Ah, December. The season of holiday parties, family togetherness, and gratitude for Jesus coming to save us all. These are the blessings of the month.
But there is another side of the last month of the year.
There is stress, both emotional and financial, as you feel obligated to do more than the limited number of hours in your day allows and as you may feel the need to spend more than you have to avoid disappointing people. However, with a few simple strategies, you can bring joy back to the holiday season and maintain your budget.
more than you can afford based on what you think they will give you.
One year, my husband and I, just newlyweds and broke, bought what we could afford for my family. However, once we saw all of the presents my mom got us, we worried that we hadn’t gotten enough. We were out buying more presents on December 24th. Imagine how sick we felt the next day when we realized half of the presents my mom had gotten for us were items she had purchased at the dollar store just to make it look like she had gotten us many presents. We spent three months paying off those last-minute gifts we purchased when we were playing the comparison game. Don’t make the mistake we did.
It’s easy to get wrapped up in the Christmas frenzy. Instead of doing so, stick to your financial plan and enjoy the season rather than giving into the emotional and financial stress.
How do you stick to your budget during the holiday season?
For many of us Christmas is one of happiest times of year.
We celebrate the birth of Jesus Christ, and the wonder of His birth.
It’s a magical time of year for the kids, but for adults, it can become one of the most expensive.
According to the American Research Group, Inc, families planned to spend an average of $983 for gifts in the 2017 holiday season. That’s almost $1000!
Shoppers around the country say they are planning to spend an average of $983 for gifts this 2017 holiday season, up from $929 last year according to the 33rd annual survey on holiday spending from the American Research Group, Inc. Planned gift spending for 2017 is $54 above spending in 2016.
Instead of being part of that trend, this year it might be a good idea to plan ahead, save for the gifts you are going to buy.
Get creative about the gifts, decorations and activities you engage in – in order to make your Christmas a bit more frugal and meaningful. It’s time for a frugal DIY Christmas!
Join me and Tom Drake of the Maple Money Podcast as we talk about having a frugal Christmas!
a Christmas budget!
So how much should you spend on Christmas gifts?
One rule of thumb that I’ve read says that you should never spend more than 1 week’s salary for your Christmas gifts.
So if you’re making $50,000, for example, divide that by 52 and you shouldn’t be spending more than $950 on Christmas gifts.
Honestly, unless you have an extremely large family that you have to buy gifts for, I think even that is probably too much. I’d probably cut that number in half, making it about $500 for the average family. Think about $100 per person. If times are tough in a given year, cut it back to $50-60 or less if need be.
Whatever number you decide on, add a line item to your family’s budget, and start saving for that expense.
At our house we use You Need A Budget and Tiller Money to keep track of our finances, and we have added a line item in our budget for “gifts”.
Setting Up Automated Transfers
Once you’ve got a budget set, and a line item added to your software, how should you save?
You can either just setup some automated transfers to your savings account that happen throughout the year, or if you want to try something a little more fun you can use an automated savings app to regularly make small incremental transfers into a savings account, so that by the end of the year you have enough saved to pay for Christmas.
Banks and apps that can automate saving for a goal:
We use or have used a combination of the following banks over the years to automate our savings.
- Chime Bank: This bank account will allow you to setup automated transfers, and roundup your purchases to put in savings. Get this free account and then use the roundups for your Christmas gifts!
- Qapital: This account will allow you to save based on just about any trigger you want, from rounding up spending, scheduled transfers, to saving every time your favorite team wins a football game.
- Dobot: A free account that will allow you to save to a goal based savings account. Either let the app choose how much to save, or set a scheduled amount to save. Add to your savings regularly and at the end of the year you’ll have enough for gifts!
- Capital One 360: We have several accounts with Capital One 360 where we setup goal based accounts. One account for taxes, one account for Christmas gifts, and one for the new patio we’re planning on building.
So get a savings account that allows you to automate saving money, create a savings goal, and setup your accounts to save automatically.
Then at the end of the year you’ll be ready to buy your gifts, with cash in hand!
Ways To Save On Christmas Gifts
There are things you can do to cut back on how much you spend on gifts. Be more frugal with your Christmas gifts!
- Shop at a bricks and mortar store: The American Research Group, Inc, found that people who shop online for Christmas gifts end up spending on average 9% more than those who shop at brick and mortar stores. So do your shopping at the stores, and be willing to shop around for the best price!
- Shop earlier in the year: They also found that people who start their shopping earlier in the year, even as late as November, tend to spend quite a bit less than those who shop in December. Do one better, wait until after Christmas this year, and buy a bunch of gifts when they’re on clearance. Then save them and gift them the following year!
- Stack your discounts: Don’t forget to save money when shopping by using cash back sites (Rakuten, Swagbucks), coupons and coupon codes (Honey Extension), and shopping when things are on sale or at the best price. Stack the discounts you get through all those things to save the most!
