How to Make A Christmas Budget that Makes your Holidays Jingle with Joy

My Christmas Budget - Six Saving Tips to Make Your Holidays Jingle with Joy

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Are you wondering how to set up a Christmas Budget for Gift Giving? We’ll share that and some other tips for saving on gift-giving so that your holidays will Jingle with Joy.

Christmas is coming, and it seems to get here faster and faster each year. And for many families what accompanies the approach of the holiday is the accumulation of lots of presents and . . . lots of bills or credit card debt.

Is there a way to break the cycle of obligatory gift-giving and the weight of January’s debt regret?

Our Christmas Budget Doesn’t Include A lot of Gifts

Sixty-six percent of Americans who shop for Christmas gifts report that they usually go over their budgets.

On average, they end up spending $116 more than they planned.

78 percent of parents of younger children go over budget by more than $125 on gifts for Christmas, while 58 percent of non-parents overspend by about $100.

How to Stay within a Budget for Christmas

For more than 30 years we’ve celebrated Christmas with kids (and now grandkids) and have found several ways to make Christmas magical for them while keeping it staying within our predetermined gift budget.

One of our most foundational principles when it comes to spending money is to only spend what we have set aside for this specific expense.

It may seem restrictive, but by living within that limit we’ve been able to fulfill most of our kids’ expectations and a few awesome, unexpected delights.

It’s not because we’ve spent outrageous amounts of money. We have, however, invested a good amount of time, thought and a bit of creativity to live out our conviction.

Here are six things we do to make our holidays jingle with joy for us and our family and to stick within (our) My Christmas Budget!

Setting up Our Christmas Budget for the Year

Gift Budget Worksheet

We set a target dollar amount that we spend for each person we buy gifts for. But because we shop all year long, we’re able to lavish them with a larger number of gifts without spending a large amount of cash.

This is because we can usually find things steeply discounted or we use credit/points accumulated through Swagbucks (sign up for Swagbucks here and get a $ bonus) or at our favorite consignment stores. (You can read our review of Swagbucks program here).

While setting and spending a flat dollar amount (like $50) might be easier, being able to give lots of presents for the same amount is more rewarding. And our kids certainly enjoy opening lots of presents.

Our interactive Gift Budget worksheet is available from our Etsy Store and also to anyone who purchases our America’s Cheapest Family Budget System. This form is available as a .pdf and an interactive Excel (Google Sheets) spreadsheet. Learn more about it below.

How We Make Extra Cash for the Holidays

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Sample Calculations for a Christmas Budget and Gifts for a Year

Years ago we created this Gift Budget worksheet. While it may sound a little materialistic, we used that worksheet to help us establish a spending amount per family. We also used it for everyone that we wanted to buy a present for around the holidays.

Here’s a sample of how we broke down the calculations. Of course, your numbers will be different based on your income and your gift-giving priorities.

  • Presents for kids $30 x 5 = $150
  • Parent Presents $30 x 4 = $120
  • Presents for Weddings and Showers 2 x $20 = $40
  • Baby Shower Presents 2 x $15 – $30
  • Spouse Christmas Presents 2 x $50 + $100
  • Kids Birthday Presents 5 x $20 = $100
  • Spouse Birthday Presents 2 x $30 = $60
  • Teacher and Coach Gifts 5 x $10 + $100

Total Sample Gift Budget = $700. If you divide this number by twelve you’d need to save about $60 each month to fully fund this budget.

And if you did set aside this money, either in cash in an envelope or in a budget account in our America’s Cheapest Family Budget System, you would have the freedom to shop all year long for birthday and Christmas gifts.

And you wouldn’t have any crushing credit card bills or massive overspending in December and January.

We not only included Christmas gifts but also included birthdays and amounts for wedding and shower gifts, baby showers, and teacher gifts. We pick an annual amount and break it down for what we need to save with each paycheck. Saving throughout the year has allowed us to give gifts without worrying about overspending.

There are 2 ways you can get a copy of the Gift Budget Worksheet:

1. Buy it from our Etsy Store – MoneySmart Printables

2. Purchase our America’s Cheapest Family Budget System

1) Be like Santa and make a list of who You’ll Buy Gifts For

Make a list of those you’re going to buy presents for. As you make the list, set a dollar amount for each person (Spouse / Kids / Parents / Relatives / Service People). We know this sounds kind of harsh, but this is an important step in setting up a framework gift budget. Once you’ve made your list and added dollar amounts to is, total the amount and this will become your gift budget.

Here’s the fun part: See how many great presents you can bag for your budgeted amount or less.

We created this dollar amount/gift budget many years ago for our family. We divided the annual total by 24 (we deposit money into our budget system 2 times each month). And then we set aside this modest amount of money, twice each month, for purchasing gifts all year long.

This amount has been enough to buy all of the presents for birthdays, holidays, weddings and baby showers that we buy each year. Of course, the amount you set aside for gifts will probably be different, but give it a try – it really creates financial freedom.

