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Christmas on a Budget: 14 Ways to Save Money this Christmas

Christmas on a Budget: 14 Ways to Save Money this Christmas

Christmas is right around the corner, are you prepared? It can be tough to make sure that you have what you need for everyone on your list, and it can also be expensive.

If you want to avoid breaking the bank this holiday season, I’ve come up with 14 tips to help you save money on holiday spending. But first, let’s start by making a budget.

Make a Budget

If you don’t have a plan for Christmas spending, things can quickly get out of control. That’s why you should always begin the season by making a budget, and then sticking to it. I recommend that you create a list of spending categories, and assign a dollar figure to each one. Here are some examples:

  • Christmas gifts, including gift exchanges
  • Christmas dinner grocery bill
  • Grocery bill for other parties or potlucks
  • Wrapping paper, packaging, tape, etc.
  • Shipping costs for gifts being mailed away
  • Charitable donations
  • Restaurants, dining out
  • Christmas tree, decorations
  • Seasonal activities, family outings
  • Holiday clothing, i.e., that Onesie, or ugly Christmas sweater.

Once you’ve assigned a spending amount to each category, if you’re feeling as though you are over budget, take a look through each category to see if there are places where you can cut back, or find cheaper alternatives.

The following tips for doing Christmas on a budget should help:

1. Purchase Inexpensive Stocking Stuffers

Stocking stuffers are a great way to round out your gift-giving, and you don’t have to spend much. Save money by filling stockings with dollar store gadgets, candies, nuts, and mandarin oranges. Puzzle books and magazines make for interesting and affordable stocking stuffers also.

2. Fill Stockings with Free Product Samples

Why stop at low cost when you can stuff stockings for free? If you have a bunch of samples on hand, you can use them to top up a few Christmas stockings. They also work great in gift baskets, if you have many different types of samples that you can give.

3. Consider Using an Artificial Tree

This one may be controversial among Christmas tree purists, but over time, an artificial tree is the more economical choice. There is an upfront cost, but a $200 tree that lasts 8-10 years will save you money in the long run. Pro tip: if you wait until after Christmas to purchase an artificial tree, the big box stores will have them on clearance, and you’ll be ready to go for next year.

4. Set Up a Gift Exchange

As your siblings grow up, get married, and have children, your Christmas shopping list will undoubtedly get longer and more expensive. You can cut down on shopping for the extended family by setting up a gift exchange. Draw names, and each person buys for the one person whose name they drew. Also, setting a price limit can keep expenses down. Everyone gets a gift while saving potentially hundreds of dollars, an all round win-win that can be a lot of fun.

5. Make Homemade Gifts

Not only are homemade gifts thoughtful, but they are usually pretty inexpensive as well. It’s fairly easy to make baked goods like cookies and squares, then use pretty packaging to wrap them up.

6. Stock up on baking supplies

Speaking of baked goods, you can save money by taking advantage of the sales on baking supplies in November and December. Not just for Christmas, but you can stock up for the year ahead since this is when baking supplies are the cheapest. Doing this saves cash on the things you use all year-round, but only sell for such low prices around Christmas time.

7. Buy Gifts Throughout the Year

You have to be pretty organized to do this, including having a list of gift ideas ready, but it can be a big money and time saver. I am always looking for Christmas gifts all year round. By doing this, I can buy gifts when they go on sale and then just put them away until the big day. If you see something on sale in March, pick up the item and then put it away until Christmas. You will have to account for the year-round spending in your Christmas budget, which takes some careful planning.

8. Shop for Christmas on Black Friday

Every year, Black Friday falls on the Friday after American Thanksgiving, near the end of November. This is when you’ll find some of the best shopping deals of the year. If you don’t mind waiting for a few weeks before Christmas, you can save big by planning to shop on Black Friday. I do recommend that you prepare your shopping list in advance to avoid succumbing to an impulse purchase.

9. Shop Online on Cyber Monday

In recent years, Cyber Monday has become known as the Black Friday for online shopping. It falls on the Monday following Black Friday and often extends the Black Friday deals for online shoppers. Not only can you find sales online, but there are plenty of sites offering free shipping on Cyber Monday. Of course, you can save time and money by shopping online throughout the year, too.

10. Say No to Extended Warranties

During the holiday shopping frenzy, it’s hard to make decisions, and easy to say yes to whatever someone suggests. However, you need to be on your guard if you want to save money. Avoid extended warranties on your purchases. If an item is defective, it’s likely to have issues within the standard warranty time frame. Don’t spend extra money on coverage you probably won’t need.

11. Save When You Spend with a CashBack App

Websites like Rakuten allow you to earn cash back when you link to your favourite online stores through their website. You can earn up to 30% cash back on purchases from top retailers such as Amazon, Best Buy, Cabella’s, Sephora, Walmart, and more. Also, mobile apps like Drop sync to your debit and credit cards, and automatically credit you with cash back when you pay with your card. Check out the best cash back apps, and start saving today.

12. Keep Your Gift Receipts

One of my favourite Christmas tips is to make sure that you keep all your receipts in a safe place since items may be broken or clothes might not fit. While some stores will accept returns without a receipt, it will be at whatever their lowest price has been on that item, so you might not get full value for it.

You will also need your receipt if you want to make a claim using your credit card. Many credit cards offer extended warranties and protection against theft or returns. If the store doesn’t take it back, you might be able to get money through your credit card perks — but you’ll need the receipt.