Don’t think the spirit of Christmas is about “stuff.” You can have a giving spirit without having a negative checking account. Don’t forget the reason for the season. – Dave Ramsey
With all that said, there are a lot of frugal gifts that you can put together that will be a big hit. You don’t have to spend a ton to give a great gift!
Frugal DIY Christmas Gifts
At our house, we like to give gifts that help to create a shared experience, that help to strengthen a relationship, or that acknowledges a person’s personal tastes. I’ll list a few of the types of gifts we like to give, that don’t cost an arm and a leg.
Christmas Gift Packs & Themed Baskets
We love to give this type of gift because you don’t have to necessarily buy a big ticket item, but you can bundle several smaller ticket items into a nice package that someone will still really enjoy.
- Put together themed gift baskets with inexpensive items: One year I gave a movie night gift basket with a recent movie, some movie candy, popcorn and a popcorn bucket. Relatively inexpensive and fun!
- Book and movie packs: Buy someone a movie, and the book the movie is based on!
- Home baked goods: Homemade bread, pastries, cookies and more are almost always appreciated.
- Outdoorsman gift pack: Put together a gift pack with a Leatherman Micra, a pair of choppers, and an aluminum water bottle (or your choice of other outdoor gear)
- Craft Kit: Put together a crafting kit with things like markers, glitter, scissors, clay, crayons, glue, paper, etc.
Personalized Christmas Gifts
Personalized gifts are great because they are personal, they show that you’ve been thinking of that person individually. They can be personalized either with the person’s name or initials, personalized by giving a nod to something that person likes, or by giving a nod to memories that are shared with that person.
- A memory jar: One year someone in the family asked everyone to write their favorite memory with a person, and then put them all on slips of paper in a jar. When the person wanted to they could pull out the jar and read a treasured memory.
- Hand make something: One year my wife made blankets for people, choosing the fabric based on a favored sports team or interest. Relatively inexpensive, but people loved them!
- Decorated handprint plate: one year my son and I made a decorated handprint plate for my wife. She loved it, and it provided a memory she cherishes.
- Personalized calendar with you and the gift recipient: Take a bunch of photos of you and the gift recipient together, and create a personal calendar.
- A memory photo book: Pull together photos of the gift recipient over the years on big trips, family gatherings, and more – and then print a photo book from Shutterfly or another service.
- All of my favorite things gift: Buy a person’s favorite things and package them together. Favorite candy, favorite food, favorite artist’s CD, etc.
Christmas Gifts To Create Community
We love to give gifts that will help to create a sense of community in the family, or that will give us things to do together.
- Board games: buy a board game, a gift that gets the family together and keeps on giving all year long! Even better, if you can find some board games at garage sales or on ebay, create a themed game night gift basket (see above)!
- Tickets to an event for you both: Buy tickets to a play or other local event. My grandfather used to take the grandchildren to see the Nutcracker Suite every year!
- Books to read at bedtime: Give a set of books to read at bedtime – creating time to spend with your child.
- An annual “letter to you” book: My wife and her godmother do this every year where one of them originally gave a gift of a leatherbound journal, and they then take turns writing a letter to the other person talking about what’s going on in their lives. They’ve been doing it for years.
DIY Christmas Gifts
When it comes to gifts that you make yourself, finding ideas is as simple as heading on over to Pinterest. Pinterest has a myriad of different things that you can make that people would love to get, just do a search for “DIY Christmas gift” or something similar.
Here are some Christmas gifts you can make yourself that anyone would love to get.
- Write a monthly letter to a friend: In this day and age of instant communication, take the time to write a friend a monthly letter – giving them the first one at Christmas. Be as creative as you want – but make it fun for the giftee!
- Make some baked goods: Are you known for your amazing chocolate chip cookies? Bake some and give them as gifts at Christmas!
- Create a DIY cookbook of family recipes: If your family is known for cooking, put together a nice family recipe book. There are a bunch of sites that can create a nice spiral bound cookbook for low cost.
- DIY weekly family menu board: Make a family menu board a frame with a glass front, patterned scrapbook paper, dry erase markers and a sharpie.
- Bath bombs: Make bath bombs, like these DIY peppermint bath bombs made using baking soda, citric acid, essential oil, carrier oil, and a silicone mold.
- Make a custom DIY key hook: Make a customized key hook to hang by the door.
- Make ceramic photo coasters: These ceramic photo coasters can be made relatively inexpensively using 4×4 white tiles from lowe’s, some 3.5×5 photos and some clear acrylic spray.
- Glowing photo luminaries: Get a glass jar, vase or other glass container from the dollar store. Print some of your favorite photos on velum, and make a photo luminary. Very cool.
- Custom gold design coffee mug: Buy a cheap plain white ceramic coffee mug at the dollar store, spray a design or letters in gold paint and clear sealer for ceramic, and you’ve got a cool custom gold coffee mug!
- Reindeer beer: Get a 6 pack of your family member’s favorite beer or soft drink, and then add a red nose, googly eyes and antlers made from brown pipe cleaners. I’d love this in a Guinness reindeer please!
- DIY coffee mug holder: With a few wood scraps and a few brass hooks you can create a cool coffee mug tree.
