Having a frugal Christmas budget means you are mindful of what and how you spend. Here are some tips to make the most of Christmas (even on a tight budget!)
Christmas happens every year, but it should not be a reason to go into debt (or add on to it).
If you are worried about how to survive the Christmas season with little to no money, I can help!
You can still have an amazing, joyful Christmas even on a very tight budget.
What Is a Frugal Christmas?
Frugal people spend less than most other people and are very conscious about where their money is going and stick to spending money on what truly matters to them.
A frugal Christmas is when you focus on a frugal Christmas budget. (Everyone should have a budget, not just frugal people!)
Instead of thinking only about how much you can spend, look at the Christmas season as a whole and focus on what you are going to do and enjoy!
So many little things that contribute to the magic and joy of the season cost very little to do:
- drinking cocoa and eating popcorn while watching Christmas movies
- driving around to look at Christmas lights
- playing in the snow
- having a PJ day with movies and snacks
What Should My Frugal Christmas Budget Be?
Your Christmas budget should simply be what you can realistically afford (without going into debt). This will look different for everyone and will require you to know your spending habits and keep a regular budget.
Can I Have a Good Christmas on A Budget?
As a single mom, I know how hard it is to struggle on a tight budget and feel like you are missing out on stuff.
If you have little kids or a large extended family, you might be feeling pressure to spend a lot of money.
If you really want to make the most of your Christmas or find extra money to spend during the holidays, you absolutely can!
Tips for a Fantastic Frugal Christmas on a Tight Budget
If you are serious about keeping to a budget during the holidays and you need some extra help, check out these frugal Christmas ideas below. I have personally used many of these tips to save money and reduce stress.
You can certainly use one or all of these tips to save (or make) some extra money during the holidays.
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1. What Will You Focus on This Christmas?
Before you start worrying about planning Christmas on a budget, start by asking yourself some questions:
- What do I want to focus on during this Christmas season?
- What is the most important part of Christmas?
- What do I want to do with my time and money?
Having a truly wonderful Christmas doesn’t mean you need to be worried about spending lots of money or buying tons of expensive gifts.
Begin by writing down a list of your top priorities for Christmas and what you want to make sure that you and your family experience this season.
For example, here is a list of my priorities:
- spending quality time with my kids
- focusing on the birth of Christ as the main purpose of the season
- connecting with others, especially dear family and friends
- helping out wherever I can (taking my kids to volunteer at a soup kitchen or help with decorating our Church, for example)
- creating and fostering loving, joyful family memories (through spending time together and having special events and activities, not from buying lots of stuff)
- buying a few special things for my kids
- enjoying the simple joys of the season!
Looking at this list, I think I hardly need to spend much money! And it’s true!
What are you going to focus on?
2. Set a Frugal Christmas Budget
Once you have decided what you and your family are going to focus on during the Christmas season, write down any must-haves – things you absolutely want to buy or do during the holidays (for example, gifts for kids, gifts for family members, tickets to a Christmas show, etc.) and estimate the cost of each item.
Make a comprehensive list of all the things you want to buy:
- Gifts (and write down the name of each person who you want to buy a gift for)
- Special Events
Remember, if you do choose to buy gifts, you do not have to buy a gift for every person you know or spend the same amount for each person on your list!
Determine the total amount you can afford to spend on Christmas gifts and then decide how much you want to spend on each person individually.
You can use a Christmas Budget sheet and a Christmas Gift List to make a list (and check it twice!).
3. Plan for Christmas in Advance
Once you have your frugal Christmas budget ready, start planning for Christmas in advance!
You should start at least 6 months before Christmas, but it’s much better if you start preparing for the next Christmas right after this Christmas!
Then you have an entire year to get ready!
You can save a little bit extra each month and even buy gifts on sale throughout the year.
Look at your budget and how much time you have until Christmas. Then, decide how much money you would like to have for the holidays and figure out how much you need to save up each month.
Then start saving!
You can even break the amount down to figure out how much you need to save each week, and use this handy chart to keep track.
No matter what time of year – start saving now!
4. Make a List of Gifts & Estimate the Costs
After you set a budget for gifts, write down the names of each person you want to buy a gift for and how much you would like to spend on each.
Don’t go over your set amount!
(Remember, you don’t have to buy for everyone! A nice homemade Christmas card with a heartfelt, handwritten note inside – and maybe some family photos tucked inside – would make a wonderful gift for anyone!)
When you have made your gift list, stop a minute and ask yourself some more questions:
- Do you need to buy each person a gift?
