Christmas On A Budget: How To Save For Christmas So You Don’t Go Broke

How to have Christmas on a budget
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The Christmas holiday season is one of my favorite times of the year. It’s such a fun and festive time. You get to totally deck out your home with Christmas decor and spend quality time with friends and family.

But then, there’s a whole other side of it that’s not so happy and bright.

You know what I’m talking about.

All of those presents, eating out, and drinks with friends don’t come cheap. The months leading up to the end of the year can get a little overwhelming.

Okay, wait, scratch that…

It can get really overwhelming especially if you’re not financially ready and strategic with your spending.

Here are some easy tips and tricks you can follow to save for Christmas so you can have an awesome Christmas on a budget and not feel broke after the holidays.

Save For Christmas By Making A Budget

The very first thing you need to do is set up a plan.

Planning should be the absolute number one thing in your game plan to survive the holidays.

You want to be smart with your money so you can go a lot further with the same amount of available funds.

“How should I plan?” you might ask.

It’s really quite simple.

At the beginning of the year, you need to plan in advance by estimating how much you need to save per month for the holidays on top of your regular budget.

Then, figure out approximately how many people you need to buy presents for, how many people you’ll probably be seeing and meeting up with, how you want to decorate your house, and then set a budget.

So for example, you know you need to buy presents for 10 people, you planned 6 celebrations dinners at restaurants with your friends and family, you’ll be going out 5 times to the bar, and you already have an idea of the type of Christmas home decor you want to add to your place.

how to save money this upcoming holiday season

Set up a Budget

Now that you know approximately what you need to spend money on, you’ll need to figure out how much you’re willing to spend in total for the holidays and then allocate a budget for each of those separate categories.

In addition, you’ll want to add some extra wiggle room just in case unexpected events come up.

Sounds pretty straightforward, right?

Now that your budget is set up, just follow your budget and be sure not to overspend in any of the categories.

If you find that you’re overspending on these categories because you underestimated how much money you actually need to spend or you’re invited to more spontaneous events and parties, you’ll need to sit back and re-evaluate.

If that means that you need to skip out on drinks with your girlfriends or forego your daily morning coffees at Starbucks for a week to have a celebratory dinner with family, do it.

Sometimes you just have to make sacrifices in order to stay on track with your finances and save for Christmas.

Start A Sinking Fund

Setting up your budget and allocating your budget to each category is easy but the hard part is having the determination to actually stick to it.

To help yourself out, you can set up a sinking fund that is specifically for the holiday season.

A sinking fund is money that you can set aside every so often to save money for a specific purpose. In this case, you’d set aside money that is specifically for the holidays.

Once you have a sum of money in this sinking fund which would be equal to how much you budgeted for the holidays, you can use only that money to pay for holiday occasions. 

You can always add more to the sinking fund as you deplete it but it’s specifically for the sole purpose of the holidays and nothing else.

You can check out my sinking funds tracker in my printable finance planner.

printable finance planner

How To Have A Great Christmas On A Budget

Next, let’s talk a little bit about buying gifts since a great percentage of your money during the holidays will be spent purchasing gifts.

With good planning and time management, you’ll help yourself maximize your savings and stay within budget.

dessert cake with pine leaves

1. Start Shopping For Gifts Earlier

The first thing you should consider doing is shopping for gifts earlier.

By shopping earlier, you get to skip the crazy rush in December (especially the last 2 weeks before Christmas) when everyone is at the mall fighting over parking spots and waiting in crazy long check out lines.

Use time to your advantage and purchase gifts throughout the year.

This way, you can avoid the holiday rush, get the best prices, and not get locked into purchasing something you don’t even think is the perfect gift just because you need to gift it to someone the very next day.

Here are 3 great times during the year you can save money.

Take Advantage Of Mega Sale Dates

Want to take advantage of great sale prices?

A way to score some amazing deals and ultimately save hundreds of dollars is to purchase your gifts during Black Friday, Cyber Monday, during Boxing Week, and Amazon Prime Day.

Those specific sale weeks are when stores mark down a lot of their items so take advantage of them when you’re planning out when to purchase gifts.

cup of coffee with pinecones

Buy Your Gifts In A Bundle

Another way to get a great deal is to take note of when there are bundle sales in certain stores.

Have you ever seen a sign pop up that says something like, “Buy $200 or more and get 30% off”?

Well, if you know in advance what you need to buy and you’re able to purchase appropriate gifts for multiple people at one store, you can get some pretty sweet discounts.