- Framed picture – with family or the giftee: Buy a nice looking frame at a thrift store, and have a photo printed to insert into it.
Frugal DIY Christmas Decorations
If you’re like the Griswolds in National Lampoon’s Christmas Vacation you could find yourself spending hundreds on Christmas lights and other decorations. You don’t have to spend that much, however, to have a festive holiday. Forgo the expensive store bought decorations, and have some fun making your own with stuff you have around the house!
Here are links to a few DIY Christmas decorations that you can make yourself to save a little bit of money on decorating!
- Hand and footprint reindeer Christmas craft: This cute reindeer wall hanger made by the kids will be sure to bring up fond memories for years to come.
- Dollar store Christmas trees: Make cute Christmas tree decorations for under $5 using things you can find at the dollar store. Examples include spoon Christmas trees, ornament trees, garland trees and peppermint candy trees!
- DIY letter wreaths: Use fresh rosemary, wire hangers, pliers, wire cutters and floral wire to create cool looking Christmas letters to hang on your wall. Create whatever word you want!
- Iced branches: Create whimsical iced branches using tree branches, tacky glue, colorfill diamond vase filler. They look very cool!
- Tin can snowman: Use 3 empty tin cans (of varying sizes), some paint, buttons, a hot glue gun and twigs to create these cute snowman decorations.
- Glass jar centerpiece: Take a large glass bowl or jar and add some pine cones, holiday themed ornaments, leaves and berries, ribbons and other embellishments. The result is a beautiful Holiday themed centerpiece!
Have your own ideas for frugal DIY Christmas decorations? Tell us about it in the comments!
Frugal Christmas Activities
Christmas doesn’t have to be all about the gifts or decorations. Really the most important thing at Christmas is to be spending time with our loved ones, enjoying each other’s company and building new memories.
Here are a few frugal Christmas activities your family can do together this holiday season, beyond smiling, to have a little cheap family fun!
- Going sledding: We used to go sledding at a big park near our house. One particularly steep hill was called “Suicide Hill” because it was so dangerous. We had a lot of fun!
- Christmas light viewing: Just about every year my family maps out a route, piles into the car and then drives around our area to see large Christmas light displays. One display near our house is sponsored and has a tent up where families can get free hot chocolate and make a Christmas craft! Use Christmas Light Finder to map your route!
- Building gingerbread houses: At our house we’ve always made the gingerbread houses using graham crackers. It’s a ton of fun! Just try not to eat too much of the frosting and candy decorations!
- Caroling: My family sings and plays instruments, so some years we would walk around a local nursing home to sing for the residents. They really appreciated it, and it was fun!
- Read Christmas stories and drink hot cocoa by the fire: Snuggle up by the fire, grab a Christmas cookie and some cocoa, and lay back for a fun winter tale!
- Make Christmas cookies: We all have fond memories of sneaking off to steal one of Grandma’s Christmas cookies that were cooling on the stove. Make some new memories making cookies with your family.
- Have a Christmas movie watching party: Watch old favorites like White Christmas, How the Grinch Stole Christmas, Elf or Miracle on 34th Street. Make some white chocolate Christmas popcorn to eat while you watch!
- Make Christmas pizzas!: Make a snowman pizza, a Christmas holiday wreath or a Christmas tree pizza!
- Make a “What do you want for Christmas” video: Ask everyone what they want for Christmas this year, and watch last year’s video of the same question.
- Do an annual Christmas picture – in the same spot – everyone standing in the same position: Take an annual Christmas picture with the family – in the same spot, in the same outfits, or something along those lines. Compare photos over the years.
- Volunteer together at a local charity: Our family likes to volunteer at a charity called Feed My Starving Children where we pack meals for needy kids. It’s a lot of fun, and you’re giving back at the same time!
- Put on a concert, or a play: Get all of the members of the family that want to participate, especially kids, and put on a simple play for Christmas!
- Pack a shoebox for operation christmas child: Set aside some time and supplies in order to pack a shoebox for Operation Christmas Child. Give a child in need a Merry Christmas!
Celebrate Christ’s Birth, And Spend Time With Family This Christmas
Christmas in American culture can quickly become very commercial, with it becoming more about the toys, decorations and gifts, and less about the important things – like faith and family.
While it’s great to celebrate the day, and partake in holiday traditions, don’t let the busyness and consumerism of the season rob your joy in the true meaning of Christmas.
Have your own holiday traditions, frugal gifts or decorations that you care to share? Leave a comment!
Several years ago, 2010 to be exact, my husband and I made our final payment on our debt. We were officially debt free!!
It felt amazing. We had done it through a lot of hard work and sacrifice. We had done all we could to save so we could throw loads of money at our debt.
A few months later the holidays rolled around. Now, one may think that we went crazy to celebrate, but we didn’t.
We still set a budget. We saved. But the funny thing is that it allowed us to splurge too!
Our family had worked together to pay off our bills. We had sacrificed dining out. We had not taken vacations.