- Can you spend less on each person?
- Can you focus on getting just one gift per child? (One year, I bought both my girls one small, meaningful gift each and some useful stocking stuffers and they were very happy!)
Once you’ve made the budget and list, stick to them!
This will help you save money and stay within your frugal Christmas budget.
5. Try Buying 4 Gifts per Child
If you have the budget for it and want to buy your kids more than one gift each, you can try the “4 gifts per child” concept.
This idea has been around a while. To avoid excess stuff and keep within your budget, you can focus on buying only 4 gifts per child.
The 4 gifts are generally listed as:
- Something they need
- Something they want
- Something to wear
- Something to read
I like this idea because 2 out of 4 of these gifts are practical and useful (or 3 out of 4 if you count books as useful and they are!). Practical gifts make my mom-heart happy. Ha!
6. Keep Track of Your Christmas Spending
Whenever you buy a Christmas item, immediately write it down on your budget.
You can use a simple sheet like this to keep track of your gifts and spending.
7. Save Money on Gifts
Look for ways to save money on gifts.
- see if you have anything you can regift
- check out secondhand items (at local thrift shops or garage sales or on Craigslist or eBay or Decluttr
- look for sales and deals throughout the year
- use the layaway plan for more expensive gifts (that still fit within your budget)
- give homemade gifts (you and your kids can spend time making gifts together – it can be a special, fun time!)
- have a gift exchange (We did this one year with the whole extended family. It was fun, simple, and easy! All the names were put into a hat and we each picked one name and a spending limit was set. I only shopped for one person and it made it so easy and less stressful! Plus, it was fun to see everyone open the gifts and who bought what for who.)
- encourage kids use their money to buy gifts – If your kids really want to buy something for a friend, encourage them to use their own money. They will learn valuable decision making and personal finance skills!
There is a lot of waste in the world, but you can also help the environment and curb the excess stuff we have by saving items from landfills and that saves you money too!
Budgeting for Kids – Teach Them to Manage Money
Fun Money Gifts for Kids
Easy Money Management System for Kids
8. Save Money on Meals and Snacks
Holiday treats are so enjoyable, but so tempting!
Here are some ways to save on holiday food, treats, and snacks:
- don’t eat out (or limit eating out to 1 time per month)
- make your own cookies and treats and home (this is fun to do with kids and can give lots of lovely memories)
- Holiday potlucks – save money by having a potluck and bringing only one dish instead of doing all the cooking yourself.
9. Earn Cash Back While Christmas Shopping
Earning cash back while shopping is a win-win situation!
You purchase what you need and get money back!
Try one of these cash back apps:
10. Dollar Store Deals
Before heading to your normal shopping spot, stop at the dollar store first.
You can get lots of regular Christmas items at the dollar store (for less!):
- gift wrap
- ribbons, bows, boxes, bags
- cards and stickers
- Christmas decor
- small items for stocking stuffers
11. Don’t Go Into Debt (i.e. Avoid Credit Cards)
It simply isn’t worth going into debt for Christmas shopping.
Avoid using a credit card and pay for everything in cash.
Especially avoid the credit cards that people offer at the checkout counter. Even though they might offer big discounts for first-time card users, the interest rates for these cards are usually horrible.
Instead, save your money all year in envelopes for your Christmas budget and pay for everything in cash.
Related: Money Saving Challenge Worksheet
If you have Amazon Prime, you can purchase items and have free 2-day shipping.
12. Give Memories Not Stuff
Focus on creating memories with your children.
Remember the Christmas where it snowed a bunch and we made snow angels and then drank hot cocoa and watched Elf?
Yeah, these things will last longer in your kids’ minds than some trinket or toy they will outgrow eventually.
Do you remember what gifts you received when you were 8?
For some other gift ideas that focus on the experience and making memories, check out: Creative Experience Gifts for Kids
13. Give Practical, Useful Gifts in Stockings
Maybe it’s the mom in me, but I LOVE practical gifts.
When someone gives me my favorite socks, toothbrush, or food/pantry item, it’s delightful!
One year my sister gave me a small wicker basket filled with my favorite snacks and treats and it was the best!
I always put useful gifts in my kids stockings and they love it too! (Maybe because they are still young enough to find the joy in everything!)
Here are some ideas for helpful stocking stuffers for any age:
- soap – with cute shapes
- hair clips or ties
- favorite snack packs – like these or these (great for school lunches or afternoon snacks!)