Seasonal Clearance Events

A third way to get great discounts is to purchase your items during seasonal clearance events.

For example, if you know that you want to purchase a beautiful coat for your mom, the best time to purchase something like that would be during sale events that happens when stores want to clear out their winter inventory and bring out their spring collection.

2. Purchase Your Gifts Online

christmas gift boxes

One of the easiest ways to save money when you’re buying presents is to purchase your gifts online.

My favorite way to save money that I always talk about on my blog is by getting cashback on every online purchase with Rakuten (formerly known as Ebates) on top of any coupons or discounts you have already applied to your checkout cart.

If you’re not using Rakuten right now, you are basically throwing money away every time you shop.

There are so many stores that are partnered with Rakuten so there is a very high likelihood that the store you want to purchase your gifts from will give you cashback.

Getting cashback while getting everything shipped right to your door? A total score!

Right now, you can get $30 cashback just for signing up with Rakuten and spending $30.

3. Set A Gift Price Limit

The holidays should be all about spending quality time with friends, family, and loved ones.

However, a lot of times, we end up putting our focus on material things like presents instead.

So if you’re having a miserable time this holiday because you’re not financially capable of spending hundreds of dollars on gifts, it’s okay.

Try to talk to them and let them know that you don’t have a lot of money to spend on gifts this year and that you want to cap off presents at a certain amount of dollar amount so that the gift exchange is even.

tips to save money at christmas time

4. Make DIY Presents

Buying gifts is great and all, but sometimes making your own DIY presents is just as awesome. If you’re tight on funds, why not think of a few DIY gift ideas that you can make yourself?

Putting the time and effort into something small and sentimental that’s made with love can be even more special than buying a really expensive gift.

Besides, it’s cost friendly and who doesn’t like saving money, right?

Definitely check out Pinterest for awesome DIY present ideas.

5. Gatherings With Friends & Family

After gift shopping, a large chunk of change will probably be spent on holiday celebrations and gatherings with friends and family.

Constantly going out to celebrate is not cheap so here are two things you can do so you can still enjoy Christmas without going broke.

meal during holiday celebrations

Choose Less Pricey Spots

Celebrating the holidays doesn’t have to be super fancy or bougie.

You can always choose less expensive spots to grab some food and drinks if you’re on a tight budget. Sometimes, even just having a coffee date is fine.

What’s most important is spending great, quality time with family and friends, wherever that may be.

Host A Potluck

Another great option you can consider doing is hosting a potluck party.

Instead of going out and spending money, host a party at home and ask your guests to each bring one dish with them.

It’s a great way to celebrate with your guests at home without the financial strain.

Check out my post on other fun Christmas activities you can do with family and friends without having to spend a lot of money.

6. Save On Holiday Home Decor

christmas decor snowflakes window

Lastly, if you’re decorating your home for the holidays, decorations don’t have to be expensive and they can still look really good.

Here are 3 ways to spend less on your Christmas home decor.

Buy Decorations From The Dollar Store

The dollar store has such great finds sometimes that all you really need is to go there to get awesome home decor for the holidays.

Unfortunately, dollar stores have a bad reputation because let’s be real – a lot of their stuff looks cheap and not so flattering.

The key to finding awesome holiday home decor pieces at the dollar store is to search for things that look more expensive than they are and pairing them with the right pieces at home.

Scour Your local Thrift Stores

If you think that thrift stores are dirty or not worth shopping at, think again.

Sometimes that one home decor piece you’ve been looking for the longest time can pop up there randomly and they’re usually one of a kind and priced very reasonably.

If you’re okay with buying a pre-loved, second-hand piece, thrift stores are always great places to shop at.

reindeer christmas tree ornament

Make Your Own DIY Decorations

Last but not least, you can always make your own DIY home decorations. Some places to check out fun and detailed tutorials are Pinterest and Youtube.

If you’re not into any of those 3 suggestions above, you can also check out my list of great Christmas home decor ideas that I’ve compiled.

Also, don’t forget to check out my holiday gift guides if you’re looking for some great gifts and you’re not sure what to get.

how to get through the holidays without going broke

How are some ways you’ll be saving money this upcoming holiday season so you can have Christmas on a budget? Feel free to share in the comments!

One Comment

  1. Starting early and having a set budget are life savers for me Although I hit a snag this year – I broke my glasses and need to use the money I’d set aside for a new pair, argh. I like the idea of looking in thrift stores for gifts or decorations, I’ll have to check out my local stores.

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