5 Cheery Ways to Enjoy Christmas on a Budget

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Many people think if they stick to a tight budget for Christmas, they won’t be able to enjoy their holiday. However, you can make a frugal budget for Christmas and still have an amazing holiday season at the same time.

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Christmas is a time of joy and celebration, but it can also be a time of immense financial stress.

Americans report gearing up to spend $923 on Christmas gifts this holiday season — just $19 below the all-time high of $942 reported in pre-pandemic 2019 — despite the fact that their spending power has been reduced considerably in the face of persistent inflation.[1]

Eye-watering figures when one considers that 49% of Americans have no or less savings than they did a year ago.[2]

Holiday debt is the gift that keeps on giving, but you don’t have to be the intended recipient.

If you’re looking for ways to enjoy the holiday season without breaking the bank, here are several cheery ways to celebrate Christmas on a budget. From making your own decorations to finding creative gift ideas, these tips will help you make the most of your holiday season without spending too much money.

1. Start by Listing Anticipated Expenses 

Having a topline figure in mind helps prevent spending creep, and serves as a psychological accountability partner. To get started, simply jot down a Christmas budget list of the common holiday expenses you may encounter. 

Possible Holiday Season Expenses:

  • Christmas cards and stamps
  • Grocery bills
  • Christmas cookie and gingerbread house supplies
  • Elf on the Shelf
  • Indoor and outdoor decorations
  • Extra energy costs
  • Packing and shipping gifts
  • Wrapping paper, tape, and other supplies
  • Babysitting fees (hosting or attending Christmas parties)
  • Christmas party expenses
  • Donations for charity
  • Extra tips for your favorite waitress or hairdresser
  • Hostess gifts
  • Holiday family pictures
  • Outfits for photos or parties

Next, set reasonable boundaries for whom you may choose to buy gifts. Setting boundaries can help ensure that everyone involved in the giftgiving process is comfortable and that expectations are managed. Boundaries can also help to keep the focus on the spirit of giving, rather than on material possessions.

Possible Gift Recipients:

  • Spouse
  • Children
  • Extended family members
  • In-laws
  • Nieces, nephews, goddaughters, and godsons
  • Teachers
  • Neighbors
  • Bosses, coworkers, secretaries, etc.

When you’re budgeting for Christmas, the costs can add up quickly. Not all of these expenses will apply to you, but it gives a few examples of costs you might not have remembered. 

And while the average American household considers a Christmas budget per child of around $200 to be the norm, experts suggest far less. At just $75 per child, their suggestion is to invest in year-round core memory events as opposed to a once-yearly toy dump.[3]

As you consider the expenses you’re responsible for this Christmas, take a look at the next step.

Related: 5 Financial Mistakes to Avoid This Holiday Season

2. Create a Frugal Christmas Budget

The key to enjoying Christmas on a budget comes as a surprise to exactly no one — merely having a budget in place. Your completed Christmas budget will show you an overall picture of your projected costs and help you save money in the long run. In this step, you’ll assign a dollar figure to each anticipated expense to give you a clearer picture of how much you’ll be spending.


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Keep in mind that it might take a little bit of time to complete this step. For example, you might look up the cost of a professional photographer, but then realize you have the perfect selfie to put on your Christmas card instead.

Or, you might think you want to buy new Christmas decorations for your front lawn, but change your mind once you see the cost.

Spend some time doing a little research about the items on your list and try to come up with a total projected expense for the season. If you’re not comfortable with this total number, move on to the next step.

3. Find Ways to Lower Costs

You might be looking at your Christmas budget with fresh eyes and seeing a number you simply can’t afford.

Christmas might seem expensive, but it doesn’t have to be. Furthermore, you don’t have to go into credit card debt to make it a memorable and fun holiday season.

