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How to Create and Execute a Successful Christmas Budget

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It’s the most wonderful time of year again: Christmas time! Filled with hot cocoa, candy canes, family, and of course shopping! Christmas can be a huge budget buster for many Americans who aren’t prepared. But this year, you won’t be one of them. Once you know how to budget for Christmas, you’re sure to win with money and gifts this Christmas season!

Look at Last Year’s Spending

I know… This may be something that you’re wanting to avoid looking at. But you really need to have knowledge of your previous budget. So look back at your December budget and total up your spending. This will help you be aware of what you spent last year, and will also provide some framework for your budget this year!

Are you surprised by how much you spent last year? Budget less this year. Or maybe you’re making more money this year and have more people on your list this year. Budget more! Use last year’s spending as a resource for this year’s budget plan and that will help set you up well.

Determine Your Spending Amount

Once you’ve looked at what you spent last year, it’s time to set your 2017 budget amount. Before you even step foot in a store, you need to decide exactly how much you will spend on Christmas this year. If you have been saving over the year, this is easy! It’s however much is in your Christmas fund. And bonus points to you if you created a Christmas sinking fund to contribute to all year.

If you didn’t save for Christmas all year, don’t worry. You’ll still be okay. But you can’t go over on your Christmas spending! Write down what you may be receiving for a Christmas bonus, and how much you’ll be receiving for December pay checks. First, make sure that all your necessities are taken care of: housing, food, debt payments, gas, etc.

Then, determine a reasonable amount to spend on Christmas total. This is the first part of making your Christmas budget.

Create A Giving List

Once you’ve decided how much total you are going to spend, it’s time to assign everyone an amount. Write down the names of everyone that you plan to give to. Don’t forget to include that extended family gift exchange or that white elephant game at your work. List every person and decide on a total amount for a gift that will total to the amount that you decided on earlier.

Budget For the Extras

It’s important to note that your Christmas budget shouldn’t include just gifts for friends and family. You’re going to be spending money on extra things in addition to gifts! Christmas tree, Christmas lights, extra giving, Santa pictures, Christmas baking, Christmas dinner… There’s A LOT that goes into Christmas!

Make sure that you’re prepared to spend for these items as well! Include them in your initial budget so that you’re not blindsided by the hidden costs of Christmas.

Choose Meaningful Gifts

Now that you have established your spending plan for everyone on your Christmas list, it’s time to start shopping! I recently did a post on 20 Christmas Gifts Under $20 From Amazon. I hope that this is a helpful for finding budget-friendly and awesome gifts for your loved ones! You don’t have to spend a lot to show your loved ones that you care.

Spend more time thinking of what each person on your list would truly appreciate, rather than spend more money on a random gift that they’re never going to use again. Be very attentive to discover what your friends and family would appreciate. If you aren’t sure, don’t be afraid to ask! Make sure that your money will be well-spent on gifts that all would appreciate. P.S. The gift guide I created has items that just about everyone would enjoy.

While I’ll admit that I’m not the best at this, I am a huge fan of minimalism. There’s nothing worse than holding onto random trinkets you got as gifts from random people. It’s like you know you’re not going to use it and don’t have room for it, but yet you still keep it around. Anyone else been there?

Don’t put your loved ones though that! Rather than buying a bunch of random things that people are going to throw away, do your research on finding someone a thoughtful and meaningful gift. I can’t stress this enough! If you don’t do this, then you’re literally just wasting your money! And I hate wasting money…

Track Your Spending

Now that you’ve been spending on your Christmas budget, it’s important to start tracking. Keep receipts so that you know how much you spent on each person and update either a spreadsheet or paper list with your spending.

Only half of budgeting is actually creating the initial budget. It’s important that you’re tracking your spending or else how will you know if your budget is working??


Bonus: Notes for Your Next Christmas Budget

Now that you’re the Christmas budget pro, it’s time to start thinking about Christmas 2018. Crazy. I know. But you really should be preparing for Christmas the whole year round! After Christmas 2017 wraps up this year, challenge yourself and start a tentative Christmas budget for the next year. Now you have 12 months to plan and save!

Create a sinking fund for Christmas and put money in it every month starting in January. That way when you get to December, you’ll have no stress whatsoever about making Christmas happen for your family. Planning is key to a successful Christmas budget!

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1 comment

  • fin$avvy panda @

    November 22, 2017 at 6:42 am

    Hi Marissa! I enjoyed reading this post. You provided great tips here about a Christmas budget. I definitely agree that we should try to avoid buying gifts for the sake of buying just because it’s Christmas, or at least pay attention to what they want. Generally, I’d just take my family or friends out for lunch or dinner and that would be my gift to them because there’s never really anything they want or need lol.

    Thnx for this post! 😊

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