I clipped coupons. My husband and I sold items.
It was a lot of sacrifice but it was very well worth it. We had achieved our goal.
And, we wanted to celebrate.
We decided to have a little extra fun that first Christmas. And, being smart about it allowed us to do what we wanted.
LESS CAN BE MORE
We told our kids that they would only get 2 presents under the tree from Mom and Dad. That allowed us to spend a bit more on the big-ticket item on Christmas.
They did not miss opening more presents. In fact, they did not even notice there was less there.
GIVE THE PRACTICAL
Some of the gifts that we gave to our kids and one another were things that were needed. There were pajamas under the tree and a new coat from grandma.
Putting the focus on adding more gifts by including needed items allowed more from the holiday budget to be spent on the fun things!
SAVE ALL YEAR LONG
Once our debt was paid-in-full, we had a bit more money left over each month. We did not spend it. We put it into savings.
For example, our car payment ran a bit over $300 a month. We did not up our food spending or go out to dinner. Instead, we paid ourselves.
And, we also continued with our savings methods at the store. We used the same budget methods applied to get out of debt. But, rather than send money to creditors, we paid ourselves.
We were able to save hundreds every single month. Then, when the holidays came, we had a bit more money to spend to get the extra things we wanted.
USE YOUR BUDGET
Your budget is still necessary for the holidays. You need to make sure. You follow it. Budget for the big-ticket items and find a way to make the numbers work.
That is exactly what we did as well. We had our budget. We knew we wanted to buy our kids a video game system that was around $200.
That was a big amount for a single item for them. We simply adjusted some of our spending and also found less expensive items to go along with the game platform.
Whatever you do, never spend more than you have in the bank or saved. Never go into debt to pay for the holidays.
REMEMBER THE REASON FOR THE SEASON
It is easy to get swept in the “stuff” when it comes to the holidays. But, that is not what matters.
Family and friends are what to focus on. If you can’t do the splurge – then don’t. Your kids or spouse will love you no matter what.
What they need most is to know you are there for them and that you have that chance to be together and celebrate the warmth of the season.
Focus on traditions. That may mean matching PJs the night before, reading the “Christmas Story” before bed, or having Kung Pao chicken for lunch on Christmas day.
The holidays are about more than splurging and spending money. Never forget that.
The holidays are just around the corner. While you may not yet be decorating your house or buying gifts, there is one thing you need to do – plan your Christmas budget, and teach your kids about it as you do!
Why a budget for the holidays?
Having a holiday budget ensures you don’t go crazy overspending and end up regretting it. It is easy to try to ignore your limits to get someone that one gift you know they’ll love.
But, the truth is you don’t want to do that for two reasons: 1) you can’t afford to and 2) your children are watching.
Do kids need a Christmas budget, too?
Kids are sponges. They see and absorb everything around them.
Chances are you’ve experienced it first-hand by hearing your child repeat an inappropriate word or phrase. (Or, maybe that is just me 😉 ).
You teach your children everything they need to know from how to eat, to tying their shoes, to driving. As a parent, you also make sure they learn how to manage money.
The holidays provide a great learning opportunity to teach our kids how to budget their money.
Helping your kids create their budget is pretty simple. And, having a roadmap to know what to spend is going to help ensure they too, know exactly where they are spending and don’t spend too much of their own (or your) money.
Create a Christmas gift list
No. Not a list for your kids to write down what they want. They need to create a list of those people they want to buy gifts for this year.
Tell them to include everyone they want; teachers, coaches, family, and friends. Don’t leave anyone off the list.
Assign gift costs
The next step is to ask your kids how much they want to spend on each person they listed. Don’t tell them any limits at this point. Let them do what they wish.
Total the spending
Once the list is done, calculate the total so they can see how much money they will spend.
At this moment, there is a good chance your child’s eyes will get wide or their jaw falls open with shock. They may even shed some tears.
Let them know that you aren’t done. You are getting started.
Figure out how much the kids have to spend for Christmas
Now that they see what they want to do, share with them how much they should spend.
That may mean an overall limit of $50 this year for all gifts. Only you and your child know how much they should be willing to spend on presents.
Make budget adjustments
Once they know how much they have available to spend, they will need to do one of three things:
1. Reduce the spending per gift
2. Change the gift to a “free” item
3. Remove people from the list
First, have them look at the amount they wanted to spend on each gift. Have them lower the amount per person to see if they can reduce the total amount spent to all within their limits.
If they can do that – great! They are done.
However, if they are still over the budget, they may want to try another option – change them from buying a gift to something else.
If you plan to do any type of holiday baking, maybe they can do that instead. Bake bread or cookies for a coach. Even a handmade card is a gift a teacher would love rather than 20 “apple-themed” gifts.
The final thing they may need to do is reduce the number of people on the list. It may be tough but kids will see that we can’t always do everything we want.
While we may want to buy gifts for 20 people, the budget simply does not allow for that. Kids need to understand this concept.
Applying your family’s Christmas budget
Once you have the budget in place, the next step will be putting it into practice. The simplest way to do this with kids is with cash envelopes.
