How to Create a Christmas Budget (and actually stick to it!)

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Learn how to create a Christmas budget this year! Use this free Christmas budget planner to set up a holiday budget this year so you don't go into debt.

It’s so easy to get carried away at Christmas time, isn’t it? We spend tons of money buying gifts for everyone we know. Plus decorations, food, wrapping supplies, and new festive outfits.

Oh and don’t forget the money we spend on fun holiday outings. And all the charitable contributions.

By the time January arrives, we have empty bank accounts and the dreaded credit card bills. Believe me, I’ve been there. Please don’t do that to yourself anymore!

Do you want this year to be different? It can.

You just need a Christmas budget.

Don’t worry, it’s not as complicated or Scrooge-y as it sounds!

In order to prevent the Christmas spending hangover, it just takes some planning ahead. And yes, maybe some paring down of all those unnecessary expectations.

Having a Christmas budget doesn’t mean your holiday season will be boring and horrible. Creating a budget simply means having a plan.

Ready to learn how to create a Christmas budget of your very own?

This post may contain affiliate links. You can view my full disclosure policy here. 

👉 Want to create a holiday spending plan you can actually stick to? Grab our FREE Christmas Budget Planner! 

How to Create a Christmas Budget

The first step in making your holiday budget is to figure out how much you should budget.

How much should I budget for Christmas?

How much you budget for Christmas depends on what your income is, compared to your expenses.

If you don’t already have a household budget, you’ll need to jot down a quick one.

Here’s how to do it:

  1. Write down how much income (take home pay) you’ll receive between now and Christmas.
  2. List your expenses, including regular bills like rent or mortgage, utilities, cell phone, and auto loan, student loan, or credit card payments. Be sure to add in the other costs you’ll incur before Christmas, such as groceries and gas for your car. Now add them all together to get a total.
  3. Subtract those expenses from your income (income – expenses = Christmas budget)

If you find that your Christmas budget is lower than you’d like, you can now lessen your spending on many things so you have more money for Christmas.

Maybe you go out to eat a lot, or spend money on non-necessities. You now have the opportunity to adjust that in favor of adding to your Christmas budget.

You can even get creative and cut back on how much you spend on groceries.

Need help lowering your grocery bill? Check out these handy resources:

👉 Pro-tip: An easy way to see if you’re on track with your Christmas budget is to make sure it’s not more than 1% of your total yearly income.

If you make $50,000 a year, then a $500 holiday budget is right on track.

Spending any more than 1% of your yearly income on Christmas is just too much.

Learn how to create a Christmas budget this year! Use this free Christmas budget planner to set up a holiday budget this year so you don't go into debt.

How to set up a Christmas budget

First of all, print out the Christmas Budget Planner:

Now that you know how much you can spend on Christmas, it’s time to break it down into categories.

Common Christmas expenses include:

  • Gifts
  • Stocking stuffers
  • Cards
  • Festive outfits
  • Gift wrap supplies
  • Food
  • Decorations
  • Charitable contributions

Breaking it down

If you know your total holiday budget is $500, you’ll need assign an amount to each of the Christmas expense categories.

Christmas gifts generally make up the biggest portion of your Christmas budget, so let’s get that out of the way first.

  1. Start by making a list of all the people you need to buy gifts for. Write the amount you’d like to spend on each of them next to their name, keeping your total budget in mind.
  2. Add it up so you get a gift expense total.
  3. Subtract that gift expense amount from your full holiday budget.
  4. If you know you’ll need money to buy baking supplies and ingredients to bring a dish to Christmas dinner, subtract that as well.
  5. If you have room left, break down the remainder of your Christmas budget into the other expense categories that apply to your life.

Related: Check out this post on how to get inexpensive gift wrap and other Christmas supplies!

Learn how to create a Christmas budget this year! Use this free Christmas budget planner to set up a holiday budget this year so you don't go into debt.

How do I stay on a Christmas budget?

Now that you have figured out how to create a holiday budget, here are some tips for sticking to it.

1. Adjust your expectations

Christmas comes around every year. Even if this year’s Christmas isn’t what you wish it could be, there’s always the next one. Besides, it will be a faded memory by Easter anyway.

If you’re on a tighter budget than you’d like, learn from it. Start the new year off by saving $10 a week toward next Christmas.

Keep in mind than spending more does NOT equal a more enjoyable holiday. There are plenty of ways to have a fun and festive holiday season on a budget.

Remind yourself that you’re doing a very positive thing for yourself by creating and sticking to a Christmas budget.

When everyone else is broke and buried in credit card debt in January, you won’t be affected.

If you wish you had more money in your budget to spend on Christmas, check out these 21 easy ways to make extra money!

2. Find ways to save money

Buy everything you possibly can when it’s on sale. Many stores also have coupons that can be combined with the sale prices for even bigger savings.

If you’re shopping online, please don’t forget to go through Rakuten! You’ll get cash back on every purchase.

Just head to their website, search where you want to shop, click through to that site, and shop like usual. Then they’ll send you a check for the cash back you earned. It’s SO easy!

>>> Click here to try Rakuten You’ll get an extra $10 back on your first purchase when you use this link. <<<

Once you’re signed up, you can refer your friends and family to Ebates, and earn even more cash back!

Also, be sure check Craigslist, Ebay, garage sales, thrift shops, and even the dollar store for gifts, especially for kids. They’ll never know the difference!

Related: 27 Thrift Store Shopping Tricks to Try Right Now

If you like to make charitable contributions, donate your time, instead of money.

They will appreciate any and all help that they can get. It doesn’t have to cost you anything if you’re on a tight budget.

Learn how to create a Christmas budget this year! Use this free Christmas budget planner to set up a holiday budget this year so you don't go into debt.

3. Get creative

There are so many ways to give people gifts that cost little to no money. Everyone loves receiving food and baked goods.

If you’re crafty, make Christmas presents instead of buying them all.

Give people ‘coupons’ for you to provide them free child care, house cleaning, backrubs, etc.

Think about what service each person needs or would love, and make a little ‘gift certificate’ for them.

If other people in your family or friend group are on a budget (or should be!), suggest drawing names instead of buying a gift for everyone.

Or go on a fun outing together instead of giving gifts. After all, do any of us really need more STUFF?!

RELATED: 25 DIY Christmas Ornaments – Easy Homemade Gifts & Decor!

4. Use cash

Yes, I mean literal cash money. Like paper bills and coins.

If you’re serious about sticking to your holiday budget, withdraw the total budget amount from the bank. When it’s gone, it’s gone.

There’s something different psychologically about handing over cash versus swiping a card.

It’ll make you really think over every purchase.

5. Stop worrying what everybody else is doing

Seriously, you may need to put your blinders on. If you find yourself easily persuaded or envious, maybe lay off social media for a few days around Christmas.

Who knows, you may even like it.

Related: 10 Ways Social Media is Destroying Your Happiness

Christmas isn’t about showing off, or spending the most money, or having the fanciest decorations.

There are far too many people in this world who have nothing.

Plus, it’s just plain silly to blow your wad for one day every December.

I really hope this post helped you create your Christmas budget. If you stick to your holiday budget, you can ring in the new year without the burden of Christmas debt.

Having a plan for your money will help you to stop wondering where it all went.

Merry budgeting!

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P.S. Follow me on Pinterest for lots of other festive and fun holiday ideas!



Learn how to create a Christmas budget this year! Use this free Christmas budget planner to set up a holiday budget this year so you don't go into debt.

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