While Christmas is one of the most highly anticipated holidays of the year, it can also be an especially stressful time for families financially. From buying Christmas gifts, cards and decorations, to contributing to multiple Christmas potlucks and special charity events, Christmas is often overloaded with commitments that can put you way over budget.  

But there’s good news - it doesn’t have to be that way! With some extra effort, you can plan to spend within your means over Christmas and not spend January getting out of debt.

If you’re already struggling with debt, you may need to carefully examine how much you can actually afford to spend this Christmas and make the necessary adjustments to stay on track.

We’ve put together a list of 51 ways to budget for Christmas. These practical tips will help you enjoy Christmas and stay debt-free at the same time! 

  1. Save up in advance. Create a gift-giving list that includes how much you plan to spend on each person. (Don’t forget to include gift exchanges, teachers, co-workers, neighbours or those you normally purchase gifts for.) Also, decide how much you will spend on events, entertainment and other Christmas-related expenses. (Remember to include the cost of gift wrap, decorations, tree, et cetera.)

    To determine a monthly amount to put away for Christmas, add up your last year’s total Christmas spending and divide the total by 12. This way, you’ll know exactly how much you have available for your Christmas spending.

    If you typically spend more than planned at Christmas, you may need to cut back on how many gifts you want to give and events you plan to attend. Try the "envelope method," by adding your saved cash into an envelope once a month – and then use only the cash in that envelope for Christmas spending. Once the cash is gone, that’s it!
  2. Create and stick to a budget year-round. You may be amazed to discover how much you spend on eating out or entertainment throughout the year. By tracking your expenses and managing your money, you may be able to have more money to spend at Christmas. Managing your money well can be a valuable lesson you can pass on to your children, so include them in the process.
  3. Tell your family and friends your budget plans. Explain to your family that you are trying to stick to your budget (especially if you will be significantly cutting down on your gift spending). Being open about your financial planning with loved ones can help them be understanding of your need to uphold a debt-free Christmas.
  4. Set a dollar amount limit per gift. Keep your limit within your income.
  5. Decide to buy only one gift per person. Whatever boundaries you decide on, stick to them.
  6. Say no. Sometimes there are too many activities and gift exchanges and you may simply need to say "no." Maybe you know other family members or friends who are also trying to stick to a budget; agree that you will either limit your spending or not exchange gifts this year. One benefit of saying "no" to some events is that your kids may find Christmas less stressful.
  7. Make a list of gifts you’ve already bought. Avoid duplicating what you gave someone the previous year by tracking what you’ve previously given them. You can also use this list to track gifts you’ve already purchased for the coming year (if you buy gifts year-round).
  8. Exchange wish lists. Avoid wasting money on gifts that people don’t want by asking for what they do want.
  9. Exchange names. Instead of buying gifts for each family member, pick names out of a hat to cut down on the number of gifts you need to buy. You can keep who-has-who a secret for some fun suspense.
  10. Give group gifts. You may be able to buy better gifts by combining money as a group.
  11. Clear the house and collect money for Christmas gifts. You may have items around your house that you no longer use that you could sell in a garage sale, to a consignment store or online.
  12. Shop for Christmas gifts throughout the year. Keep a lookout for sales on items that would make perfect gifts – and avoid that Christmas rush!
  13. Give your time. Make a coupon book of tasks you are willing to help with as a gift, such as housecleaning, babysitting, manicures, snow shovelling, lawn mowing, dog walking, car washing or leaf raking. Or, if you know a trade, you may be able to offer haircuts, tax preparation, car repair, photography or computer training.
  14. Share your family recipe collection. Put your favourite recipes in a photo album. If you have extra time, make the recipes, take photos of the finished food, then include the written or typed recipe on the opposite page.
  15. Re-gift. There’s nothing wrong with re-gifting; it is a great way to put to use duplicate items or things you have no use for.
  16. Donate gifts in someone’s name instead of giving them a gift. Instead of spending money on a gift for someone who would rather see that money used for charity, purchase a gift for someone else in need, and give a card to your friend to let them know you’ve given a gift in their name.
  17. Buy previously-loved gifts. A great way to cut down on expenses is to decide as a family to give only second-hand gifts this year.
  18. Give your family photo. Frame your photo or make it into a calendar.
  19. Frame your child’s artwork. Especially for grandparents who live far away, a child’s art can be a treasure. A description on the back can be helpful if it’s not clear what the drawing is.
  20. Make your gifts. Homemade bread, cookies, jam, jewellery and craft items make great gifts.
  21. Give frozen, home-cooked meals. For people who don’t have much time to cook or perhaps have limited funds for food, frozen meals in individual containers can be a welcome gift. Include notes on the packages for cooking instructions and festive decorations to dress them up.
  22. Offer to babysit. Some families find Christmas and all that goes with it beyond stressful (or almost impossible – especially if there’s a newborn or physically challenged child in the home). Take the kids for a day so the parents can decorate the tree, string lights outside, bake, shop or wrap gifts without interruption.