Review the list with your child. Have them write the name of each person on the list on an envelope.
Then, add the amount they have to spend for that person into each. When they go to the store to shop, they will be able to see how much they can spend on each person by looking in the envelope.
If they have $20 and the gift is $19.84, you will have to remind them that they have sales tax to pay so they have to find something that costs less.
You need to use a budget for the holidays – your kids should, too!
Here are the 5 steps you need to take to stop yourself from overspending on Christmas gifts
The excitement, the gingerbread latte is now kicking in … the click-clack of your shoes racing down Target’s floor tiles… as you frantically snatch the must-have toy of the season off the shelf, clutching it possessively to your chest!
As you round the corner trying to get back to the main aisle, you can’t believe your eyes; you haven’t seen this Magnolia item in stock in FOREVER! In your shopping cart it goes! Off to checkout, and you slooooow way down going by the girl’s section, and think, “That’s super cute! My little one would love that!” It too goes in the cart!
An hour later, and your phone bings at you. Yup, it’s a large purchase amount alert from your credit card. It reads, “Did you spend $358.42 at Target? This amount is over your alert limit notification settings”.
And just like in The Christmas Story, you say (in slow motion for dramatic effect) “Oh FUDGE!”
You totally overspent! Again! You told yourself you weren’t going to overspend on Christmas presents again! (like ever!) Last year’s holiday credit card bill left you with hives, and you promised yourself that this next year would be different!
Well, guess what, that Target scenario up above… it was just a dream. Just like Ebenezer, there is time for you to change your ways. You’re not doomed to follow the same path you did last year! So if you’re ready, let’s dive into how to stop overspending at Christmas!
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What is the Christmas Debt Hangover?
Ugh! No one likes a hangover! But unlike a hangover from too much bubbly, a Christmas debt hangover can last months and months (sometimes years)! No thanks!
According to a MagnifyMoney survey, “Americans took on an average of $1,325 of holiday debt in 2019”. Here’s how their numbers played out…
- 44% of consumers took on debt this holiday season, and the majority (57%) didn’t plan on doing so.
- 78% of those with holiday debt won’t be able to pay it off come January, including 15% who are only making minimum payments.
- 58% of indebted consumers are stressed about their holiday debt.
- 40% plan to consolidate debt and/or shop around for a good balance transfer interest rate, but more than half won’t even try. Of those that won’t try, 20% think it’s not necessary, and 18% don’t want to deal with another bank.
Now specifically regarding how long it would take them to pay off the debt, survey responders said…
- 22% said one month
- 21% said two months
- 19% said three months
- 8% said four months
- 16% said 5+ months
- 15% are paying only minimum payments
Right now, The Fed Reserve lists the average credit card interest rate to be 14.52%. You can generally assume that your minimum payment will be about 2% of your total bill. Here’s a screenshot of how long it would take to pay off the card (if you didn’t put any more purchases on it).
64 months? Paying $582 in interest? W.T.F.!
Are you ready to tame your shopping spree beast? Because, after looking at those numbers, overspending at Christmas is not cool!
How to stop overspending on Christmas presents: Step One – decide what you will focus on besides the gifts!
It’s just smart sense that when you take something away, you need to replace it with something else. Instead of a donut, have a whole grain muffin!
So instead of focusing on gifts, what do you want to spend the season focused on? I’ve got a great list of frugal family fun ideas for the holidays! These are bucket list items perfect for the holiday season!
You’re especially going to need something fun to do Christmas morning, as you don’t want the day to be anticlimactic without all the presents, as it might be hard on our littlest ones. Think about…
- Doing a Meals on Wheels delivery route in your neighborhood.
- Go caroling.
- Do a Christmas movie marathon (pj’s required!).
- Make a full holiday meal together as a family.
- Go sledding/skiing/ice skating or go to the mountains for snow time fun! Don’t forget the hot cocoa and accessories for the snowman you’ll build!
Step Two – Consider a gifting strategy
Every good General knows that you need a plan of attack or a strategy, shall we say. And if you don’t think Christmas shopping is kind of like preparing for battle, then hats off to your peaceful and serene holidays of the past. The rest of us battle-weary moms can barely nod in agreement (as we’re still a little shell shocked from last year’s holiday season).
Strategy One – Adopt the 4 Gift Rule
This one is amazing in its simplicity to help you stop overspending on Christmas gifts! It caters to those toying with the idea of having a minimalist(ish) holiday, and it’s gaining popularity every year! You gift each recipient (that you would typically buy lots for) just four gifts.
- Something to wear
- Something to read
- Something they need
- Something they want
I’d like to think of it as a way to buy a more meaningful selection of gifts. As you’re looking not just to buy lots of things, but purchase specific items. Hopefully, the receivers will appreciate their gifts a little more and not get lost in the craze of ripping off wrapping paper at the speed of light.
Don’t forget to snag your printable gift list tracker; there’s a four gift rule one and then a classic gift list printable. Everything you need to stay organized and on budget!
