With the worldwide economy still in a slump, now is a more important time than ever to conserve your savings.  

'tis the season for savings. Most people spend hundreds of dollars or more on holiday gifts every year. Add in the cost of clothes, food, alcohol and other holiday necessities, and you have a major financial expense on your hands every year.

Unfortunately, many people end up dreading the Christmas season simply because it often means incredible amounts of debt and financial stress. And in a world where financial and economic stresses are being shoved in our faces every day, we hardly need to add to the burden. Christmas isn't about the materialistic bits and bobbles found in department stores — it's about family and spending time with one another.

A healthy way to start formulating your Christmas budget is by making a gift list.  Also, begin to think about where you will be during Christmas and what travel arrangements are necessary. Finally, look into a few activities to make this holiday a memorable one or simply to help you pass the time quickly and painlessly while you are with your in-laws. Don’t wait until the last minute and risk losing out on some spectacular deals. Make your Christmas budget list and check it twice.

Creating a Christmas Spending Budget

You can reduce your spending for Christmas by using personal finance software along with these tips for budgeting for the holidays every year.

In case you're reading this when it's too late in the year to use a budget to save for the cost of festivities, I've included money saving ideas and advice to make the holidays more financially manageable right now.

1.     Start Tracking Christmas Spending

The first step to starting a Christmas budget is to open your personal finance budget and create a spending category called 'Christmas', 'Holidays', or any other term that's meaningful.  For those of you that are tech savvy, there are a number of personal finance software programs to make this task of budgeting easier and more organized.  

If you really go all out for Christmas or other holidays with elaborate celebrations, consider using subcategories to budget individually for food, decorating, teacher gifts and anything else you typically purchase. It's easier to determine specific areas you can cut back on if you need to when you use subcategories, which helps with spending less next year.

When you make holiday purchases, record them. 

2. Analyze Spending

Now that the budget is set up, it goes without saying that you need to stick to the plan. But, the next step to effectively budgeting for Christmas happens after the holiday is over. 

After you've entered all Christmas expenses, create a budget report or a category report that shows planned vs. actual spending.

The report should be set up with only the Christmas or holiday spending categories so you can focus on those expenses. Don't be discouraged if you need to make some adjustments for next year, this is common.

3. Budgeting for Christmas

Now that you're aware of what the Christmas holidays cost you this year, set up next year's holiday budget. 

Whether you blew your budget or have some cash left over, you need to make some adjustments to the budget for next year. If you overspent, consider whether your budgeted amounts are realistic, or take a look at ways to save money on the holiday next year in Step 4 and come up with a plan to avoid over spending. If you came out under budget, congratulations! Depending on how much less you spent compared to the budget, either adjust your planned numbers down a notch or just leave them as they are in anticipation of higher prices next year. 

You can account for rising prices next year by multiplying this year's spending by 1-1.5%.

To prepare financially for next year's holiday costs, deposit a monthly amount into a savings account that is designated for the holiday so you have the funds available next year.


According to a poll, people are scaling back their holiday spending in droves. If you would like to cut down on spending in attempts to avoid the stress of holiday debt, here’s Christmas gift giving ideas that won’t break the bank.  Perhaps you can start a new family gift-exchanging tradition, allowing you and your entire family to save more each and every year.

Draw Names

Many families, especially extended families who are spread out in different cities, adopt the name-drawing tradition for gifts.

Just Give Gifts to the Kids

Another strategy for large extended families is to have each relative only buy gifts for family members under 18. This greatly cuts down costs and ensures that those who might appreciate the gifts most -- kids -- are the ones who get them. It then becomes a sort of rite of passage when the kids grow older and switch to the gift-giving role.

Place a $15 Limit

Another strategy people employ is putting a spending limit on each gift. While you and your family can choose whatever number you want, keeping the dollar amount low can sometimes spark people to become more creative with the money that they do spend, taking advantage of sales or putting a lot of thought into the best way to make the most of the allotted budget. While this may cut down on the number of expensive gifts exchanged, it also takes a lot of the pressure off of the situation. There’s no more feeling like you need to spend a lot to show people how much you love them, worrying about spending more or less than they spent on you, or looking "cheap" if you shop the sales.

Homemade Gifts

Gifts that you make need not be comprised of pipe cleaner, tissue paper, or painted macaroni. Most of us have some sort of creative side, and you’d be surprised by what you can create if you put that creative side to work. Some of my favorite gifts to make and receive have been family photo albums, quilts, custom-made place mats, crocheted blankets, custom-made CDs, hand-painted pottery, and cookies. Some gifts do take considerable time to create (especially en masse), but those who enjoy creating often find it a worthy trade-off.

Coupon Books

Creating a book-o'-favors for your loved ones, including good deeds especially for them, can be an incredibly thoughtful money saver. Coupons offering free babysitting to busy parents, airport trips to the frequent traveler, or a hand-delivered homemade meal to just about anyone can be a welcome and thoughtful gesture. (The possibilities are wide open when you create a coupon book for a spouse or child!) The key to making this one successful is to be sure to follow up and push people to actually use the coupons, or include a specific date on which they should be used, if possible.

Yummy Gifts

While cookies, brownies and bars tend to be gone within days, few faces fail to light up when presented with tasty treats. If the sugary stuff would be an unwelcome diet saboteur, you can always assemble a healthy fruit basket, wine and cheese basket, or come up with your own cheap-and-tasty basket idea.

Festive Meals and Outings

While it can be fun to rack up points on your credit card, you can save a chunk of your pay cheque by eating at home instead of going out to a restaurant. Make it a family event where everyone pitches in and is involved in the process. Maybe even break out some of your grandparents' recipes to see if they pass the test of time. If you do decide to dine out on the town, that’s completely fine, but just remember that you probably can’t afford to make every night a special occasion.  

As great as it is to see family and hang out together at the house, sometimes you need to take a breath of fresh air. For this reason, it pays dividends to browse the local newspaper or visit websites, to look into free events in your hometown. More often than not, you will be able to obtain free admission to museums, concerts and even movies during the holiday season.

Forget about the size or cost of your gifts, and instead focus on what makes this holiday season so enjoyable: the people around you. You'll enjoy yourself more, your bank account will thank you for it — and you'll be sure to have an enjoyable and affordable holiday season that will turn your "bah humbug" into a "ho, ho, ho" before you know it. 



11/08/2016 11:12am

Unlike Christmas, every event should be managed by maintaining budget, and that budget could be maintained by managing the main things and ignoring the things that are not necessarily required.


These tips are so useful! They will help me to create great Christmas budget.

08/24/2017 11:44pm

Thanks your post it really so helpful......

09/08/2017 7:03am

Thank you very much has been sharing this information,


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