5 Cheery Ways to Enjoy Christmas on a Budget

Advertiser Disclosure

Our readers always come first

The content on DollarSprout includes links to our advertising partners. When you read our content and click on one of our partners’ links, and then decide to complete an offer — whether it’s downloading an app, opening an account, or some other action — we may earn a commission from that advertiser, at no extra cost to you.

Our ultimate goal is to educate and inform, not lure you into signing up for certain offers. Compensation from our partners may impact what products we cover and where they appear on the site, but does not have any impact on the objectivity of our reviews or advice.

Many people think if they do Christmas on a budget, 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.

Our number one goal at DollarSprout is to help readers improve their financial lives, and we regularly partner with companies that share that same vision. If a purchase or signup is made through one of our Partners’ links, we may receive compensation for the referral. Learn more here.

Christmas is a time to be generous and merry.

But many people think if they do Christmas on a budget, they won’t be able to enjoy their holiday.

Overspending can lead to regret once the Christmas trees come down and the credit card bills arrive.

The average American spends more on Christmas than any other holiday. The American economy is currently strong, and holiday spending exceeded expectations in the year 2018.

EMarketer reported that holiday spending hit a record $998 billion during the last two months of 2018. This was up 5.4% from the previous year and topped $1 trillion in 2019.[1]

When it seems like everyone else is shopping to excess and so many people expect a gift, you may be tempted to succumb to societal pressure. However, you can plan Christmas on a budget and still have an amazing holiday season at the same time; here’s how.

How to Do Christmas on A Budget This Year

Before you even begin planning your holiday, make a budget so you know how much you’ll be spending.

Expense categories to consider when creating a Christmas budget:

  • Christmas cards and stamps
  • Grocery bills for Christmas dinner or side dishes for a potluck
  • Christmas cookie and gingerbread house supplies
  • Elf on the Shelf
  • Indoor and outdoor decorations
  • Extra energy costs for lighting your Christmas tree or outside lights
  • Packing and shipping Christmas gifts to out of state friends and family
  • Wrapping paper, tape, and other supplies
  • Housekeeping/babysitting for hosting or attending Christmas parties
  • Christmas party expenses
  • Donations for charity
  • Extra tips for your favorite waitress or hairdresser
  • Hostess gifts for attending a holiday party
  • Holiday family pictures
  • Clothes/holiday outfits for photos or parties

Not to mention Christmas gifts on a budget for your:

  • Spouse
  • Kids
  • Extended family members
  • In-laws
  • Nieces, nephews, goddaughters, and godsons
  • Teachers
  • Neighbors
  • Bosses, coworkers, secretaries, etc.
  • Clients, employees, and people who refer business to you

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 remember.

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

Create a Frugal Christmas Budget

Having a list of Christmas expenses is only one part of the equation. Now, assign a dollar amount to each expense.

Your completed frugal Christmas budget will show you an overall picture of your projected costs for this holiday season.

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.

5 Ways to Lower Costs on Your Christmas Budget

Lower the Costs on Your Christmas Budget: Peppermint drink and Christmas cookies

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.

1. 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.

2. 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.

3. Consider thoughtful Christmas gifts on a budget. Thoughtful Christmas gifts on a budget 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.

4. 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.

5. 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. Enable the Capital One Shopping browser extension on your computer to automatically apply coupons on dozens of websites.

Related: How to Pay Off Holiday Debt (and Avoid It Next Year)

5 Ways to Earn More Money for Christmas

Christmas on a Budget: picture of a snowman

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.

1. 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.

2. 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. 

3. 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.

4. 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.

5. 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.

Here is a list of more legitimate ways to earn cash quickly if you need more inspiration.

3 Ways to Land Gift Cards for Free This Christmas

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.

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.

There really are so many ways to have a memorable Christmas on a budget.

Plus, the good news is that once Christmas is over, you can start setting aside money every month for the holiday throughout the year. That way, next year for Christmas, you won’t have to stress about money at all because the money will already be there.

Related: 9 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.

Leave your comment

You May Also Like