How to Celebrate Christmas on a Budget

Wrapped Christmas boxes and graphic for Christmas on a budget

Christmas on a budget. What are some ways we can spend less and save money this Christmas?

There are 5 simple things you can do to cut costs and make sure this year is still one you will look back on fondly.  You will need to:

  • know your budget
  • make a list
  • evaluate your current traditions
  • come up with budget friendly alternatives
  • look for ways to save

Don’t worry, we’ll get to the details of how to do each of those things below.

Maybe you’ve encountered job loss, increased expenses or are working hard to reach some financial goals.

Whatever the reason, you are looking for ways to enjoy celebrating Christmas with your family (our kids still want to have fun after all) but do it on as little money as possible.

Yes, it might take some sacrifices and thinking outside the box.

Your family’s traditions might not happen in the standard way, but you can still celebrate the season and enjoy creating (frugal) memories with your family.

How to Celebrate Christmas on a Budget

Know your budget

It’s really important to know how much you have to spend. That will help you make the decisions you need to in the following step.

You know your finances and what amount, if anything, you have set aside for Christmas.

If you really have no extra money, see what you can come up with and use that money as your budget.

Maybe spend less on groceries or go on a spending freeze and apply what you save to Christmas. You could also find ways to earn extra money.

If you already have money set aside, you have your budget. You will just need to make sure you stick with it as you decide what to do.

Make a list

Second, sit down with your spouse (just the two of you to begin with, add the kids in a little later). You could even turn it into a little at home date night with hot drinks and homemade popcorn or cookies.

Write down all the things you normally do over the Christmas season and on Christmas day.

Think of things such as:

  • normal travel plans
  • visiting family
  • Christmas tree
  • presents (include everyone you normally buy for)
  • holiday baking
  • holiday parties
  • Christmas Day/Eve food
  • outings

Every tradition that you normally do. If you know it, include the approximate cost next to each item.  

Now that you have your list, move on to the third step of celebrating Christmas on a budget.

Evaluate your Christmas traditions

Take that list you just made and now go over it and evaluate each of the items

You need to determine how important everything on your list is.

Are you willing to eliminate it this year? Is it something you could adapt and change to make more affordable? What will work with the money you have?

Let’s look at a few examples from the above list:

-If you go to a farm and cut a live Christmas tree, would it be okay to skip that this year (if not, maybe cut a very small tree)?

-Consider cutting back on Christmas presents. Or even telling family you won’t be able to make it to all of the festivities this year and that you will be celebrating a simple Christmas with just your immediate family instead.

-Instead of the dozens of holiday treats you normally make, have each person in your family select one.

I can’t tell you what to do here. It will look different for every family.

One year, we didn’t get a tree. We’ve done years with very budget friendly presents. We’ve skipped holiday outings that have cost money.

You will need to look over everything on your list and decide what areas your family is willing to cut back on.

After you have done this initial work to conquering Christmas on a budget, this is where you will want to bring your kids into the process. Either for finalizing this step or as you move into step 4.

Come up with budget friendly alternatives

Next you will come up with cheap alternatives – some of these might become new traditions because they are so well loved!

Don’t just take away everything your kids (and you) look forward to about the holiday season. Replace it with something else and give it a positive spin when you present the ideas to your children.

It’s okay to explain to your children that money is tight so things might look a little different, but remind them that it is okay because you are still going to work together to make this a special Christmas.

[This post has a great list of frugal things to do on Christmas day!]

-Maybe this year you will replace your prime rib dinner with everyone making their own personal pizzas!

-Draw names for gift giving instead of purchasing for everyone. (Or do something like this Saran Wrap Christmas Ball Game)

-Go out and find a Charlie Brown Christmas tree.

-Instead of whatever paid Christmas outings you normally go on, try a family Christmas light scavenger hunt and make hot chocolate at home to bring with you. (Here’s another link for a printable scavenger hunt with pictures for younger kids.)

-If you decide to not travel to see family Christmas day, check out this post for cheap, fun things you can do on Christmas Day!

Get creative! Let your kids think outside of the box.

[For 11 tips on Christmas Presents On a Budget, be sure to check out this post!]

Look for ways to save

One final tip. Look at which things you are going to be doing and see if you can find ways to save money on at least some of them.

Below are some ideas to get you thinking:

-Wait to buy the baking supplies you need until they are on sale (and they almost all do go on sale over the holidays).

-If you decided to still buy gifts for your kids or any others, keep your eyes open year round for presents. You might find the perfect gifts on clearance.  Don’t discount Facebook Marketplace for buying like new items that you know your kids would love and would otherwise be out of the budget.

-Watch for discount days (often shared about on social media) or Groupons for any paid outings you have decided to go on.

-Pack your own meals for road trips instead of eating out.

Don’t discount small savings. When money is tight, those little things really do add up.

Know your budget. Make a list. Evaluate your traditions. Come up with budget friendly alternatives. Look for ways to save.

These tips will help you conquer Christmas on a budget this year and I think you will actually find yourself enjoying the memories you make.

What other suggestions do you have to celebrate Christmas on a budget?

Christmas cookies and a tablet that says Merry Christmas! How to celebrate Christmas on a budget.

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