Strategy Two – Give the gift of an experience
Maybe your kids have everything that they need! Maybe you are dreading anything more coming into your home as you need to get your Home Edit on right now!
If that’s the case, then consider giving an experience instead. This could be a short trip to the beach or a big trip to Walt Disney World. Or tickets to a sporting game or an event like Comic-Con. Go as big or as small as you like. Set aside the Christmas money and put it in a sinking fund to make this experience come true (even if it’s at a later date).
Hint: if it’s a trip to a theme park, some have vacation planning DVDs or online videos (DisneyWorld does). This would be a great thing to wrap and put under the tree!
Strategy Three – Go the D.I.Y. route
Now, this isn’t for those of us that are all thumbs (meeee!) I am not a crafter/knitter/artist/DIYer by nature. But for those of you that are, consider harnessing your talent for homemade gifts!
Even if you don’t have a talent, maybe consider gifting a custom photo book from Shutterfly. Or collect great grandmothers family recipes together and turn them into a little book (or place her most famous recipe on a tea towel! Cute huh!)
That’s right, as your mother always said, it pays to plan ahead! That means getting your Christmas present shopping done early! As the holiday gets closer, we tend to panic slightly; we grab just about anything that will do as a good gift. Most of the time that means we’re spending a little more (because we don’t want to get a cheapo lame gift)!
So start jotting down your gift choices now! Aka ASAP! I.e., immediately!
Okay, you get the drift. Besides, online ordering gets bigger every year, and sometimes there are shipping delays or snowstorms that stop service in half the country (yikes!) You don’t want to get a substitute gift because your original gift won’t be back in stock until January 17th!
Step Four – Use Cash
They say cash is king, and they’re right! Especially when it comes to spending money. Because when the cash is out, the spending is done! It’s genius at its most basic, and it works every time (as long as you leave your credit cards at home). You simply cannot overspend on Christmas gifts!
Using cash envelopes is a strategy used by many successful budgeters! Besides, stuffing these cute festive holiday cash envelopes is fun! You can use one for each person you’re gifting to or use one for each holiday shopping category—I.e., food, decorations, gifting, fun times, supplies, etc.
Nerdwallet references a cult classic report where, “An often-cited study is one conducted by Dun & Bradstreet, in which the company found that people spend 12%-18% more when using credit cards instead of cash.”
Don’t forget that when you pay with cash, you won’t have to pay interest on the charge either! Look at it this way; when you pay cash, you’re buying something. When you pay with a credit card, you’re borrowing the money for it; you didn’t buy it (but you’ll pay extra for it in interest!)
Step Five – Don’t go into the stores!
This one sounds silly, I know, but it’s so painfully obvious. If you don’t have to go into a store, then don’t! Because really, we’ve all gone into a store, we don’t grab a cart because we just need one thing, and we come up to the cashier juggling items like a clown!
Inevitably when you go into a store, it’s straight temptation. Why do that to yourself? Stay home, and send someone else to the store, or better yet, do some online ordering for that item you need!
Or if you’re poison is the 1-click buy, then take some super easy preventative measures. Delete your credit card info on your devices! GASP! I know, I know, it sounds drastic, but making it just the teensiest bit harder on yourself to shop online could mean saving hundreds! Because honestly, sometimes I don’t get up to walk across the house to grab my credit card number!
Better yet, do a marketing edit! Unsubscribe from those pesky emails from your favorite retailers and unfollow them on social media! You won’t want what you never see! Now, I know you’ve been thinking about this idea for a while, give it a try! You can always go back later and subscribe again!
Simple hacks to stop overspending on Christmas presents
Know your prices
Do you know the regular price of the “sale” item in your hand? Even though it says it’s on sale or discounted 20% off, it might still not be a great price! If you are 100% in on saving money this holiday season, then you should scout your gifts early, record their prices, and wait to see what the “holiday deals” actually are.
Many retailers change their prices regularly. What was $59 in September could easily now be $75 in December. Yet now they can mark it being 20% off! They get to keep their sales margin high enough to get a good profit, and you (the customer) feel like you got a good deal. Winner Winner… oh wait, that’s a bull$hit dinner!
Be smarter than the retailer!
Don’t go shopping when…
- You are hungry
- You’re short on time
- With somebody else (friends can be bad influences, sorry friends)
- It’s going to be super crowded (instead go early in the morning, or late at night)
Next years plan for Christmas gifting
If you get through this Christmas and going low key on gifts wasn’t for your family, then no problem. You can have the Christmas that your family wants; you may need to start socking away money for it a bit earlier than usual! Check out How to Start a Christmas Savings Plan and How to Plan the Perfect Christmas Budget!
At the end of the day
I know that reading about how to not overspend at Christmas sounds like a bummer of a topic. But honestly, think about how you’ll feel come January when you don’t have that big fat credit card bill that’s knocking out your wallet like it’s Balboa in Rocky 1!
