Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
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It can be really easy to get carried away during the holidays. Our lists of who to buy for never seem to get smaller and gifts aren’t getting any cheaper.
In other words, Christmas can be incredibly expensive.
Your ability to stay on budget for Christmas is important though. Blowing up your Christmas budget will not only effect your stress levels during the holidays, but it can add a debt burden for months to come if you’re not careful.
You should avoid both of these this holiday season.
So, if you’re trying to figure out the best way to avoid Christmas debt this year, or you want to actually stay within your budget for once, here are 20 tips that will help you have a frugal Christmas.
20 Frugal Christmas Ideas
This list will be broken down into three categories to help you organizes what steps to take when to have a frugal Christmas. These categories are preparing for Christmas, making more money, and spending less money.
Preparing For Christmas
One of the biggest problems we have during the holidays is trying to shove our gift giving into one month’s budget without any forethought or planning. Preparing for Christmas in advance can help ease that burden and give you the space you need to handle Christmas spending well.
1 Do a Christmas Money Challenge
There are many different money challenges, or ways to turn saving money into a game. Most of these can easily be adapted into a Christmas saving tool.
If you want to have $1,000 saved by December 25, then you only need to save $84 from each monthly paycheck, or $39 from each bi-weekly paycheck. That is incredibly doable.
But to turn it into a game all you need is a score chart, various amounts to save, and an incentive for meeting your savings goals.
If a year long slog to save $1,000 sounds like too much consider breaking your spending goal up in 3 or 4 month chunks instead.
This can be a powerful way to have extra money in your pocket come December.
2 Have a Spending Limit
In general you should be tracking your spending, it is just a good financial practice for everyone. But, you should especially track your Christmas spending in December.
Every time you spend on Christmas put it into a Christmas category on your budget. Update how much total you’ve spent often.
Once you’ve reached a pre-determined limit, stop spending. If you think you need something else then return something you’ve already bought.
Discipline your self to stay in your budget.
3 Have a Christmas Checking Account
If staying within your budget is proving difficult, then remove your emotional self from the equation. Try putting the amount you have to spend in an entirely separate checking account with its own debit card.
Use that debit card, and only that debit card, for all of your holiday shopping. Then, when you run out of funds in that account, you’re done. Simple as that.
4 Shop Early in the Month
This may seem like odd advice up front, but let me explain. When you finish your holiday shopping early in the month then you know how much you’ve spent and you can influence the rest of your budget to not overspend.
On top of that, you can adjust by returning gifts, have more time for items to ship, and deal with less crazy people in the stores. It is a win-win-win-win.
So shop as soon as you can to avoid breaking the whole budget for Christmas shopping.
5 Shop Previous Holiday Sales
Some people know what they want for Christmas (or what they want to give someone for Christmas) months in advance. If you know what you’re getting for someone then why not start shopping early?
You have Halloween sales, Labor day sales, Fourth of July sales, etc. all leading up to the holiday season. So if something you wanted to buy anyway drops to a price you are more than willing to pay, then go for it.
This has the added bonus of spreading out your holiday shopping over a number of months which makes it easier to handle on the budget.
6 Have a Family Gift Rotation
If you come a from a large family like I do it is just too costly to buy everyone a gift. I’m the youngest of eight. That’s seven gifts for siblings, plus two for parents, times $20 and I’ve already spent hundreds of dollars. Now add in their spouses and it just becomes a nightmare.
So instead of trying to figure out who to give a gift to, or how you can cut back this year, suggest a family gift giving rotation. Draw names from a hat at Thanksgiving (or about a month before Christmas) and give to that one person.
To make it really easy draw names once then have a set rotation after that.
If you’re nervous about suggesting this remember that everyone is just as anxious about affording Christmas as you are, so don’t sweat it. They’ll be glad you suggested it.
7 Have Your Older Kids Work For It
Little kids are easy to shop for. They’ll be happy with almost anything. But it seems like older children start to have more expensive tastes which can really blow the budget.
So if you find your teenager asking for the newest game box (game station?) and the price tag makes you flinch, cut a deal with them. Either they need to work to get half the money, or they do a certain number of additional chores around the house for awhile. Whatever works for you.
Having them work for it will not only help your budget and/or peace of mind, but it will also help them appreciate the gift and be more likely to use it.
Make More Money
Sometimes, you can only do so much before you just don’t have any money left. So if you find that you just need some more cash, consider a few ideas to get it.
8 Look For Free Money
No I don’t mean search your couch for loose change. There are a lot of financial institutions that have holiday bonuses when you sign up.
For example, one bank I know is giving you $250 for setting up a direct deposit with them. I got a $100 Amazon gift card this year for opening a credit card.
Finding free money can do a lot to dent your Christmas spending.
9 Get Seasonal Work
The beautiful thing about this time of year is that there is a flurry of activity that requires extra work, but only for a month or two. So if you don’t want to commit to a part-time job, but need some cash, look into seasonal work.
Help deliver packages, do gift wrapping, work for a tree lot, do snow removal, just a seasonal job that will pay a few bucks.
10 Get Overtime Or A Side Gig
If you have a job that allows over time, offer to take as much as you can. You not only get paid extra, but a lot of people are taking time off this time of year so there is a lot of opportunity.
If your job doesn’t do overtime, consider a side gig. Can you drive for Uber or Lyft, sell a service door to door, offer to clean houses after the Christmas party?