Here are some ideas to help you have an enjoyable Christmas on a budget: 

  • Play a gift game. Many families now play games like a white elephant gift exchange or hot gift potato, which means they only have to buy one gift for the adults in their family. Suggesting this can save hundreds of dollars every Christmas. Plus, it’s a fun way to spend time as a family.
  • Stick to the four-gift rule for your kids. Kids have so many toys these days. They can easily become overwhelmed, especially when the time comes to clean the playroom to make room for new toys. The four-gift rule says that you can buy your kids something they want, something they need, something to wear, and something to read. These four presents should be more than enough for them to enjoy their holiday season.
  • Consider thoughtful Christmas gifts on a budget. Budget Christmas gifts are great for teachers, co-workers, and neighbors. If you’re a crafty person, take a shot at some homemade gifts. A nice letter and a $5 Starbucks gift card can also go a long way. Teachers love gifts that are from the heart – a thank you note from your child would go much further than another coffee mug or candle.
  • Have a potluck. Even if you love hosting Christmas dinner, you don’t have to pay for the entire meal. Ask your guests to bring a dish.
  • Use coupons and shop at discount stores. T.J. Maxx and Marshalls are ideal stores for you to shop for gifts. They have amazing name brands at affordable prices. You can also use coupons when shopping online. DollarSprout Rewards — a desktop browser extension available for Chrome or Safari — allows you to save on gifts in a multitude of ways. You’ll earn up to 10% cash back (or more) at 15,000+ popular online merchants. Walmart, eBay, Kohl’s, Macy’s, you name it. Wherever you do your Christmas shopping you’ll be sure to earn cash back on your purchases.

Related: 75 Creative Ways to Save Money Around the House

4. Look for Ways to Make Extra Money

Of course, you can only cut your budget so much. If you’ve done everything you can to lower the cost of your Christmas expenses but you’re still coming up short, it’s time to hustle. Here are a few ways to earn more money for Christmas spending. 

  • Deliver food. Get paid to make deliveries on your own schedule. People don’t like going shopping when it’s cold and snowy outside, so now is a great time to start this side job.
  • Complete microtasks. Not everyone has a ton of extra time to commit to a second job or even a fully involved side hustle. Micro job sites allow users to find and complete simple tasks for cash. From spotting errors on websites and data entry to product reviews and feedback, most tasks can be completed in 1 hour or less.
  • Sell last year’s gently used gifts. Getting rid of some of your old gifts can help pay for this year’s presents. If you have an old cell phone lying around, try selling it on Decluttr. Once your tech is evaluated, you’ll get same-day payment via PayPal or with a check sent by mail.
  • Shovel snow. If you live in a cold climate, there are lots of people who will pay you to shovel their driveway when it snows. Start with your neighbors and friends first.
  • Work retail. Many stores hire extra employees during the holiday season. It’s a short period of time, but you can earn extra money and score discounts at your favorite stores.

Related: 15 Festive Ways to Make Extra Money for Christmas 

5. Take advantage of seasonal offers

Stores are clamoring over customers during one of the busiest shopping seasons of the year. In doing so, they’ll offer generous rewards, cash, or steep discounts just to get you in the door. Along with earning more money, you can also find ways to earn gift cards for free. Use the gift cards to buy your Christmas presents or give them away as gifts. 

Some easy ways to snag free gift cards include: 

  1. Collect Swagbucks. New members get a $10 sign-up bonus. When you build up your supply of Swagbucks by taking surveys, watching videos, playing games, and more, you can redeem them for gift cards to your favorite retailers.
  2. Take online surveys with Survey Junkie. When you cash out the money you’ve earned from completing surveys, you can get paid in a variety of gift cards.
  3. Sign up for InboxDollars. Earn a $5 bonus for signing up, which you can get in the form of a gift card to one of dozens of major retailers. Every time you shop online, take a look at current deals and earn cash back for purchasing items on your list.

Remember, Fun is Free

Even though Christmas can get expensive and you might feel pressure to buy many people gifts, remember that fun is free.

You don’t have to spend money that you don’t have this holiday season. Christmas is about spending time with family and friends. There are so many frugal and free activities you can do that will bring you closer together.

You can volunteer at a soup kitchen and help the needy. Spend an afternoon baking bread and cookies with your children. Take a drive and look at Christmas lights. Surprise your grandmother and her friends at the nursing home. Create a silly Christmas dance choreography and teach it to your nieces and nephews.

Related: 10 Christmas Gifts You Should Never Buy for Someone

Cat Alford

Cat is the go-to personal finance expert for educated, aspirational moms who want to recapture their life passions, earn more, reach their goals, and take on a more active financial role in their families. Cat was named the Best Contributor/Freelancer for Personal Finance in 2014, and over the past few years her writing and financial expertise have been featured in dozens of notable publications like The Wall Street Journal, Yahoo! Finance, U.S. News and World Report, and many more.

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