A holiday budget is not usually the first thing that comes to mind when we think about Christmas.  But money, in some form, is something that I guarantee is on everyone’s mind during the holidays. 

Whether it’s in the form of saving, spending, or budgeting for the holidays, money is in some way, shape, or form part of the holiday season.  

If you are a more money conscious person, holiday spending can be a cause of stress.  But it doesn’t have to be.  There are numerous strategies, tips, and tricks to allow you to stick to your holiday budget while still ensuring that you have an enjoyable holiday season.  

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I Want To Have A Frugal Christmas That Is Still Fun – Where Do I Start?

Having a frugal Christmas and sticking to your holiday budget doesn’t mean that you can’t have a good time.  Spending less money at this time of year doesn’t make your Christmas any less special or meaningful.

There are two key strategies to keep in mind: 

1.  Get Creative

2.  Make A Plan

Get Creative To Stay Within Budget

Being creative involves thinking outside of the box.  Everyone loves holiday traditions but I’m here to tell you that it’s OK to do something different.  Just because your family has celebrated the holidays the same way for the past 20 years doesn’t mean that you can’t try something new.  

Don’t be afraid of finding new Christmas traditions to start. 

Make A Plan To Keep Your Finances In Check

Planning is everything.  Without a plan you are more apt to overspend, make impulse purchases, and overall make bad financial decisions.  

I like to keep a running list all year long of Christmas gifts that I want to buy people.  This allows me to know ahead of time exactly what I am going to buy instead of just buying a gift for someone because I “need” to buy a gift for someone.   Knowing what I am buying also gives me the opportunity to look for deals throughout the year, saving me money.

Besides a gift list, you should also make a holiday spending plan.  

Whether that includes a total budget or budgeting within categories (decorations, gifts, food, entertainment, etc).  You can get as detailed as you want.  The important thing is to make a budgeting plan and stick to it.  

How Much Do I Need To Budget For The Holidays? 

According to the National Retail Federation, Americans spent $789.4 billion in 2021 during the holiday season.  Yes, you read that right.   Even despite the challenges of 2020, consumers came out in droves.  

To look at it on a smaller scale, Americans, on average, spend just under $1000 during the Christmas season.  Expenses include, gifts, food, decorations, etc.  

However much you decide to spend, it would be wise to start saving early to avoid going into debt, which is a common problem this time of year. 

What Can You Do To Get Yourself Financially Ready for The Christmas Season? 

1. Save More Money:

Start a Christmas Savings Challenge.  A money challenge will keep you on track to save more, hold yourself accountable, and may even be a fun “game” to play to see how much you can save.  

2. Earn More Money:

There are numerous ways to make more money for all of those holiday gifts that you will want to buy.  If you plan ahead and make a little extra money, you will not be as stressed about all of that holiday spending.

Check out this article for 27 brilliant ways to make money for Christmas.  

Now that you have a plan and a budget, what actions can you take to have a fun frugal Christmas without the money stress?

Here are 21 Ways To Have The Best Christmas While Sticking To Your Holiday Budget

**Don’t skip over #12 and #18 is one of my personal favorites!**

Holiday Gift Buying Tips:

Gift giving can be tricky.  You want to buy someone something that they will love but if you are on a budget, you don’t want to “waste money.”  I say “waste money” because most of us don’t mind spending a little but no one wants to give that gift that sits in a closet or gets returned or regifted.  

So how can you avoid this?

1. Buy quality items:

Have multiple kids or buy for families that do?  Make sure you purchase gifts or toys that will last through multiple kids.  Spending money on better quality items that will last longer will always save you money in the long run.  In addition to making sure that you buy quality things look for more timeless items.  Games that will last, clothes that are not just trendy, books that can be enjoyed by multiple kids, etc.  

2. Buy family gifts instead of individual gifts:

Buying for each person individually can add up.  Instead, try buying a family gift that everyone can enjoy.  

Some family gift ideas: 

• A fun gift basket
• Board games or puzzles for a family night
• Fun custom wall art
• A streaming subscription and popcorn/movie snacks

3.  Buy experience presents:

Experience gifts are rarely a type of gift that gets forgotten about.  They are especially great for the family who has everything or for the family who request that no toys be bought for their kids.  

Our kids truly do have enough.  We don’t need anymore “stuff” and much prefer an experience gift over more things.  

Some experience presents:

• A National Park Pass
• A pass to the local zoo, museum, or aquarium
• Pay for an online (or in person) class that someone has wanted to take
• An Audible subscription
• Tickets to a play or show

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4. Have a white elephant party or do secret santa with relatives, friends, or co-workers.  

This type of gift giving allows you to only have to buy one present, saving you time and money.  

White elephant parties are really fun and you sometimes end up with a very unique gift.  It is often referred to as a Yankee Swap. 

