How To Stick To Your Christmas Budget (Free Planner)


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It is easy to get carried away and spend too much money during Christmas. That is why knowing how to create and stick to a Christmas budget is so important.

Finding gift ideas for your friends and family can be stressful on its own. So the last thing you want is to add more stress to your financial situation.

Sadly, most Americans take on credit card debt to pay for their Christmas gifts.

Credit card debt is one of the worst debts one can carry, so it is time to change our bad financial habits.

Let’s look at some ways you can save as much time and money as possible and stick to your budget.

What Is A Christmas Budget?

A Christmas budget is the amount of money you plan to spend for Christmas.

Like any other budget, a Christmas budget contains many spending categories.

It goes from gifts to wishing cards, from Christmas tree to decoration, without forgetting about Christmas meal.

A budget is not something that should restrain you.

It is a financial tool that can help you achieve your financial goals.

3 Christmas Gift Statistics - Carreira Finance

When To Set Up A Christmas Budget?

There is no better time to start your Christmas budget than now.

If you feel like your Christmas shopping is getting out of hands every year, time to set up a Christmas budget for this year.

Do not wait until you are a couple of gifts in to start looking into it because it might be too late already.

How To Set Up Your Christmas Budget?

Do not get overwhelmed by all the budget categories.

Creating a budget does not happen overnight.

It takes time, patience, and practice.

1. Know Your Money Leftover

Your money leftover is the money that is left in your checking account after spending your monthly expenses.

It takes only 3 steps to figure out what your money leftover is.

  1. Write down your monthly income
  2. Calculate your monthly expenses
  3. Subtract your expenses to your income

The result of this calculation is your money leftover.

2. Christmas Budget Categories

Before going any further, list all the Christmas budgets on a piece of paper, phone, or laptop.

Here are a few categories that can help you start your list.

  • Gifts
  • Trees & Decoration
  • Food & Drinks
  • Entertainment

3. Assign A Budget To Each Category

You need to assign a dollar amount to each Christmas budget category.

Do not forget to subtract the amount to your money leftover every time you set up a budget for a category.

That way you know how much is left to budget for the remaining categories.

If your money leftover is too low compared to how much you plan to spend, go back to step #1 and cut down your monthly expenses.

4. Determine A Gift Value Per Person

By now, you should have a budget for your gifts category.

However, you still need to divide it by the number of people you plan on buying a gift for.

Follow these three steps to determine a gift value for each person.

  1. Make a list of all the people you want to buy a gift for
  2. Calculate the average gift dollar amount per person by dividing your gift budget by the number of people
  3. Assign a gift value per person

Do not forget that if someone gets more money than the average gift value, someone else will get less.

Get Your Free Christmas Budget Planner (PDF)

No need to reinvent the wheel.

Download your free Christmas budget planner and start planning today!

How To Stick To Your Christmas Budget Planner?

1. Print Your Christmas Budget

It is always easier to stick to something when you see it often.

Print your Christmas budget and hang it on your fridge, TV, or laptop.

No matter where you decide to put it, make sure that it is something that you use or see multiple times a day.

That way you do not forget it!

2. Talk To Your Friends And Family

It can be hard to determine how much to spend on gifts when you are on a Christmas budget.

However, an easy solution is to simply talk to them about it.

That way, you can all decide on the maximum value to spend per gift.

It will help you stay on budget and not go overboard.

3. Fill It Out With Your Loved One

Do not fill your Christmas budget out on your own.

If you want it to work, it needs to be filled out by everyone that will use it.

Explain why you are on a budget and make it a game to find ways to reduce costs.

4. Make A Christmas Shopping List

Whenever you go shopping, make a list!

But the most crucial part is to stick to it to reduce your chances of overspending.

So now that you have your Christmas budget, it is time to make a list of gifts for your friends and family.

If you are unsure where to start, look online for gift ideas.

Before shopping, have an idea of the stores you want to go to.

It will reduce the probability of overspending in a shop that was not on your list.

5. Review Your Christmas Budget Frequently

Setting up your Christmas budget is only the first step.

