How To Create A Smart Christmas Budget
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How To Create Your Christmas Budget in Just 12 Days

December 06, 2019 | 8 min. read

A 12-day plan to cut back on spending during the most wonderful (and financially strenuous) time of year.

On the first day of Christmas, my true love gave to me…a large credit card bill and a load of holiday debt? It happens every year. You plan to cut back on holiday spending and one long credit card bill later, realize once again that you went over your Christmas budget.

According to the October 2018 First Command Financial Behaviors Index®, only 11 percent of service members did not plan to cut back on holiday spending last year.

And even though many intend to cut back, consumers are expected spend an average of four percent more this holiday season, according to the National Retail Federation.

You don’t have to sacrifice a great holiday experience just because you’re saving money this year. Here’s a 12-day plan for cutting back on spending that you can actually stick to.


1. Set your budget.

You can’t save money if you don’t know how much you need to save. Create a Christmas budget by grouping your spending plan into categories, such as gifts, decorations, food and charity. Figure out how much you would like to spend in each category in percentages. For example, you could plan to spend 50 percent of your budget on gifts, 30 percent on charity, 20 percent on decorations and 10 percent on food. Giving a certain weight to each category will make it easier to divide up your spending limit and will help you understand how much to allocate.

2. Plan gifts in advance.

If you’re the type who likes to choose gifts on the fly, take a different approach this year by writing out a list of gifts for each person before you ever step foot in a store. This will help reduce impulse buys, which is one key way for how to spend less at Christmas. Brainstorm ideas based on what you know about the person until you know exactly what to get. Then, compare prices offered by various stores.

3. Think outside the (gift) box.

Gifts don’t have to come packaged and wrapped in paper with a bow. Some of the best gifts are experiences and favors. If you have a spouse who enjoys spending time outdoors, plan for a trip to the nearest state park and make reservations in advance. If you have a family member who is a history buff, buy tickets to a historical museum or local tour. Movie tickets, zoo tickets and restaurant gift cards are also fun, inexpensive ways to spend more on experiences and less on material items.

4. Scout out sales in advance.

Black Friday sales are just a kickoff to month-long savings opportunities offered by stores hoping to attract holiday shoppers, and your Christmas budget should take advantage of these discounts. Because you already have a list of the gifts you need to buy, it will be easy to narrow down the stores that sell those items and determine which sales will help you rack up the most savings that help you stick to your Christmas budget.

5. Choose alternative décor.

When decorating this year, use what you have. Although it can be tempting to buy new Christmas décor, this category of holiday spending can eat up your budget quickly. See if any friends or family members are looking to get rid of old decorations, or try scouting out resale shops for secondhand items. You’re likely to not only find more unique items, but save more as well.

6. Get crafty.

Homemade gifts are usually less expensive than store-bought presents and are often more cherished. Taking the time to create something can show your love and appreciation for another, and personalizing the gift can make it even more meaningful. Candles, soap and picture frames are all easy to make and personalize. Browse Pinterest for more ideas and get busy!

7. Plan a gift exchange.

One easy way to save money, especially between friends or co-workers, is to do a Secret Santa gift exchange. Set a spending limit and draw names. It’s cheaper than buying for the whole group, and it’s fun.

8. Offer what you have.

Instead of a traditional present, consider using your skills as a gift or service. This might include baking, graphic design or photography. If you’re a photographer, offer a free photo session. If you’re an electrician, offer to install some new light fixtures or help with a remodeling project. Acts of service show an appreciation that other gifts sometimes can’t convey.

9. Make the most of recipes.

The holidays generally mean more time in the kitchen. Whether you have guests coming over for a Christmas dinner, are bringing a dish to a party, or are participating in a bake sale, it’s easy to save on meals by planning them in advance. Look at the recipes you plan to use, then identify where you’ll have leftover ingredients and use those in your meals later in the week. By using this tactic, you can eliminate food waste and enjoy some unique spins on classic meals.

10. Donate time instead of money.

If you usually send a check to charity during this time of the year, consider saving more by donating your time instead. Whether it’s ringing a bell, ladling soup or distributing toys, charities are always in need of extra hands. If you have young kids, this can be a great way to instill the value of giving back. You might even decide to make volunteering a new tradition!

11. Buy used.

If you still have some last-minute shopping to do, consider browsing resale shops for gifts. Books, clothing and other items can all be purchased secondhand. This strategy is environmentally friendly, affordable and allows for more unique options. When buying used, be sure to give these items to family members or close friends who will appreciate the thought behind the gift and not the newness of it.

12.  Spend time with family.

On the final day, take time to relax with family and friends. Focus on building holiday traditions or look for free, local activities to enjoy such as a Christmas tree lighting in the town square, a Hanukkah celebration at the temple, or even just a night at home watching Christmas movies and baking cookies. These activities cost little to nothing and bring the focus back to where it needs to be — spending another year celebrating the holidays with loved ones.

For more tips on saving this holiday season (and all year round), speak to one of our helpful Financial Advisors.



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