Christmas is my favourite time of the year, it’s a great time with the family to make memories. Although, this can be over shadowed if you’re struggling financially.

This is when Christmas becomes a stressful time, when the constantly worry of money is on your mind.

You don’t have to spend a certain amount of money on Christmas just because other people are. To have a good Christmas you don’t need to blow a fortune or max out the credit card.

You don’t want to wake up the day after Christmas with a massive knot in your stomach knowing that you just racked up all of your credit cards. Instead of enjoying the time off during Christmas break, you don’t want to be worrying about how you’re going to pay it all off.

You can do Christmas on a budget without worrying, when you know how.

This is why It’s very important to create a budget for Christmas spending. This way you can stick to the amount you want to spend, and not worry about overspending or resorting to a credit card to get by.

Creating a budget doesn’t have to be a complicated process.

In this guide I will talk through some tips that will be of help to you when budgeting for Christmas.



What is a Christmas Budget?

A Christmas budget is basically a plan for exactly what you’re going to spend your precious money on. You should reference your budget as you spend, and use it to keep yourself on track.

I think it’s easiest if you separate your Christmas budget into two parts. One part should be gifts and the other part should be other Christmas expenses.


Creating a Christmas budget

Spending less on Christmas gifts will obviously help, but spending less on a whole is the key to keeping to a budget. Save a bit here, and a bit there. It all adds up towards the money to you will save.

Some people make this process much more complicated than it needs to be.

Let’s keep it simple. I think you’ll be surprised at how uncomplicated this process can actually be.


Budget for gifts

You can start your budget for gifts by listing the name of every person you plan on buying a gift for this year.

Once you list all the people you want to buy gifts for, write down the amount you want to spend on each one next to their name. By doing this you will get a good estimate of what you will actually be spending.


Once you’ve written your list, this would be a good time to brainstorm ideas for gifts for each person, and find something within the price range of the amount you have highlighted to spend. I find this is easier to do when you’re already thinking about it.

After you assign an amount to each person on your list, add up all those numbers. Is this amount reasonable for you? Can you afford to spend that much on gifts? If not, go back and adjust your spending goals.

If you and your spouse (if you have one) will be shopping for gifts, discuss your gift budget together. By doing this you will ensure you are both on the same page, which will save any later headaches when coming to returning things.


Other Christmas Expenses

On a separate page, list all of the other expense you will have to pay for over the Christmas period. This will include things such as decorations, Christmas tree, food, any outings etc.


Basically, include anything that is Christmas related other than the cost for gifts.

All of these other expenses are important to track, as we often spend money like it’s going out of fashion, just because it’s Christmas! These expenses will take up a big slice of your budget, so you need to know what your money is being spent on.

Be deliberate about what you’re going to buy. Plan it ahead of time.

When you can, choose items that will last you several years. By this I mean things such has decorations. These should be purchased with the idea that they will last a few years, so you’re not buying the same things over and over, year in year out.


How will you pay for it?

I always want to know a rough estimate of how much money I need before I create a plan to save money. I figure out how much I’ll need to spend on gifts and other expenses, and then I plan for how I will save.


Below are some ideas of how to save money in the lead up to Christmas:


Purchase Early

One of the best ways to do Christmas on a budget is to plan ahead.

Saving money for Christmas weekly is one way, another is to buy non-perishable foods ahead of time.

There are rarely any goods deals on food during December but October/November is great for prices being slashed.

For example, my dad likes a bottle of Jack Daniels at Christmas, so I always buy it in October when the price is £15 instead of the usual £25.

I just have to hide it for 2 months someplace safe!


It’s a great idea to simply scout deals on the websites of the stores that you shop at.

Just from the top of head I can tell you that Asda, Aldi, Co-op and Lidl all have weekly and monthly deals that they promote online.



Use Discount Stores

The discount grocery stores like Aldi and Lidl are a great way of buying cheap Christmas food in comparison to the bigger stores.

They have a good range of festive foods along with their usual low prices.

Don’t upgrade your grocery store just because it’s Christmas, sticking with low cost stores is a great way to save money for Christmas and beyond.

Just because the items are cheaper it doesn’t mean the quality is not as good, majority of the time you’re paying just for the name of the product.


Supercooks is a website that helps you re-create recipes from leftovers.

Just list out the ingredients and let SuperCooks tell you what to cook! Never again will you have to stare at those leftovers in the fridge and wonder what to do with it.



Cashback Sites

If you are shopping online, always go via cashback sites to see if your chosen retailer is listed.

Sometimes they are, sometimes not.

Going via a cashback site is incredibly simple.

Sign up for the cashback site (my favourite UK ones are Quidco and TopCashback) and then find your chosen retailer and click through to their website.

I recently purchased some earrings for my partner through Quidco and received £10 in cash back.

In the US the favourite cash back sites seem to be Ibotta and Rakuten (was Ebates)



Vouchers and deals

The Honey extension/app is a great website for finding vouchers from thousands of retailers online.

I have saved money when making purchases on clothes through Honey on several occasions.

Also, Latest Deals is great website for bargains and deals.

While saving money you also earn points though the above sites, which can them be redeemed into a giftcard of your choice.

These sites are no brainer!

Related posts:

What to know more about Honey? Then see my detailed review below:

Want to know more about the Latest Deals? Then see my detailed review below:



How To Create a Christmas Budget – Final thought

It’s important to remember, and it’s something that I try to focus on every year, that Christmas is not about what you receive, but rather the memories that you make. Christmas is about being around the people who you love and care about, and that’s the most important gift that you can give.

Financially, ultimately, your goal during Christmas is to survive debt free. You don’t want the stress and worry of maxed out credit cards hanging over your head during the happiest season of the year.

A Christmas budget is an essential tool to help you know exactly where your money is going. Having a plan will keep you stay on track and avoid overspending or running up debt on your credit card.

Budgeting for gifts and other expenses separately will help you keep things organized, and overall lead to a more pleasant Christmas making happy memories.

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