With the right planning and a little savvy, you can save money on Christmas shopping every year and get the right gift for each person on your list.

13. Take Advantage of Boxing Week Sales

This is a great way to do Christmas on a budget. The trick is to “predict” what you might want to give your loved ones next Christmas by shopping for their gifts right after this Christmas.

The reason to do this is that you can save a lot of money. Sometimes you can get up to 90% off various gift products during this period. It’s also the perfect time to stock up on next year’s wrapping paper and decorations.

14. Set Up Video Calls with Family and Friends.

If there’s one thing COVID-19 has taught us, it’s new ways to connect with family and friends who we cannot visit in person. Whether you use Zoom, Facetime, or Google Meet, you’ll enjoy Christmas that much more by setting up video calls with family and friends who live far away, and it won’t cost you a penny. Is there a better way to make this Christmas feel more special?

Plan Now for Next Christmas

There you have it, 14 tips for doing Christmas on a budget, but there is one more; start saving now for next Christmas. When this Christmas is over, you’ll have a good idea of what your budget is going to be for next year. Take that amount, and break it down into a monthly or bi-weekly figure.

For example, let’s say your Christmas budget is $1000, and you get paid every two weeks. If you put $40 into a Christmas fund every time you get paid, your Christmas budget will be fully funded when December rolls around.


  1. Jeff

    Good list of ways to save. I like number 3 the gift exchange. Here’s something my family does for Christmas-

    There are way too many people in the family to buy presents for, so we do a “White Elephant.” Each adult brings one $15 gift to the party. All the gifts are wrapped and placed in the middle of the room. Numbers are drawn from a hat to establish the order of the draft. Number 1 goes first and so on. This is a very fun and entertaining way to give gifts.

  2. Financial Samurai

    Tom, just curious if you have a budget for Christmas this year, and if so, what is it?

    • Tom Drake

      FS, For immediate family we spend $50, can’t fairly change that since they also spend $50 on us. The wife and I have spent over $500 on each other in the past, this year we’re going to do $50 as well.

  3. Cap

    Solid tips. Personally, I save a butt-load by having very little friends (haha) and limit the gift buying to my mom only. But in all seriousness, the warranty is a good tip.. during holiday seasons, the sales guys will work extra hard to push warranties on gift buyers so their special someone can have that extra “peace of mind.” Meh to that.

  4. Perry Peck

    In these troubled times any gift that saves money is very welcome especially the ones that show love for the person and the soul things that don’t cost a thing things that you make.

  5. Anne from

    Some very good tips there. Interesting that 10% of gift certificates are never redeemed! I tend to give online gift certificates because that means no shipping costs (and also because I’m a last minute shopper 😉 )

  6. James

    Good comments. A comment/question I would make would be what sorts of gifts can you give that might actually increase someones bottom line?

    Most of what people get, at least here in the states, is mostly knic-nacks or cheap stuff thats going to break down or fall apart.

  7. Stephen

    I think the best way to save money when shopping for Christmas is to use online coupon codes, or printable coupons to get money off your purchases, it doesn’t take long to look for them and they can save you a bundle, you just have to stop looking if you can’t find one after 5 minutes. Thanks for the other tips 🙂

  8. Matt Cover

    Ooh this can be one of the most expensive times for many families. I am a believer of not got overboard at Christmas and establishing an agreement of how much to spend with each family member and friends to ensure the day is happy for all.

  9. JG Larvan @AskTaxGuru

    Most of the time, I go overboard with Christmas gifts. It’s a different feeling when you’re planning from when you’re already at the store. Also, before making any online purchases, check if the site is legit based from reviews. Do a random online search to see if they’re really well worth it.

  10. Georgia

    Good tips!! I like No 4- Shop early if a decent sale comes along. Not only will this save you money, but it can save you the hassle of crowds in December. Especially fitting with today being Black Friday 😀

  11. S. McLenehan

    Christmas shopping is like grocery shopping. If you don’t make a list, you pick up too much ‘other’ stuff. Budget is also key. Set a limit or you are in trouble. Also, make a pledge to NOT have a Christmas hangover on your credit card! Finally, watch that you don’t shop too soon and then feel like you need to shop again because of all the ads and specials. At Christmas time, less is more.

  12. Susan J

    Budgeting for Christmas should begin in January. I physically have a separate savings account for Christmas. That being said we do gift exchange with our 3 kids and spouses. What I find is that most of the budget is on food and drink. We also choose to give gifts to those who can’t give back to us. So many people right in your own corner of the world that need help when we can just go buy what we want and when we want. So debtless Christmas is the way to go! What we do spend on is time! Getting a 24-48 hour period of time with those you love is the best gift overall. 🙂

  13. kejing

    I would also add that if you feel like you don’t know what to get the other person, you can check out a website like and they have articles dedicated to reviewing best gifts under $50, $100, $200. You’re getting a top notch product at the best value. Takes the guessing right out of gift giving!

  14. Tyler @ Oddball Wealth

    Having a Christmas budget is important. I know a lot of people who go into debt just to purchase gifts. Thanks for the great tips!

  15. Nancy

    I gotta say that it’s so refreshing to click on a pinterest post and get actual ways to save money for Christmas. Great Job! I’ll be launching my blog “ Shes Got Cents Now” soon and look forward to reading more of your posts!

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