  23. Write a card of appreciation. Sending a friend or relative a thoughtful card reflecting on what you appreciate about them can be more heartwarming than any material thing. Be specific – think of a particular personality trait that you really enjoy or a specific situation in which they helped you.
  24. Sew, knit or crochet your gifts. Depending on the price of materials, you may be able to make gifts cheaper than buying them. You may even be able to reuse fabric from a thrift store or garage sale. Some ideas to make are aprons, placemats, toques, scarves, potholders, purses and picnic blankets. For example, hand-sewn, child-sized aprons make great gifts for kids who often enjoy cooking with their parents and grandparents.
  25. Grow plants to give. Some plants, like ivy or violets, can develop their own roots from the stems of their leaves. From a plant you already have, cut off a section and keep it in a cup of water for a couple weeks. When the roots start growing, plant it in a pot.
  26. Make a scrapbook. Compile your family photos from the past year and write how your family has changed. You can include each family member in the process, either by recording their comments about events or by asking them to create their own pages.
  27. Collect a hot beverage basket. Combine hot chocolate, coffee, tea or apple cider with a mug or tea cup. Thrift stores often have unique, collectible cups and can help keep your expenses down.
  28. Give a family movie night. In a large bowl, add popcorn, some candy and a gift certificate to a DVD retailer.
  29. Exchange cookies. Hold a cookie exchange party: have everyone make a set amount of one variety of cookie, bar or square, then gather together and trade off. It eliminates the need to spend hours on your feet in a flour-dusted kitchen.
  30. Give gift certificates. With gift certificates, you know your recipient will get what they want. You may be able to order gift cards with a reward program you belong to. Some programs may give gift certificates without any additional cost to you.
  31. Give a coupon promising a Skype call on a specific day each month. Encourage year-round communication with friends and family.
  32. Buy a book, read it out loud and record it. Give the book and the recording to your kids, nieces, nephews or grandchildren. Or, make up a story. They will enjoy hearing your voice. This is a great gift idea for family members who live far away.
  33. Write your life story. Your kids and grandchildren may appreciate reading about your youth, how you met your spouse, your favourite school subjects and any lessons you’d like to pass on. It might even be helpful to include a family tree to help your kids understand their relationship to their relatives. Make copies for each of your children and grandchildren. (Hopefully this will prevent your family history and photos from being lost.)
  34. Create a dress-up box for kids. Find fun costumes at a thrift store, wash them and present them in a dress-up box or large gift bag. 
  35. Wrap your gifts in something useful. Try a tea towel, blanket or photo box.
  36. Use recycled paper as gift wrap. Explore a thrift store, garage sale or your own basement and closets for old maps, sheet music, comic books and magazines to use as wrapping paper.
  37. Ask your kids to create personalized wrapping paper. Use larger sheets of paper and provide painting and colouring materials.
  38. Wrap the gift in a cloth bag that can be reused for groceries. Sew or buy a reusable bag.
  39. Make your own gift tags from scrap paper.
  40. Send Christmas cards by email instead of paper. Save money on the cards and postage. Or, if you really want to send Christmas cards, buy them after Christmas at Boxing Day sales for the next year. Hand delivering your cards will also save you on postage costs.
  41. Teach your kids about Advent. Create a meaningful family tradition by holding a family candlelight service. For a detailed suggestion about celebrating advent with your family, read "This little light." Or, simply read out loud the story of Jesus’ birth.
  42. Decorations from nature. Instead of purchasing Christmas decorations, find a friend who is willing to give you permission to cut evergreen branches and harvest pine cones from their property. Not only do you help with the pruning, you also get biodegradable, environmentally-friendly decorations.
  43. One-on-one time with your kids. Read more about quality time with your kids in "What kids really want for Christmas."
  44. Swap entertainment with another family. During the holidays, there is often extra time to spend as a family. Instead of buying new board games or puzzles, consider swapping with another family. Or, perhaps you can loan your games to a family who would not be able to afford them.
  45. Visit a seniors’ home. Offer to spend some time singing Christmas carols at seniors’ homes and invite other families to participate. You can involve your kids by asking them to make cards or cookies to hand out (but make sure to obtain clearance from the facility staff before distributing food).
  46. Host a Christmas potluck. Enjoy spending time with friends and family while sharing the expense of the meal together.
  47. Invite people to Christmas events by email instead of using printed invitations. Save money and help the environment by emailing instead of snail mailing.
  48. Consider donating money and resources to the less fortunate. Food banks, soup kitchens and other organizations that support people in need will always welcome your donation. You can also volunteer your time at many organizations.
  49. Enjoy free community events. Check your local newspaper for free events for your family.
  50. Limit your long-distance travelling. If you typically visit multiple relatives over the holidays, decide to alternate and spend Christmas with one family this year and the other family the next.
  51. Record your family and individual goals for the coming year. While you are spending time as a family, write down milestones of the previous year and hopes for the new year. If you make this an annual tradition, you’ll enjoy reading your past year’s comments.

Keeping on budget may not be easy, but we hope you have found this series on budget-friendly ideas for Christmas helpful in keeping you debt-free this year.

© 2008 Focus on the Family (Canada) Association. All rights reserved.

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