Budgeting, My Finances, Uncategorized

Our Christmas budget strategy for saving

How to save during the holidays

Typically, our whole Christmas budget is around $500.  This year, our budget is a little smaller.  We weren’t able to make regular contributions to our holiday gift fund due to job instability and our house fire in the spring.  Our entire Christmas budget this year is about $300 .  That doesn’t seem like much, but we’re starting early and we have some tricks for making our budget stretch!

This is an outline of our Christmas budget strategy.  As we get closer to Christmas, I’ll keep you updated on how we are doing and give more details on some of our strategies.

Things we are NOT going to do

  • Change our regular budget (increase spending on toys, etc.)
  • Stop our normal savings and retirement contributions to spend on Christmas
  • Rack up expenses on credit cards
  • Buy big, trendy toys that the kids will lose interest in

Things we ARE going to do

Be realistic

I know that there are families out there that spend thousands of dollars every Christmas.  We are not that family – and it’s not just because of the money

Our budget is a little smaller than usual.  Even on a typical year, we never budget more than $500 for Christmas.  The exception is when we are traveling and need to include travel costs in our budget.

Why is our budget so small?  The first answer is that we are frugal and don’t spend beyond our means.  The second answer is that we honestly do not need thousands of dollars of gifts every year.  Neither do our kids.  We have limited space to store things. That means when we buy new things, we get rid of something to make room.  The more we buy, the more we have to get rid of.  I’m not a minimalist, I’m just being pragmatic.

I could write a whole post about how less is more with kids toys!  For now, I’ll just say that little kids do not need lots of busy, trendy, noisy toys.  The best money I’ve spent has been on quality toys that allow my children to play creatively.

Lastly, we keep the amount of gifts we buy to a minimum because we believe the real reason for Christmas is to be with family and to remember the birth of Christ.  I have found it’s easier for me to have a meaningful holiday when there is less commercialism involved.

Whatever your beliefs, be realistic about how much your family really needs.  This varies from family to family.  I suspect that Christmas with teenagers will unavoidably be more expensive.  Even so, will having the latest iPad really help your kids grow, increase your family bond, or make the holiday better?

An easy way to keep your gift giving in check is to stick to a simple list.  At our house, Santa usually brings something you want, something you need, something to wear, something to read.  That’s only four things, plus a few small items in the stocking!  It’s more than enough.  The kids each get one gift from mom, dad, and each other.  That’s three, plus whatever grandparents send.  Seven new things is more than enough to make the day special!

Create a set budget

Our Christmas budget includes anything Christmas-related – any decorations I want to purchase, Christmas cards, gifts for extended family and friends, Christmas tree, in addition to gifts for our own family.

When creating your budget, make a list of all your typical holiday expenses.  Don’t forget to include travel!  I wrote about keeping travel costs down here.  The only expenses I don’t list in my holiday budget are food.  Our food budget is usually higher in December, which we make up for by having a smaller budget in November and January.

Once you have your expenses listed, figure out how much money you have available.

We create our Christmas budget based off of what we have in our gift savings account, plus any other rewards we’ve saved over the year.  Our gift savings method is outlined here if you’re curious.  The gift savings account is where we save money for birthdays and other holidays like mothers day as well, so only a portion of it is allotted for Christmas.  We use credit cards with cash-back rewards all year long, and save the rewards for Christmas.

You might be expecting a big Christmas bonus, or hoping for a check from grandma and grandpa, but DON’T add those into your budget!  Only include money you already have available for Christmas right now.

Our Christmas budget

With our rewards and savings, we have a little over $300 set aside for Christmas.

Break down your budget across all your listed expenses.  Our Christmas budget looks something like this –

Tree – $50

Gifts for kids – $200 ($100 each)

Gifts for parents – $80

Gift exchange – $50 (our siblings draw names for gift giving each year.  We will buy gifts for two people – $20 each – plus shipping if we don’t buy it online- $10)

Friend gifts – $20

As I said before, we’ve had to cut down our budget this year.  For friend gifts this year, we will do baked goods and deliver on paper plates.  My husband and I aren’t doing gifts for each other, since we went as a couple to France last month and spent a little extra money there instead.

We are also skipping Christmas cards this year, but we have a cheap alternative that I’ll talk about later.  Our budget for parents is also smaller than we would like.  I have some creative ideas about that as well.

