Having a frugal Christmas budget is the best way to save money for the holidays. Here’s a step-by-step guide for how to create your own.
During the holidays, you’re supposed to focus on happiness, the spirit of giving and enjoying time with your family and friends. But, from gifts to decor to the parties and food, the Christmas season can really add up. You may find yourself thinking more about the financial strain instead.
Putting your finances in jeopardy with careless shopping is not smart. However, having a plan in place to control your expenses is. If you’ve been wondering how to do Christmas cheap or the best way to save money for the holidays, you’re in luck. Here’s a step-by-step way to create a frugal Christmas budget.
How To Create A Frugal Christmas Budget
1. Write Everything Down
Get a notebook or create a document in Microsoft Word or Excel. I personally prefer the digital method because it’s easy to add in items as you think about them and to categorize things on your list. You can also use this Christmas budget planner.
Write down every single item you will spend money on during the holidays. Use the list below as a guide:
- Christmas gifts – make sure you specify every person you want to buy a present for
- Christmas tree
- Decorations
- Food
- Travel
- Candy/ Other treats
- Photography
- Clothing
It may surprise you just how many items you purchase for Christmas.
2. Estimate Costs of Christmas Shopping
Make your way through your list and estimate the cost of each item on it or write down your spending limit.
3. Prioritize
Now that you have an idea of how much your Christmas shopping will cost, it’s time decide whether you are comfortable with that figure. On one hand, you might be happy with what you’ll be spending and can afford it. If that’s the case, great! Move on to the next step.
On the other hand, you might be shocked at the amount and, if you are, then it’s time to make some changes. Take a look at your list and choose all the items that are not important to you and your family. What can you cut out or scale back on?
Gifts might be a great place to start:
- Dedicate less money to spend on each person on your list. Find deals online or use coupons to save that extra cash. Use Ebates to do your Christmas shopping on a budget. You’ll get cash back for all of your qualifying purchases.
- Buy just one gift per child
- DIY gifts if you’re crafty
- Don’t buy gifts at all. When times got tough, my significant other and I did not exchange gifts. Instead we spent quality time together and had a blast creating memories instead of spending money we didn’t have on gifts the other person may not even like or use.
4. Track Expenses
You now know exactly how much you want to spend for the holidays. Whenever you shop, make sure to track your expenses. This is important when doing Christmas on a budget so don’t skip this step!
When you purchase an item on your shopping list, be sure to keep the receipt and track it on your Christmas budget planner sheet.
If you end up spending less than the dedicated amount, you can either add that to the total amount for something else or save it.
5. Start Early
One of my best Christmas budgeting tips is to plan ahead and start early. There are more opportunities to save money when shopping for items like gift wrap paper out-of-season and when you take advantage of sales like Cyber Monday.
If you’ll be making your own gifts, start earlier in the year. Doing this gives you plenty of time to find materials and create presents.
Creating your frugal Christmas budget early also allows you to save more money for the holidays. Each month, you can add a few dollars to a holiday savings account. By the end of the year, when you are ready to shop, you’ll have a nice amount of cash to use. This will certainly lessen the financial pressure and help you to avoid using credit cards.
Creating a budget for the holidays is smart and certainly beneficial to your financial well-being. Having a plan in place is the best way to save for Christmas. You’ll be better able to enjoy what the holidays are really all about—creating wonderful memories with family and friends.
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