If you don’t review your budget frequently, there is a high chance that you will end up overspending.

Choose the frequency that makes the most sense to you.

It could be every day, every 2-3 days, every week, or every time you buy something.

I recommend that you review your Christmas budget every time you buy a gift, decoration, or anything related to the holidays.

How Much Should You Budget For Christmas Gifts?

Every situation is different. That’s why talking about income percentage rather than a specific amount makes more sense here.

Don’t spend more than 5% of your monthly income on Christmas gifts.

Why 5%? Because even if you don’t save money every month, there are always ways to cut down your expenses and save 5% of your income.

Christmas Budget Calculator

Write down how much your monthly income is.

Then, write down the percentage of your income you want to spend on Christmas.

Finally, click on the calculate button to know how much your budget should be.

What Is The Average Christmas Budget For 2021?

PerNRF reports the average Christmas budget per person is $648.

If you make $25 an hour, it means that your Christmas budget equals 20% of your after taxes income.

As we saw earlier, it is way higher than the 5% recommended.

That’s why so many people take on credit card debt to pay for their Christmas gifts.

How Much Should Be Your Christmas Budget Per Child?

Spoiler alert!

You don’t need to spend hundreds or thousands of dollars for your child to love Christmas.

More doesn’t mean better.

Most children just want to spend time with family and enjoy Christmas traditions.

Take 2 minutes to think about it and to ask yourself this question.

Do you remember more the gifts you got when you were a kid or the joy, love, and tradition around Christmas?

When Is The Best Time To Shop For Christmas?

There is no simple answer to that question. It depends on the purchases you are planning to make.

Shopping after Christmas can yield amazing deals on toys, decorations, cards, and wrapping paper.

While TVs, mattresses, and bedding go on sale at the beginning of February before the Super Bowl.

Whereas laptops and tablets go on sale at the end of August, before school starts.

Let’s not forget about Black Friday and Cyber Monday with great deals on most items.

Planning your Christmas shopping is not something you start to do in December.

It is something you do all year round.

Christmas Budget Mistakes To Avoid

1. Return Policy

Some retailers are using Christmas as a way to clean up their inventory.

In this case, the last thing they want you to do is returning your purchase.

To reduce the number of returns, they may include special conditions in their return policy.

For example, they might require the box to be unopened, or for you to pay for the return fees.

So, before clicking on the buy button, make sure to read the return policy.

Do not be surprised if you cannot return your purchases.

2. Forgetting Christmas Expenses

When we think about Christmas spending, we think about gifts.

It is easy to forget about the cost of wrapping paper, decoration, or even the meal you will cook on Christmas eve or Christmas day.

Having a Christmas budget will help you plan for these expenses and don’t forget about them.

3. Shipping Fees

Another thing to watch for is the shipping costs.

You might have to pay for shipping to receive your item from the retailer.

Or, you might have to pay for the shipping fees if you want to return an item to its retailer.

These costs can quickly add up and therefore increase your Christmas spending.

Most online retailers offer free shipping when you spend a certain amount of money on their website.

Try to buy your Christmas purchases in bulk to avoid paying the shipping fees.

11 Ways To Save Money On Christmas

1. Buy Cheaper Christmas Gifts

If you were given the choice of buying an item in sales or at its full price, what would you do? That is what happens with your Christmas gifts.

They are a few days during the year where you can buy your Christmas gifts at a discounted price. As a result, your goal should be to buy your gifts during those special days.

But to do that, you will have to be well organized. First, you need to figure out when sales happen and set up a reminder to not forget.

For example, Black Friday, Cyber Monday, and after Christmas day are great times to find deals for your Christmas gifts.

Then, you need to know what is your Christmas budget. And finally, you need to have your gift list ready.

If you can find great deals during the year, it can help spread out your Christmas expenses throughout the year instead of buying everything at once.

2. Save Money When Christmas Shopping

The thing that I always like to do is to take some time to reflect on what gift-giving is about.

For me, giving a gift to someone is a way to share my appreciation and love with them.

It doesn’t have to be an expensive gift, as long as it means something special to you.