There are so many options these days, all you have to do is go for it.
Preparing for your spending and making some more money are helpful, but really we want to know how to spend less money on Christmas without feeling like a dirt bag. So here are some ideas to reduce your spending on Christmas.
11 Buy the Previous Model
In the world of electronics it is easy to fall into the trap of wanting the latest and greatest gizmo. We’ve all done it.
But the previous generation item is usually almost as capable and orders of magnitude less expensive.
For example, an iPhone 12 is $699 this year while you can find an iPhone X for closer to $400. Their capability is almost identical for an average joe, and you’ll save $300.
The newest hot item usually isn’t worth the price you’re paying for it.
12 Shop The Clearance Rack
Most large stores have a clearance rack. Stuff they just couldn’t sell enough of that now they just want to get rid of.
You can often find some pretty cool toys, tools, and gadgets on these racks. Just check them often when you go to the store and you’ll be surprised at how much you can check off your list doing that.
13 Shop Second Hand
Thrift stores and garage sales (which you can attend in advance during the summer) are great places to find some incredible gifts.
A lot of more expensive items like LEGOs or tools can be found lightly used for a discount.
Just clean it up, package it nice and it will be great.
Swing by the thrift store whenever you happen to be near one in the months leading up to the holidays. But only buy what is on your list!
14 Give Things You Already Need
It can be really tempting to buy everything on someone’s want list, but honestly opening the gifts is more exciting than the gift itself. So if you need to buy something for someone anyway, consider wrapping it up.
We’ve all gotten socks or pajamas for Christmas. Those are great gifts and quite useful.
I need a tool for a project, my wife can wrap it up for me and now I have another gift.
My wife needs a new essential oil, I can order it and wrap it up as a gift to her.
You still can have fun and show love this way without breaking the bank.
15 Buy Holiday Themed Items For Next Year After Christmas
When the holidays end everything holiday themed goes on sale. To save on next Christmas buy those items now.
Wrapping paper, disposable plates, ornaments, lights, or decorations. Heck you can even buy holiday Ziploc bags and hand soap on the cheap to use the rest of the year.
Those post-Christmas clearance racks are a great way to save some extra money.
16 Wrap Items Individually
Often people focus on how many gifts they get. This probably isn’t right, but there is something naturally human about it. To help make someone feel special with a lot of gifts, consider breaking a set apart into multiple pieces.
My mom was the queen at this. As a young kid when I asked for two brownies instead of one she’d cut my brownie in half and so I’d have two.
The same thing applied with gifts. One year I received a game console. The controllers were in a separate wrapping so I got two gifts out of the deal.
Doing the same thing helps you give a lot without paying a lot more.
17 Give Delayed Gifts
Instead of buying gifts in advance, you can give gifts in the future.
This might seem like a cheap trick, but hear me out.
If you are extremely strapped for cash in December just remember that a lot of Christmas items go on sale shortly after Christmas. So waiting can save money by itself.
And, if you can hold off until January that will spread your spending out onto another month’s budget helping you stay in bounds.
But the great thing is that you can give the gift of anticipation. If your teenager is looking forward to a new movie, wrap up a coupon to the midnight premier of that film and you have a gift.
You get the idea. The whole point here is to spread the spending out to different months.
18 Give Service Coupons
Speaking of giving coupons, you can use that same idea for other gifts as well.
Sometimes the greatest gift is the gift of our time. So write up a coupon for a long walk in the woods, or a massage, or a game of hide and seek (depending on who you’re giving it to) and the receiver can pull that out anytime.
The only key to that is you have to be willing to do that thing whenever they use the coupon.
Just remember that you need to make sure the coupon is properly disposed of so you don’t have the same coupon used on you multiple times. Not that I’ve done that….
19 Do Pre-Christmas Exchanges For Gifts
We all have that stuff which is actually quite cool but we never use. Some times it is even unopened. Mine is a fondue pot. Those are ideal items to do an exchange with.
If you have some stuff that you don’t need, but it is still nice, and your friends also have some stuff to exchange, why not get together and swap things around. Make it a potluck. Play some games. Have fun.
At the end you all get great gifts to give and you’ve had a great time. Please note this is not a white elephant gift exchange, but an open exchange where you show everyone what you have and you trade.
This works especially well for kids toys. And you might as well throw kids clothes in while you’re at it. We all know they grow so fast that buying clothes is practically useless.
20 Re-gift to Small Children
Young kids are a bit clueless when it comes to Christmas. That’s part of the fun and the magic of it. But it can also be used to bring them great joy while keeping your wallet full.
If you have some unused toys sitting in a box, consider pulling them out and wrapping them for the young kids to open. An old toy in a box might have been lame, but the same toy in wrapping paper is amazing.
Don’t break the bank for young kids. They won’t remember and they’ll be just as happy either way.
Have A Merry Frugal Christmas
Even though holidays are supposed to be light hearted and fun, we all know that they can be incredibly stressful.
Don’t add the stress of breaking your budget and going into debt into the mix.
You don’t have to use all of these tips. In fact, using all of them would be a little crazy.
Just choose one to three tips that suits you and do it. If those work consider doing a couple more next year.
Find out where you are comfortable giving while keeping your wallet full.
And have a Merry Frugal Christmas.
What are some ways that you save money at Christmas? How have you gotten out of Christmas debt? Tell me about it in the comments below.
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