I know that for many of us, we remember Christmases of youth, with mountains of presents, and we want to recreate those warm fuzzy memories for our own kids. But those warm fuzzy feelings can be created out of so many instances, not just present opening. So save yourself the agony and angst of overspending at Christmas, and don’t even go there!
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INSIDE: Christmas shopping can easily get out of hand. Learn how to set a Christmas budget so you can make it a great one without doing into debt.
You need a budget, especially at Christmas. Here’s how to set a Christmas budget for your family that works!
To set a Christmas budget, decide what you can afford to spend this Christmas
Knowing how to set a Christmas budget comes down to what you can comfortably afford. How much money do you make per month? Now subtract all your expenses? How much is left over? How much of the leftovers do you feel comfortable putting towards gifts?
There’s no magic number for exactly how much you should spend on Christmas. Each family has a different budget and different circumstances. But, be reasonable. Don’t go into debt in order to buy gifts.
Once you’ve come up with a number that is right for you, write it down and stick to it. If you want to buy a family member something special but it’s over budget, then either wait for it to go on sale or come up with a new plan. And don’t be so hard on yourself.
Avoid falling for the “perfect Christmas myth.” Your kids will be okay if they don’t get every single thing on their list. Don’t go over budget because you’re trying to make the holidays perfect. And it’s never a bad idea to teach your kids about a holiday budget.
If your budget is lower than you want it to be, consider ways you can make more money for Christmas.
Our best tips for staying on budget this Christmas
In order to set a Christmas budget and stick with it, try these tips…
Keep gift-giving simple
When it comes to my extended family we’ve been doing Secret Santa style gift swaps for years. Not only does this reduce the amount of money that you need to spend, but it also reduces the stress of trying to come up with a thoughtful gift for every uncle and cousin that you only see twice a year.
Make a list and stick to it
Once you’ve decided on a gift-giving strategy then you’ll know exactly who to need to buy gifts for. Create a list of names and determine how much you can budget for each person. Based on your list you can start brainstorming gifts that align with your budget.
Give experiences, not things
If you’re having trouble deciding what to give people for Christmas remember, give experiences, not things. Experiences are more meaningful then things and the memories you create from a good experience can truly last a lifetime. Passes to a museum, amusement park, or a gift card to a fantastic restaurant are great gift ideas.
How to save money on Christmas gifts to stay on budget
Between gift-giving and holiday entertaining, Christmas can get expensive. That’s why you set a Christmas budget to begin with. But, in addition, here are some gift-giving tips to help you stay on budget:
Follow the four gift rule
When it comes to the act of gift-giving, keep it simple. There are a ton of super fun gift-giving strategies that allow you to celebrate the tradition of giving without spending a fortune. My kids are still young but we’ve started practicing the four gift rule which is:
- Something you want
- Something you need
- Something you’ll wear
- Something you’ll read
This is a great strategy to help keep you on budget while shopping for Christmas gifts.
Give a gift card
Yes, you can argue that a gift card doesn’t qualify as a super thoughtful or meaningful gift. All I know is that I would prefer a gift card over an ugly sweater or smelly candle. Also, gift cards are a great way to stay on budget. All you have to do is pick an amount, or assign an amount that fits your budget. No waiting for a sale and no overspending necessary.
Give a homemade gift for Christmas
Are you super artistic, an excellent baker, or a woodworking genius? Then consider giving a homemade gift to help you save money and stick to your Christmas budget.
There’s a reason why online marketplaces like Etsy are so popular. It’s because there’s a demand for beautiful homemade products. However, if the extent of your creativity involves a glue stick, macaroni, and glitter then perhaps this is not the budget-saving tip for you!
Advantages of shopping for Christmas all year
If you’re a planner, this strategy could work for you. Although it’s strange to start to think about Christmas shopping in March or April, there are a lot of advantages when it comes to Christmas shopping all year, as opposed to saving it all for November or December. So, start celebrating Christmas in July and reap some of the financial and emotional benefits.
If you can wrap your head around the idea of shopping for Christmas gifts all year long then there are quite a few major advantages to doing it this way:
It’s easier to stick to your Christmas budget
Can you even imagine the Christmas holidays without last-minute panic shopping? Even if you set a Christmas budget, it can easily get blown away when that happens.
When you break up your Christmas shopping over several months or even an entire year, you can make a plan. You can shop for items when you know they’re on sale, and you can take some time to save for things before making a purchase. This can help you avoid going into a ton of debt at Christmas time.
According to a report by Statista titled, “U.S. Christmas Season,” the average American expects to spend $846 on Christmas gifts. If this seems accurate for you, then divide this by twelve months and you can set a ballpark budget of $70.50 per month.
Early shopping means you can avoid the crowds
While 64% of U.S. consumers purchase gifts online, many of us also find ourselves in a mall during the holidays. And, in my personal opinion, there is nothing worse than a crowded mall at Christmas. Everyone seems to be grumpy, in a rush, and deplete of holiday cheer. No thank you.
It can result in more thoughtful Christmas gifts
When you have a list of people you need to buy gifts for and months to do it you can take the time to come up with more thoughtful gifts. This is opposed to the regular last-minute shopping sprees where you are trying to think of something, anything that would make a decent present for your nephew or second cousin.
