Christmas budget and cash envelopes

If you’ve ever skipped writing a budget for Christmas, then you likely know how stressful it can be to spend too much every December. In fact, most Americans spend over $1,000 every year on gifts, decorations, and holiday travel. This can be extremely overwhelming for families and can even lead to consumer debt.

By writing a specific budget just for Christmas, you’ll be less likely to overspend this holiday season. Writing a Christmas budget doesn’t have to be difficult. Below are 5 steps to write a Christmas budget you can stick to:

  1. Make a list
  2. Assign each gift an amount
  3. Account for holiday decorations and activities
  4. Calculate your total cost
  5. Determine if you need to cut back on spending

Let’s dive deeper into each step so that you don’t go broke this Christmas. You’ll also get access to Christmas money saving tips as well as information on what you need to do if you don’t have enough money saved before the holidays.

Christmas budget and cash envelopes

How To Budget For Christmas Gifts

It’s easy to wait until the last minute when it comes to Christmas shopping. However, that can add stress and frustration to what is supposed to be the most wonderful time of the year. Instead, when you plan in advance and create a Christmas budget, you’ll enjoy the holidays even more. 

Step 1: Make a list

Your first step is to list out all the people that you need to send gifts to.  Think of every immediate and extended family member. Consider your friends, neighbors, and coworkers. 

Do you usually attend a Secret Santa party? Add it to your list.

Here’s a quick tip: Open up the contacts on your phone. Scroll through each person and write down anyone that you’ll need to buy a gift for. Have your spouse or partner look over their contact list as well!

Once you have a complete list of everyone you’ll need to purchase a gift for, then you’re ready for step 2.

Christmas List Printable

Step 2: Assign each gift an amount

Once you have listed out all of the people you want to buy a gift for, decide how much money you want to spend on each person or each gift.  Chances are likely you will spend more money on those you are closer to.  

Write a reasonable amount next to each person’s name. Remember that you don’t have to purchase an expensive gift for everyone. You’ll want your spending to be realistic this holiday season. 

Step 3: Account for holiday decorations and activities

One of the easiest things to forget in your budget during the holidays are decorations and holiday-related activities. Be sure to add pictures with Santa, Christmas cards, and any Christmas decorations you plan to buy in your budget.

While these items don’t tend to be as expensive as gifts themselves, they are usually overlooked and can cause you to spend more than you had planned.

Christmas Cash Envelopes

Step 4: Calculate your total cost

Now that you have set a specific spending limit for each person and holiday activities, total up all the amounts. 

Then, add $100 to it. 

The truth is that there you’ll likely be faced with an unexpected expense or purchase at Christmas time. You might forget someone on your gift list, have an unexpected Christmas party that you have to bring a gift to, or you just might go over budget. 

Building in an extra $100 creates a buffer for these situations. Once you have your new total, divide that amount by the number of months remaining until December. This number is how much you need to save each month.

For example, if your total budgeted amount for Christmas is $750 and there are 4 months left until Christmas, divide $750 by 4 to get $187.50. Your goal is to save $187.50 each month so that you have enough money to cover all Christmas expenses.

Christmas budget and calculator

Step 5: Determine if you need to cut back on spending

If the total amount you’ll need for your Christmas budget is shocking, then you might want to cut back on your spending. Take a long look at your list. Ask yourself these questions to help you evaluate your Christmas budget:

  • Am I overspending on a certain person?
  • Can I make a gift for someone to save money?
  • Do I need to send Christmas cards this year?
  • Can I cut back $5-$10 on every gift to save money?
  • Is there anyone on my list that I shouldn’t buy a gift for?

The goal is to create a realistic Christmas budget so that you don’t have to dip into your emergency fund or go into debt to cover the holidays. You can find many ways to save money this Christmas by simply asking yourself the questions above.

What To Do If You Don’t Have Enough Money Saved

If you’ve written your Christmas budget just to find that you don’t actually have enough money saved to cover all the costs, then you’re in the right place. Below are 5 things you can do if you’re short on money at Christmastime.

Cut back on each gift.

An easy way to lighten your Christmas budget is to cut back on how much you’re spending on each gift. If you’re giving gifts to 10 people and you cut back by $10 each person, then you’re already saving $100! This can go a long way when it comes to your budget. 

Cutting back on each gift is a great first start when you don’t have enough money saved for Christmas.

Find a side hustle.

If you don’t want to cut back on Christmas gifts this year, then finding a side hustle will give you the perfect opportunity to earn extra money. You can always go with a traditional side hustle like delivering Amazon packages or working at a restaurant. 

Or, you can tap into your talents to create your own side hustle. For instance, if you’re great at painting or calligraphy, can you sell hand painted ornaments? I have personally purchased two hand drawn ornaments for my children for $12 each. The person that made them had an entire side hustle during the holidays and earned hundreds that year!