Think about what your relationship with each person means to you.

When you know what gift to buy, use Rakuten to get cashback on your Christmas purchases.

3. Combine Christmas Expenses

Another great idea to stay within your Christmas budget is to buy combined gifts.

As a result, it will be affordable for everyone if they chip in.

So, talk to your friends or family members to join forces by buying combined gifts this Christmas.

4. Do It Yourself (DIY) Gifts

DIY is a great way to stay within your Christmas budget.

The first benefit is that buying raw materials is way cheaper than buying the finished product. So far, no surprises.

But after building something from scratch, I was proud and surprised by what I could do by myself. It was also great to learn how things we take for granted actually work.

So, when you are on a tight budget, create your Christmas gifts yourself.

It will be a more personalized and unique gift.

People always love it when something has been made for them.

5. Christmas Decorations

Christmas decorations can quickly add up to your Christmas budget. Especially if you are buying new ones each year.

So, the key here is to have a proper way to store your Christmas decorations.

It will allow you to keep them longer and save some money.

Whenever you buy something online and receive the package, keep the bubble wrap and use them to keep your Christmas decorations safe.

If you still need to buy new Christmas decorations, there are still a few ways to save money on them.

You can start by checking out the closest dollar stores from your house.

Another way to save money is to plan ahead of time.

For example, you can buy your Christmas decorations after Christmas day because stores will have massive discounts to clear their stock.

It is an opportunity to get new decorations at a low price if you have room to store them.

6. Potluck

When we think about Christmas, we also think about food!

It is a crucial part of the celebration, but it doesn’t have to be expensive.

For example, you could host a potluck for Christmas this year. It is a great way to save money and include your entire family in the festivities.

Even if it requires a little time and organization, it is worth it.

Make sure to let your guests know in advance about the potluck.

They will have to get organized and know what to bring to the table.

You can even go further down the organization lane by letting them know what food to bring (entree, main dish, dessert, etc…).

It will be easier for everyone and that way you won’t end up with only desserts on Christmas day.

Make sure you have twice as many appetizers and desserts as the main dishes.

7. Christmas Entertainment

Christmas entertainment can become really expensive nowadays. But you don’t have to stretch your Christmas budget to have a good time with your family.

Here are a few things you can do as Christmas entertainment.

  • Play board games with your kids
  • Watch Christmas movies
  • Go on a Christmas lights tour
  • Give your time to your local community
  • Check out your city events calendar to see their Christmas activities

8. Secret Santa

Secret Santa is a great way to have fun, save time and money on Christmas!

You won’t have to spend hours and hundreds of dollars shopping to buy gifts for everyone you know in your family or friends.

Similar to the Potluck idea, it requires a little time to organize.

Start by asking around to know who would be interested in participating in Secret Santa this year.

Then, assign each person to another randomly, and let them know who they need to buy a gift.

9. Wrapping Paper

Wrapping paper always ends up in the trash, so why spend big bucks on them.

Similarly to buying new Christmas decorations, you can find great deals after Christmas day, or you can also visit the dollar store.

You can also help the environment and save money by not buying wrapping paper.

Instead, buy reusable gift bags that you will be able to reuse year after year.

10. Christmas Cards

Depending on how many Christmas cards you send to your friends and family each year, you might be able to save some money.

Because when we think about it, it can quickly add up to your Christmas budget.

Thus, save your money by sending online Christmas cards or messages to your loved ones via social media.

It doesn’t cost a thing, and it is always great to receive something from loved ones.

11. Christmas Tree

The price of Christmas trees keeps going up year over year.

In the U.S. alone and at any given moment throughout the year, about 350 million Christmas trees are grown in farms.

If you want a real Christmas tree, go directly to a Christmas tree farm to pick it up yourself.

You will save money by choosing, cutting, and picking up the Christmas tree you want.

If you want to go with the artificial Christmas tree option, look for online discounts to find great deals.

There is always some money to be saved when comparing different vendors.


With a little bit of organization, budgets are a great way to improve your finances.

Now that you know everything about budgeting, it is time to download your free Christmas budget planner and start planning!


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