- granola bars – my kids love this kind
- nail polish – we like this non-toxic kind
14. Don’t Buy Everything!
It’s very easy to go overboard on decorations, gifts, and food.
Don’t buy expensive or fancy decorations or paper or anything.
Keep it sweet and simple.
15. Make Extra Money
If you start early in the year and want to find extra money to add to your Christmas budget, you can try a number of side hustles:
- driving for Uber or Lyft
- selling items you don’t use
For more ideas, check out this list of side hustles.
Look also at these ideas for making more money:
- Make an Extra $1000 per Month
- Creative Hacks to Make Money
- Creative Ideas for Kids and Teens to Make Money
16. Practice Gratitude
Find the joy of Christmas in very simple things (lights, decorations, music, the joy on children’s faces just because of the season).
Be present in the moment.
Slow down and find the joy in each day.
Watch your children find joy in the smallest things.
Offer homemade baked goods to lonely family members and neighbors.
Be thankful for what you have (without comparing to others).
17. Make Your Own Simple Christmas Traditions
We break out the Christmas box and decorate starting the first day of Advent.
My girls love putting up our Nativity scene and playing with it over and over the first day (and all the days after!).
On Christmas Eve, we sleep in sleeping bags underneath the Christmas tree with lights and Christmas music (it’s so magical).
We have simple, yet fun decorations.
Even if you feel that you have a very tight budget for Christmas, you can still have a lot of joy during this season.
18. Lots of Free (or Very Low-Cost) Frugal Christmas Ideas
Remember to look back at your Christmas season goals.
Do you want to give lots of gifts?
Do you want to make lots of memories?
Here are some free (or very cheap) ways that you can celebrate Christmas and still have a lots of fun, and make many loving memories:
- Watch Christmas movies (We get them at library for free. Be sure to put them on hold early in November!)
Here are a few fun ones:
- Read Christmas books.
Here are a few of our very favorites:
- The Christmas Miracle of Jonathan Toomey by Susan Wojciechowski
- The Jolly Christmas Postman by Allan Ahlberg
- Bear Stays Up for Christmas by Karma Wilson
- Drive through town to look at lights
- Surprise a friend with a visit and bring a special snack to share
- Have a hot cocoa party – make a buffet with different kinds of hot cocoa or toppings (sprinkles, marshmallows, whipped cream) and snacks
- Play a board or card game.
Here are a few of our favorites:
- Make popcorn garlands
- Go caroling
- Bake cookies (and then share at a cookie swap!)
- Snow fun! – Walk in the snow or build a snowman or make snow angels
- Give back – volunteer your time and help others (at a soup kitchen or homeless shelter)
- Wear Christmas PJs
- Listen to Christmas music
- Make a thankful list
- Donate toys to a toy drive
- Give to charity – you can give gifts or your time as service
- Make a homemade coupon book for gifts (with coupons offering things like: a foot massage, breakfast in bed, time playing a favorite game, cleaning the bathroom, etc.)
- Make your own Christmas cards (instead of buying them). This can be extra special if you have your kids make them!
- Roast marshmallows
- Make a gingerbread house
- Design a homemade Christmas wreath from a walk through the woods (you can use pine cones, fallen branches, leaves, etc.)
- Attend free local Christmas events (concerts, plays, library storytimes, etc.)
- Make paper snowflakes to use for decorations
- Make video-calls to relatives and friends you haven’t seen in a while
- Watch a local tree-lighting ceremony
- Make apple cider in a crock pot
- Give gifts to kids only
- Donate items to a shelter
- Use dollar store decorations
- Reuse Christmas wrapping (or recycled paper, newspapers, or magazines, or just put a bow on a box)
- Make a homemade advent calendar to countdown the days to Christmas
- Listen to Christmas music while you paint, decorate, or dance around!
- Have a slumber party! (My girls and I sleep under the Christmas tree on Christmas eve – we have been doing this every year since they were very little and they LOVE it. We put out our sleeping bags and turn on the Christmas lights and music.)
- Sign up for a free Amazon Prime trial shortly before Christmas and get free 2-day shipping (then cancel the trial). I did this one year!
Final Thoughts on a Frugal Christmas Budget
When planning your frugal Christmas budget remember to keep in mind the question, what do I want to focus on during this holiday season? Then, make plans to keep your priorities in focus. This doesn’t mean you can have any fun and it doesn’t mean you need to spend tons and tons of money.
What do you do to stick to your Christmas budget? What other tips do you have?