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Celebrate Christmas on a Budget? Yes, You Can!

There’s nothing like the holidays. We gather with far-flung family and friends, sample indulgent treats and sing seasonal songs. And then there are the presents. It’s certainly fun getting a well-chosen gift, but even better — watching a loved-one’s face as they open your gift to them.

However, things that we enjoy can also lead to excess. And just like we need to avoid overeating during the holidays, we also must watch our budgets when it comes to gift giving. According to the, the average American took on an extra $1,325 in debt last year at Christmas. And if your finances are already tight, it can take well into the New Year to pay off that debt.

Spending Christmas on a budget might not sound fun, but a few key points can help keep your holiday spending in check and help you better enjoy the things that matter most: spending time with our family as we remember the ultimate gift of a baby Boy born in a lowly stable.


It’s far too easy to get carried away when buying gifts. Stores lure us in with tempting sales, and with a few taps on our phone, we can have almost anything delivered to our doorstop. However, it’s a smart idea to have a plan before you start spending.

Start by writing down the people on your gift list. As cold as it may sound, put them in priority order. Children and significant others go at the top of the list, friends and close coworkers in the middle, distant relatives and less known neighbors at the bottom. If you have children, you will need to make a list with/for them as well.

Next, consider your bank account. Ideally, you start setting aside money early in the year and have a fund ready to go for Christmas (and birthdays and the like). But if not, don’t despair and (this is important) don’t go for your Visa. Instead, look at how much money you bring in on a monthly basis, subtract your monthly necessities and the result is your maximum budget for Christmas. The earlier you start this process, the more money you will have in play. So start today, then divvy up the money to those on your list.

Set your budget, check your figures, and then stick to it. Keep the list handy on your phone or print out a hard copy. As you buy gifts, make sure the total tracks and note what you’ve spent on your list. This will also help you remember what you bought so you don’t end up with extra gifts for individuals.

As you set your budget, consider ways you can give a loving and appreciated gift that is still low cost. Stocking stuffers can be purchased at the Dollar Store, children can make coupon books for grandparents (free hugs, anyone?) and — if you are crafty and have them time — crafts and baked treats are always a good idea. You can also give the gift of experiences: make a gift certificate to take your significant other on a date including a homemade picnic, walk on a favorite trail and marshmallows over the fireplace.

It really is the thought that counts!

For a more detailed approach on setting up a christmas budget, check out Dave Ramsey’s Zero-Based Christmas approach. He has some sound ideas for budgeting at Christmas and year round!

Hint: if your budget is tight, you and the adults in your life (significant other, siblings, adult friends) can make a no-gift rule. Agree to gather for a favorite meal and simply enjoy time together. You can also consider a trading-name gift exchange for cousins or groups of neighborhood friends. Each child buys one gift for a set amount and fun is had by all.


It’s a simple idea but takes some discipline to stick to it. For each child, you buy three and only three gifts:

  1. Something they want (i.e., a toy or game)

  2. Something they need (a coat or shoes)

  3. Something to read (books, magazine subscription, etc).

You can tailor the list to each child’s interest, just make sure you stick to your budget as you select items for each category.

Rachel Bowie, on, notes the idea originated from the wise men who brought Baby Jesus three gifts. She says that today, “modern moms are using it as a way to save money, reduce holiday stress and encourage their kids to be more thoughtful with their Christmas gift asks.”

Hint: if your budget still has some wiggle room here, consider giving your family a group gift of an experience. Purchase tickets to a favorite indoor water park, announce a plan to go to dinner and a movie together, or consider trying something new: a painting class, an escape room, etc. You can even offer a low-cost experience: grab snacks at the grocery store and take a “road rally” scavenger hunt.


This is a great idea for the many people on your list that deserve some special recognition at Christmas time. Think classroom teachers, bus drivers, mail delivery persons, hair stylists, etc. Skip the coffee mugs and Christmas tchotchkes and make some homemade treats instead. Pull out your Aunt Doris’ sugar cookie recipe, make a mini loaf of sweet bread or try this simple treat idea: melt chocolate almond bark, stir in salted peanuts and drop by the teaspoon onto waxed paper. These salty-sweet treats are a hit!

Package your treats by the 3s, 6s or 12s in a festive cellophane bag (hint, you can buy these by the dozen for just a buck at dollar stores) and finish with inexpensive curly ribbon. Of course, taking the time to write a personal note of thanks will put this gift to the next level. If your budget can afford it (see point one above) you can always tuck in a gift card to a coffee shop, gas station or office supply store.

Note: postal carriers cannot accept cash or gift cards per the United States Postal System site. Give them some extra treats instead.

At Life’s Choices, we offer practical help year round on setting budgets, getting out of debt and other finance skills. Contact us to see if our class selection is right for you. Our classes are offered at a budget-friendly cost of $0 and can be taken in person or virtually via Zoom. Schedule your class today:


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