Hand-made gifts

This is something new that I am really excited to try this year!  I already mentioned that we are making baked goods to give to friends.  We are also going to hand-make cards with the kids instead of paying for family pictures and nice Christmas cards.

In addition, my husband and I made a goal to come in under-budget on the kid’s toys by hand-making several of our gifts for them this year.  We have $100 budgeted for each, but we are going to try to spend less than $75.  I have some really fun ideas for hand-made children’s gifts, and I’m going to write about that in the coming months.

We also have a tight budget for our parents, so I’m hoping to find something meaningful and useful we can make for each of our parents.  I’ll let you know how that goes!

As for all the supplies, and all the gifts we don’t make, we always, always put it on a credit card!

Put it all on a credit card

….then pay it off before it collects interest.  You can read all the details on why spending on credit cards is a good idea here, but in a nutshell, using a rewards card and treating it like a debit card can earn you cash back, travel points, and so on.  We never spend more than we have in the bank account, and we pay off our credit card every Sunday night at our weekly budget meeting.

We use our gift savings to pay off Christmas expenses.

Putting all our expenses on our credit card earns us even more rewards that we can use for Christmas, or we can save them for next year.  On years we travel, we rack up points on our southwest card to pay for flights.  If you’re traveling this Christmas, you can open a card with this link and earn 40,000 points.

Double-dip with rewards programs

In addition to getting rewards from credit cards, you can get points back when you shop online through a rebate site like swagbucks.  Points can be redeemed for giftcards.  I typically get amazon or Walmart gift cards.

I’m not a big online shopper – except at Christmas!  I probably buy 30-50% of our Christmas gifts online.  I never buy online without using a rebate link.  My husband uses ebates, but I think the rewards rates are better on swagbucks so that’s what I use.  I wrote more about how I use swagbucks to earn a little extra every month here, if you’re wondering how it works.  I’ve been using swagbucks to supplement my Christmas fund for almost five years, and I’ve earned anywhere from $50-200 in November and December to put towards my holiday expenses.

To earn, just sign up below, and when you shop, select your stores through their website.  Most major retailers are listed, from Walmart to Amazon to Old Navy.

You can get a $10 credit if you sign up for ebates here, or use this link to sign up for swagbucks an you’ll get 300 bonus swagbucks when you earn your first 300.

Black Friday shop

Black Friday is a double-edged sword.  I’ll write more about this another time, but any toys we don’t hand-make we watch for on Black Friday.  On that note….

Don’t buy as you go

I keep a running list all year of toys and games that I’ve noticed the kids like.  Around September, I go through the list and make note of the items I want to buy for Christmas.  Having a set list makes it easier to watch for good prices on the toys I know I want, and keeps me from making impulse buys.  If I do find something not on the list at a great price, I may still buy it, but I keep the receipt in case I change my mind.

Once an item is purchased, I hide it away in my little gift nook and then I write it down in my planner.  I do this for two reasons – first, it helps me keep track of how much I’ve purchased.  I have two boys, and everything has to be fair (eye roll), so I try to make sure they have the same number of gifts under the tree.  Second, it keeps me from going crazy.  My hiding place is out of site, so I can stack things in there without realizing how much I really have!  It’s easy to blow your budget out of the water when you are buying gifts every time you run to the store.  Keep a list and keep it under control.

When I mark it in my planner, I note the price and calculate how much I have left in my budget for each kid.  Then I know for my next shopping trip!

Buy decorations the day after Christmas

This is my favorite trick for making my Christmas budget go really far!

I never pay full-price for Christmas decorations.  One of my favorite Christmas traditions is going shopping the day after Christmas.  I use any money that is left in our budget and buy holiday craft items, wrapping paper, decorations, and gifts I can give next year.  Last year, I got fun foam stickers for the boys, a few beautiful candles that will be teacher gifts this year, some glass ornaments, and my favorite heavy wrapping paper!

My favorite stores to hit are Hobby Lobby, Joannes, and Target.  I usually skip Walmart because I don’t love Walmart quality, but if you need Christmas lights or other basics, it’s a great stop.

You can do it!

Decreasing your Christmas budget might seem painful, but with a little creativity, you can save thousands of dollars and still have a great holiday.  Keeping your spending under control can make the holidays, and the months after, more enjoyable for everyone.  Do you have any tried-and-true methods for saving at Christmas time?  Let me know in the comments!


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How to budget for Christmas

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