2) Make A List Of The Gifts You Want to Purchase

Make a gift list for each person that you’ll be buying for and start checking online stores / local stores/newspaper ads / even Craigslist / OfferUp and SwipSwap (you’ll even find some new items on these shopping platforms). Enlist the help of your spouse or older kids to track down harder to find items. Don’t forget to scope out consignment and thrift stores – you’ll be amazed at the selections and the amazing prices. The more time you have for this step, the less you’ll spend and the better bargains you’ll find.

3) Use Unused Gift Card Balances to Buy Presents

Pay for holiday gift purchases with Gift Card balances. More than $1 billion in gift cards goes unused each year. Most people have 4 or 5 gift cards with a balance left on them. Even if your gift card just has a couple of dollars on it, that’s a savings that you didn’t have before and it’s less money out of your pocket.

Another option is to buy gift cards at a discount and give them as gifts. Or you can also sell unwanted gift cards and cards that you’ll use at a discount of up to 30% Off at!

If you’re looking for other gift card tricks, you get extra rewards by purchasing them from a grocery store that gives you multiplied gas points. Kroger stores usually run a 4x gas points on weekends for gift card purchases in December, so a $25 gift card will earn you a savings of 10 cents off per gallon.

4) Clean out your couch

Check under the seats of your car and grab any loose coins out of your washing machine. The average family has between $20 and $50 worth of change in their house – put your coins to good use this year.

You can trade in your coins at CoinStar for eCertificates (no fee charged)— there are lots of gift card options to choose from. Or you can get free coin rolls from your bank and roll your coins while you’re watching a movie. Our kids were great at helping us roll coins. Plus, some banks now have coin-counting machines and there is no fee for this service. Check with your bank to see if they offer this service and what their restrictions are for accepting coin rolls (if any).

Related Article: Retail Arbitrage: How to Make a Living Bargain Hunting

5) Does A Christmas Budget include Re-gifting?

Shh, you’ve got to keep this quiet. What do you do when you or the kids receive gifts that are . . . just not your kind of thing? First, we try to return or exchange the item for something more desirable. If we can’t do that, then (you guessed it) it goes to the gift closet—held for the day when it can leave the “island of misfit toys” and find a grateful recipient.

When we store a re-gifting item, we always mark it with the giver’s name to avoid potentially embarrassing possibilities. Over time, we’re likely to find someone who is a perfect match for that gift.

6) Are New Gifts The Ultimate or is Used Okay?

When we appeared on the Today show just before Christmas we talked with Ann Curry about our Christmas shopping habits. Annette said, “You’ve got to focus on changing the perspective. It’s not always new, it’s not always expensive that says I love you.” She’s so right. Does a used book or movie communicate a different message? Do new toys look brand new, two days after you give them to a child? Do good quality and good condition used clothes keep you any less warm or covered? Your Christmas Budget or My Christmas budget could thrive with this new attitude about used items as gifts!

Consider Purchasing Used Items as Gifts

Our family has grown and flourished and we’ve totally enjoyed lots of used things that we purchased for a fraction of the original price. So are used gifts okay or do they cause emotional problems with kids? We’ve only seen the upside of giving used presents.

The Amazing Christmas Tent

A memorable Christmas Present. Teen age boy curled up inside of a small sample camping tent.

Like the time Annette found a sample miniature camping tent at a thrift store – it was about 24” tall. Our kids fell in love with it. She immediately thought of getting it for Christmas but didn’t want the kids to know. So she very cleverly shuttled the kids to a different part of the store, gave an employee the keys to our van and asked that he quickly put the tent in the back of the van where the kids wouldn’t see it. Later when they were leaving the store the kids noticed that the tent was missing. They were heartbroken – Annette told them that “Probably someone snatched it up while we were in another part of the store.” That night, the kids told Steve that, “Someone really rich must have bought that tent right from under our noses! We didn’t even see them do it!”

Fast forward about 4 months to Christmas morning when the kids came out of their rooms – the tent was in the middle of the family room for all to see – they went crazy with joy.

And the funny thing is they all played with that tent for years. When they were little – Barbies and GI Joes would occupy it. And sometimes the kids would even crawl inside. Years later, remembering his childhood, teenage son Joe tried the fit inside again . . . he almost did it too! That tent is still stored in our house, waiting for the grandkids to be old enough to enjoy it!

My Christmas Budget - Six Saving Tips to Make Your Holidays Jingle with Joy

Christmas doesn’t have to be new and shiny to be bright and cheerful!

My Christmas Budget and gift giving should be joyful occasions. If you apply some of the ideas we shared in this brief article your holidays will be jingling with joy and your bank account will do the same.

Budgeting Help

If you want a tool to help you create a gift budget, we include an interactive Gift Budget worksheet in our America’s Cheapest Family Budget Kit.

We have more Christmas Gift Giving tips in our article Having a Magical Christmas on a Small Budget.

If you need some Christmas Craft and Decor Ideas, click here!

If you have a tip or trick that you use to keep your holiday spending under control, please leave it below – we love learning from you.

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