It can make the holidays less stressful
Wouldn’t it be nice to have some time to relax around the holidays? How would it feel to sit down with a warm coffee or a nice glass of wine on December 23rd instead of searching for last-minute Christmas gifts in a crowded store?
When you shop for Christmas all year round, you don’t need to be at the mall searching for a parking spot with everyone else. You can take some time to relax and really get into the holiday spirit.
You can go into the new year on a financial high note
It’s all fun and games in December but January can be a real bummer if you overspend during the holidays. When you shop for Christmas gifts all year, you can start January on a high note and focus on achieving all of your New Year’s resolutions rather than waiting for your scary holiday credit card bill.
Don’t forget to budget for each family member’s Christmas gift
If you like the idea of shopping for Christmas gifts throughout the year, then it’s a good idea to still set a Christmas budget. Just as you can overspend during the last-minute Christmas rush, you can also overspend on Christmas when you’re shopping throughout the year if you don’t have a plan.
Remember what Christmas is really about
This Christmas give yourself the gift of more time, less stress, and less debt by shopping for holiday gifts all year long! This strategy will give you the ability to focus on the things that really make the holidays special — the people, the traditions, and the memories!
And that brings us to Christmas dinner! Discover how to create a budget for Christmas dinner too!
–By Jessica Martel
The packages have been opened. The kids are loving their new toys. You are enjoying your coffee one morning and reading your mail when you see them…
THE BILLS! Yikes!
It seems you went a little over your budget. It was fun and the joy you brought to your kids’ faces was worth it.
However, now you need to find a way to recover from overspending during the holidays. It is not fun, but is necessary. Here are nine steps you can take to recover from any spending mistakes you made during the holiday shopping season.
1. Put the credit cards on ice – literally
The first thing you need to do is stop spending. You need to put the credit cards away. Take them out of your wallet and put them in the safe.
Or, if you want to make sure you really do not use them – freeze them in a block of ice! That way, if you do feel the pull to shop, it will take time to thaw out and the urge to spend my pass by then.
2. Calculate the damage
You can’t bury your head in the sand when it comes to seeing the damage done to your budget. Face it head-on.
Total every receipt and credit card statement to find how much was spent. While it may be painful to see the balance due, it is necessary.
When you see that figure in writing, it helps you know what you are facing and where you may need to cut back.
3. Review the budget
Once you know the amount you need to pay off you also need to review (or create) your monthly budget. That means including those new monthly payments to the credit card companies.
Make sure your budget is balanced, in that you are not spending more than you take in each month.
4. Create a repayment plan
Up next, you have to create an exit strategy – which will be to pay off those credit card bills. Grab the statements for each and then list them by including the balance and the interest rate.
You may be tempted to pay the highest balance first (which is what I recommend when it comess to getting out of debt). However, when it comes to this debt you just incurred, I recommend starting with the highest interest rate first.
By eliminating that bill quickly, you are reducing the amount of interest you will pay to the credit card company. There is no need to pay them any more than you need to!
Once the first card is paid in full, roll the monthly payment amount into the payment for the next card. Repeat until they are all paid in full.
You’ll not only pay them off quickly but also minimize the total interest paid as well!
5. Reduce your spending
When you have bills to pay it means you need look at the budget to find areas where you can cut back.
It may mean cutting cable or eliminating dining out. You may need to cancel the subscription to the gym or find frugal date night options.
Be willing to make short-term sacrifices for long-term gains as the sooner you can eliminate these bills, the better.
6. Use your bonuses
If you are fortunate enough to get a holiday bonus don’t blow it on what you want. Use that to pay off your holiday bills.
If you don’t get a bonus then use any of that Christmas cash you received for your bills! Look ahead to see if any other money will be coming your way such as birthday money or a tax refund. Earmark that to pay off your holiday spending.
7. Get a side-hustle
If you need to tackle your balances then a side-hustle may be the solution – even if temporary. Look around the house for items to sell. If you are a teacher, consider tutoring students.
Every penny earned can be money used to put towards that holiday spending.
8. Build your savings
You don’t want to find yourself in this same situation again next year. It is not a fun cycle of rinse and repeat.
The holidays come at the same time each year. It is not a surprise or an unplanned expense. You need to plan for it.
Review the total spent this year and divide that by 12. Focus on saving that amount each month, all year long, and you’ll be able to pay CASH next year and not even use the credit cards.
9. Save using the coin challenge
One simple way to save money for holiday shopping is to switch to a cash budget. Then, save the change and any “leftover” money each pay period.
For example, if you budget $300 for groceries and spend only $270, don’t blow that left-over $30…put it back for the holidays!
The same premise works with change. If the total is $7.49, hand over $8 and put $0.51 into your savings jar.
Saving doesn’t have to be hard
Simple tricks can help you quickly build your savings!
It is easy to spend too much during the holidays but with some smart strategies, you can get your budget back on track.