Think outside the box when it comes to a side hustle that will work well for you. Check out 20 high paying part-time jobs that you might enjoy.

high paying part time jobs

Gift the gift of time.

Another option for spending less this Christmas is to give the gift of time or service. Instead of buying your sibling a gift, offer to watch their children for 3 date nights. This allows you to spend quality time with your nieces and nephews as well as give your sibling and their partner an opportunity to spend time together. 

There are many ways you can give of your time or talents to family and friends. Not only will this lighten you Christmas spending, but it will also be a gift they will never forget.

Ask family to exchange gifts differently.

When you have a large family Christmas can get expensive fast! To help everyone spend less this holiday season, ask your family members if they are willing to exchange gifts differently this year.

This article has 8 options for exchanging gifts with large families. Not only will this save you a ton of money, but it might also make the gift giving experience even more fun!

Buy a combined gift.

Going in on a gift with another person can help lessen the amount you’ll spend this Christmas. If you have a sibling, ask them if they want to go in on a joint gift for your parents. You can each spend a little less than you normally do and your parents will still receive a great gift! Combining 2 budgets allows you to spend less overall.

Tips To Stay On Budget With Christmas Gifts

Going over-budget during the holidays is easy to do! The tips below will help you stay on budget and spend less this Christmas season.

Stick to the list you made.

Can we agree that it’s easy to go off the list when you’re shopping for the holidays? With so many amazing sales, there are times when you will be tempted to buy something “just because.” I know, because I’ve been there!

Instead, be ruthless when it comes to the list you made. Stick to the list you made and don’t buy a single item that wasn’t on the list. Remember, just because an item is on sale doesn’t mean you have to get it. There will be other sales. The goal is to come out of Christmas on budget!

Don’t buy something for yourself.

As you’re scanning sale ads or online sales, chances are you’ll find something that you want as well. Many people justify buying purchases for themselves during Black Friday and Cyber Monday. It’s easy to throw off your entire budget when you make these types of impulse purchases.

Completely skip buying something for yourself. Remember that come Christmas day, you’ll also be receiving gifts. If you love to buy for yourself this time of year, then either add that cost to the Christmas budget or your regular monthly budget

Use cash when you go to the store.

If you’re physically going into a store to shop, then consider using cash envelopes to help keep you on track. Cash envelopes are perfect for creating boundaries with yourself and your money.

Once you run out of money, you can’t keep spending. This allows you to stick to your budget and think through your purchases more clearly.

Christmas cash envelopes

Stay focused when shopping online.

Have you ever noticed that when you’re shopping online, websites tend to show you items that seem irresistible? Once you know it, you have 3 items in your cart that you didn’t plan to buy. 

By staying focused when you’re shopping online, you’ll not only finish your shopping easier, but you’ll be more likely to not overspend. Skip the browsing online and type in what you’re looking for instead. You won’t regret it in the end!

Don’t use a credit card.

If you struggle with impulse spending and going overboard when using a credit card, then put the credit card away for the holidays. Be honest with yourself when you’re shopping for the holidays. You don’t want to go into debt during this season. If you have a history of putting Christmas on credit and carrying a balance on your card come January, then skip the credit card completely this year.

Earn cash back from your purchases.

Earning cash back and free gift cards for your Christmas purchases has been easier than ever! You can use the free cash or gift cards that you earn to buy more Christmas gifts or even save up for next year’s Christmas budget!

Below are some cash back apps and websites that you need to try today:

  • Rakuten lets you earn free money when you shop through their website. You can even install a Chrome extension on your browser which makes shopping through Rakuten even easier. Download the app or sign up now and get $10 free when you spend $25.
  • Honey is a browser you can install that will automatically search for the best coupons when you’re shopping online. This not only saves you money but also time! No longer will you have to search for online promo codes or coupons. Sign up for Honey and start saving money!
  • Fetch Rewards is an app that allows you to earn points when you scan receipts. You’ll earn the most points when you scan from a grocery store and buy qualifying purchases. These points can be redeemed for gift cards such as Target, Starbucks, Walmart, and more! Download the app here and use the code KP5WK to get 2,000 points when you scan your very first receipt! 
  • Ibotta is another app where you scan your receipts to earn cashback for qualifying purchases at the grocery store. What’s amazing about this app is that you can have the cashback you earn automatically transferred to your Paypal or Venmo account after you reach $20. That’s FREE money! Sign up for Ibotta to start earning cashback.

The Bottom Line

The sooner you write your Christmas budget and save for the holidays, the more likely you’ll avoid any unwanted financial stress. Ultimately, writing a budget for Christmas allows you to avoid debt and be more intentional with your purchases.

To help get you started, grab your FREE Christmas budget page and cash envelopes below.