Create a Christmas budget to save money

How to create a good Christmas budget that keeps you out of debt?

Admit it or not, the Christmas season is fast approaching, and setting up a Christmas budget is key to managing your money. How to set up a good Christmas budget that keeps you out of debt? The answer to this question is exactly what many people are searching for.

Create a Christmas budget to enjoy a debt-free holiday
Create a Christmas budget to enjoy a debt-free holiday

Why should we set up a Christmas budget?

First of all, help us answer a question: How much did you spend on Christmas in 2019? If you calculated what you spent on all Christmas costs such as gifts, food, and other Christmas-related expenses, would you come in above or below the national average?

How much does average American spend at Christmas

Last year, according to the 2019 Christmas Spending Statistics from personal finance analyst The Ascent, the average American spent $882.45 on Christmas gifts, decorations, food, and other miscellaneous holiday-related expenses. Meanwhile, this same study indicated that 21.5 percent of respondents went into debt to pay for these expenses.]Creating a Christmas budget would be an effective way that helps us manage our money. It can also help you avoid stretching yourself too thin financially or even landing in debt afterward.
There are so many consumers experiencing financial hardship as a result of the COVID-19 pandemic. For this matter, it’s more important than ever to map out a Christmas budget and find more affordable ways to make this season special.

How to set up a good Christmas budget that keeps you out of debt?

We are suggesting here some simple Christmas budget tips you can follow to avoid taking on debt later this holiday season.

Make your list

The first thing to begin in creating a Christmas budget is your gift-giving list. If you are tight on money, you will likely have to make some cuts for Christmas gifts. Keep in mind! As this is your own list, only include the most important people on your gift-giving list.

Once you determine whom you plan to shop for, jot down some gift ideas for each individual, along with a specific budget per one. This quickly tells you whether you need to look for more affordable ideas or not. Writing out a budget for this part is helpful.

Add the most important people on your gift-giving list
Add the most important people on your gift-giving list

Now, it’s time to go ahead and make your list. Just think about anyone you’d love to buy a gift for. Below is what we suggest you should put on your list:

  • Family: grandparents, parents, aunts, uncles, children, spouse, siblings, cousins and even the cat. In this category, list anyone you WANT to give a gift to.
  • Co-workers: bosses, partners, support staff
  • Friends – neighbors, church friends, fellow volunteers

Those who provide services – hairdresser, nail tech, mail carrier, yard worker, pool cleaners, teachers.

Anyone else? Put them on your list! Also, don’t forget to add some other incidentals that you might need to pay for such as parties, wrapping paper, and bows, food, Christmas room decorations, or many Christmas outdoor activities.

Once you’ve determined whom you plan to shop for, jot down a few gift ideas for each of them, along with a budget per person. This can quickly tell you whether you need to find more affordable items or not. If you need help writing out a budget, let this free budget worksheet from Andrea Woroch support you.

This is just our suggestion. Make sure to ask your families, friends, for their advice so that you can create your complete list of Christmas expenses.

Determine how much you can afford

In your Christmas budget, never forget to determine how much you can afford for Christmas costs. Take a look at your financial status and decide how much money you can realistically set aside for Christmas without relying on credit cards.

You might have several income sources to access for holiday spending cash. These might include:

  • Your incoming paychecks
  • Your savings account
  • Your end-of-year bonus at work
  • The cash gifts you will be receiving for the holidays

Christmas budget calculation is super vital. To set up your holiday budget, it’s important to determine how much money you have available or expect to have soon. If you have established a Christmas fund already, then you may know what’s available to you for Christmas. If not, get out the calendar and start calculating, based on your monthly spending plan what’s open for Christmas shopping.

Determine how much you can afford is extremely important
Determine how much you can afford is extremely important

We suggest that you should not do this step after you’ve made your list of gifts to buy. You might end up in disappointment that you don’t have enough. This might lead you to use your credit cards. Instead, do this step first!

Make some cuts in your list

Once you know how much money you have to work with, figure out which Christmas categories are most important to you. These may include gifts, travel, hosting, home decor, and holiday cards.

We suppose that at first, you will find it difficult to make some cuts. You don’t want to cut anyone off your Christmas list. However, finally, you will realize that even though it’s nice to give to your kid’s teachers, the mailmen, and the paperboy, it’s not necessary.

So, what’s the point? If your budget can’t support buying for all the “extra” people, make your own decision to trim your list and cut them out.

Christmas outdoor activities can help you reduce expenses for this holiday
Christmas outdoor activities can help you reduce expenses for this holiday

We also recommend that you should also reduce some expenses in the Christmas budget during Christmas. For example, there are a lot of outdoor activities for Christmas and they may cost too much. And instead of engaging in these, look for some free Christmas outdoor activities that still make your holiday magical.

Stick to the Christmas budget

Building a Christmas budget is good as that’s when you begin to think seriously about how you will pay for Christmas costs. However, follow it or not? It is also a very important factor that determines the success of your plan. Among those who bought Christmas gifts in 2019, 56.3% set a Christmas budget. But only 64% followed it.

Sticking to a Christmas budget will maximize your savings

We know it might be quite hard to stick to this pledge, but believe us, in the end when you don’t have to worry about some additional credit debt, you will be happy. You know that you did what you need to have a debt-free Christmas. That’s why, know what you’re working with and try to commit to sticking to this plan.


We hope that with our suggestions, you can create an effective Christmas budget that keeps you out of debt. If you need any further information, feel free to comment right below this blog and we are always happy to support you. Thanks so much for your attention and wish you to create a successful Christmas budget planner!

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