White elephant party rules: 

1. Each person brings one wrapped gift to put into a pool
2. Each person draws a number to determine which order they get to pick their gift
3. The first person selects a gift and opens it
4. The following person can choose to steal the previous gift or choose a new one to open

** Each subsequent person can do the same – steal a gift from someone else or choose a new one.

You can read the full white elephant exchange rules HERE.

5. Cheap stocking fillers:

Whether you are looking for a cheap stocking stuffer for her, for him, or for your children, remember that putting a few essentials in there is totally OK.  

Yes, I always include candy, small toys, and fun things.  But I also sneak in new toothbrushes, cute socks, chapstick, lotion, hair bows, markers, playdough, etc.  

Include those everyday things that you would be buying for them anyway! 

Our kids also get an orange in their stockings, which is my husband’s family tradition.  So if you have a family stocking tradition, don’t forget to include that!

6. Stick to your holiday budget with DIY Christmas gifts:

OK, so you are not crafty…neither am I.  But that doesn’t stop me from being creative and making something for someone. 

Some homemade Holiday gift ideas:

• Soap, hand cream, bath salts, candles
• Knit/Crochet scarves, hats, stuffed animals for kids
• Create artwork or a door wreath
• Propagate a plant that you have and put it in a pretty pot
• Make a dish or dessert that someone loves and give it to them with the recipe
• Make a personalized cookbook for someone with all of your family recipes
• Create stationary that you can print at home and give as a gift
• Make flavored salts, seasonings, or your famous BBQ sauce to give away
• If you sew – make an apron or a reusable shopping bag

The possibilities are endless! Get creative and find something that you can do.

Sometimes the best gifts are those DIY Christmas gifts.  They are more personal, meaningful and thoughtful. 

7.  Skip making the family picture Christmas card 

Newsflash….they just get thrown away after Christmas.  

Instead, create a photo collage or video to send to friends and relatives online.  For someone who may not be online, send a card in the mail with a few pictures.  

8. Frugal Christmas Gift Giving For Kids:

This: “Something you want, something you need, something to wear, something to read.”

I’m not sure who came up with this concept, but I think it’s pretty genius.  These 4 gift ideas hit all of the essentials and nothing more.  

It’s not only brilliant but it can save you money from buying a million presents and the headache of trying to figure out what to buy someone.  

How to save money on Christmas wrapping and decorations…

9. How to save on Christmas wrapping:  

If holiday wrapping is your jam then buy the wrapping paper! But look for affordable options.  

The Dollar Store is a great place to buy wrapping paper, bags, bows, etc for any holiday season.  They have a good variety and are only $1.  

Another great tip is to always buy the leftover wrapping supplies after the holidays at a steep discount.  Yes, options may be more limited, but you will still find some great deals.  Just store them until next year and you will be ready to start wrapping.  Don’t forget about buying other supplies such as tape and ribbon throughout the year when you find it on sale.  

Another holiday wrapping trick: Buy plain craft paper or non-holiday looking bags that can be used any time of the year and repurposed.  To make the gifts more holiday-ish, use other items to embellish them – think holly, ribbon, cute gift tags, and homemade snowflakes.  Look around your home for inspiration.  

10. Save money when buying Christmas decorations:

Buy used.  There is nothing wrong with buying previously loved Holiday decorations.  The best places to look are yard sales, estate sales, and second hand stores.  

People get tired of the same old decorations in their homes and buy new stuff every year.  At the same time, they usually donate and sell their old things to make room for the new.  

11. Stick to your holiday budget by making Christmas ornaments and decorations:

You can either make your own ornaments and decorations or find creative ways to just keep it simple.  

Think candy canes in a glass jar, simple white candles that are timeless, printable art that you can frame (then reuse the frames for other holidays).  

We live at the beach so I have used driftwood to make a star for the top of our tree. I’ve also collected sand dollars from the beach, glued ribbon onto them and made them into ornaments. Get creative!

12. Recycle old Christmas cards

This is a tradition that I remember doing as a kid with my family.  

After Christmas you are stuck with all of those holiday cards, which typically just get thrown away.  

In my family, we saved those cards and cut them out to make smaller gift tags.  We then reused those gift tags on gifts the next year.  It is a great way to recycle and reuse an item.  Plus, it’s free.  

Christmas Shopping On A Budget:

13. Shop online using cash back websites

Online shopping continues to increase year after year.  If you are not using cashback sites when you are online shopping then you are missing out on some “free” money.  

A cashback site allows you to earn cash back on purchases that you are going to make anyway.  First you need to sign up/sign in to the cashback site, search for the website you want to shop at (i.e. Amazon, Target, etc).  When you link to that site the cashback site is able to track your purchase and the amount that you spend.  You will then earn a percentage of the amount that you spent.  

