starbucks gift card can also go a long way. Teachers love gifts that are from the heart – a thank you note from your child would go much further than another coffee mug or candle.
4. Have a potluck. Even if you love hosting Christmas dinner, you don’t have to pay for the entire meal. Ask your guests to bring a dish.
5. Use coupons and shop at discount stores. T.J. Maxx and Marshalls are ideal stores for you to shop for gifts. They have amazing name brands at affordable prices. You can also use coupons when shopping online. Enable the Rakuten browser extension on your computer to automatically apply coupons and give you cash back on dozens of websites.
Related: How to Pay Off Holiday Debt (and Avoid It Next Year)
5 Ways to Earn More Money for Christmas
Of course, you can only cut your budget so much. If you’ve done everything you can to lower the cost of your Christmas expenses but you’re still coming up short, it’s time to hustle. Here are a few ways to earn more money for Christmas.
1. Deliver food. Join a service like Uber Eats to get paid to make deliveries on your own schedule. People don’t like going shopping when it’s cold and snowy outside, so now is a great time to start this side job.
2. Drive for Lyft. The great thing about driving for a ride share company is you can work as much or as little as you’d like. Lyft is currently offering new drivers a $1000 sign-up bonus when you complete your first 125 rides in 30 days.
3. Sell last year’s gently used gifts. Getting rid of some of your old gifts can help pay for this year’s presents. If you have an old cell phone lying around, try selling it on Decluttr which means you can get paid same-day via PayPal or with a check sent by mail.
4. Shovel snow. If you live in a cold climate, there are lots of people who will pay you to shovel their driveway when it snows. Start with your neighbors and friends first.
5. Work retail. Many stores hire extra employees during the holiday season. It’s a short period of time, but you can earn extra money and score discounts at your favorite stores.
Here is a list of more legitimate ways to earn cash quickly if you need more inspiration.
3 Ways to Land Gift Cards for Free This Christmas
Along with earning more money, you can also find ways to earn gift cards for free. Use the gift cards to buy your Christmas presents or give them away as gifts.
1. Collect Swagbucks. New members get a $10 sign-up bonus. When you build up your supply of Swagbucks by taking surveys, watching videos, playing games, and more, you can redeem them for gift cards to your favorite retailers.
2. Take online surveys with Survey Junkie. When you cash out the money you’ve earned from completing surveys, you can get paid in a variety of gift cards.
3. Sign up for InboxDollars. Earn a $5 bonus for signing up, which you can get in the form of a gift card to one of dozens of major retailers. Every time you shop online, take a look at current deals and earn cash back for purchasing items on your list.
Remember, Fun is Free
Even though Christmas can get expensive and you might feel pressure to buy many people gifts, remember that fun is free.
You don’t have to spend money that you don’t have this holiday season. Christmas is about spending time with family and friends. There are so many frugal and free activities you can do that will bring you closer together.
You can volunteer at a soup kitchen and help the needy. Spend an afternoon baking bread and cookies with your children. Take a drive and look at Christmas lights. Surprise your grandmother and her friends at the nursing home. Create a silly Christmas dance choreography and teach it to your nieces and nephews.
There really are so many ways to have a memorable Christmas on a budget.
Plus, the good news is that once Christmas is over, you can start setting aside money every month for the holiday throughout the year. That way, next year for Christmas, you won’t have to stress about money at all because the money will already be there.