It’s easy and only takes an extra 30 seconds to do.  

For more money saving tips with online shopping check out the article “How to save money and never pay full price again.”

14. Use cashback credit cards

Sign up for a cash back credit card to accrue points or earn money as you spend.  If you are going to be spending money anyway, you might as well get something back for it! 

I don’t believe that credit cards are bad as long as you are responsible with them.  We travel hack and use credit cards all the time.  But we also pay them off in full every month and do not accrue interest or debt.  

Or if you don’t want to sign up for a new credit card, check your current credit cards that you currently use for shopping deals and cashback.  

Some credit cards to consider: 

***Don’t forget to pay your credit card off in full!  Don’t get into debt! 

Trust me, living a debt free life is so much better than anything that you will purchase on those cards and can’t pay off right away.  

Save Money On Food During the Holidays

15.  Have a Holiday potluck

A Thanksgiving potluck or a Christmas potluck is a great way to save money on food during the holidays.  Buying and cooking a holiday meal can get pricey, especially if you have a big extended family that you celebrate with.  

A holiday potluck will also save a lot of time (buying, prepping, and cooking).  Send out an email or keep a running list of what everyone plans on bringing so that you don’t miss out on any of your favorite dishes. 

Who knows you may even start a great new Christmas tradition that everyone loves and looks forward to.  

16. Bake instead of buying store bought goodies  

If you are anything like me, you look forward to desserts at Christmas.  The best Christmas desserts are those that are baked by someone I know.  That special pie that your mom makes or certain cookies that your sister shows up with every year.  

Again this would be a great holiday tradition to create.  Taking the time to bake with your family or for your family will be something that everyone will remember.  

If you don’t have time to do a lot of baking, how about having a cookie swap? 

A cookie swap is when you and a bunch of your friends or relatives each decide to make one type of cookie or baked goods.  Then everyone comes together with their baked goods and exchanges with others so that you have a bunch of different types to share with family and friends.  

**EXTRA TIP:  Don’t forget to take inventory of your pantry before the holidays.  This allows you to use ingredients that need to be used and to avoid buying duplicates of things that you already have.

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Family Holiday Traditions To Start This Year

This time of year is all about those family holiday traditions.   There are those traditions that we remember as a kid and those that we have started with our own families.  

If sticking within your holiday budget and starting new family holiday traditions is important to you then I have a few ideas that you can try this year.  

17.  Stay home for the holidays

A lot of people travel for the holidays but depending on how far away you are traveling, that may not be very wallet friendly.  

Why not try staying put this year.  Have a low key Christmas with your immediate family or a few close relatives close by.  Nixing the holiday travel will decrease stress, decrease time spent getting to/from your destination, and give you more time to relax and enjoy all the holiday moments.  

18.  24 days till Christmas, Holiday Book Countdown

Kids and adults alike love Christmas countdowns.  They build up suspense and give you something to look forward to.  

I love the idea of reading holiday books with your kids.  And I especially love the idea of picking out 24 books – one to read each night starting on December 1st.  

But buying books is expensive.  And do we really need 24 holiday books?  Not really. 

Solution: The Library.  Check out holiday books from the library each week to read to your kids then return when you’re done. 

Another idea: Holiday book swap with other families.  It’s free, easy, and fun to do.  

To add to the Christmas Book Countdown Fun, check out these Christmas Book Tracker Bookmarks for Kids. 

Each night, after reading 1 of your 24 books, color in a book on the booktracker bookmark.  

It’s a cute, unique, and fun Christmas countdown.  

19. Find cheap or free holiday activities to do with your family

Here are a few fun and frugal Christmas activities to try:

• Drive around to look at christmas lights
• Read holiday books and watch holiday movies together
• Random acts of kindness
• Community/neighborhood christmas events
• Ice Skating
• Visit a town that goes all out on the holidays

Holiday Budget – Things To Remember:

20. Open communication is key

Talk to your family about your wants and needs for Christmas and come up with a plan that everyone can be comfortable with.  Let your family know your expectations and what they should expect from you to decrease the holiday stress around gift giving.

21. Remember what Christmas is all about.

Christmas has gotten very commercialized over the years.  It is important to remember what the holidays are really about.  You should be focusing more on spending time with family and focusing less on how much money you spend and how many presents you buy.  

This is a great time to recognize everything and everyone that you are grateful for.  To hold onto and create new Christmas traditions that you can carry on year after year.  

The best gift is to create memories with those that you love that they will cherish forever.  And this gift doesn’t cost a dime.  

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Do you have a favorite family holiday tradition?  I’d love to hear about it – Share it in the comments below!

Related articles to help you stick to a holiday budget:

1. 17 Meaningful and thoughtful gifts for the frugal mom
2. 27 Brilliant ways to make money for Christmas
3. Best Camping Gifts Under $50