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Plan your peaceful Christmas: prepare the budget

Christmas is officially 7 weeks away. I know — wasn’t it just June? It’s hard to believe it’s already time to prepare for the Christmas season, but it’s better to plan ahead now, before things get too crazy and before you know it, you’re up to your eyeballs in commitments and wish lists and powdered sugar.

There are many facets in a typical holiday season — you’ve got your gifts to buy, home to decorate, events to attend, and food to prepare. You might want to find ways to serve your community, maybe you’d like to start a new family tradition, or perhaps your family is planning a road trip to visit family.

But none of this will be done well if you don’t budget for it. In fact, you can prepare for a post-holiday burden if you don’t allocate your funds for specific holiday needs. You can also probably assume a bit of stress and chaos if you don’t look at your money square in the face.

So that’s why I think the first step in preparing for an enjoyable holiday season — where you’re focused on the things that really matter — is to budget.

It’s not sexy, but it’s gotta be done. So let’s roll up our sleeves and look at some key factors in budgeting for the holidays.

Write out your needs.

Several years ago I created a very simple Christmas budgeting worksheet, and it’s still available for free on my downloads page. Here, you’ll have space to scratch out your tentative needs for the holidays, being especially mindful of those things that we easily forget.

Christmas lights? Extra baking ingredients? Additional teachers or coaches on your gift-buying list? These all require money.

Look at your money square in the face.

Ideally, you’ve saved up a little all year long, so by December, Christmas isn’t anything extra. If this didn’t happen for you this year, though, that’s okay. Make a plan to do this next year, and every year from now on, because Christmas isn’t an emergency or a surprise. It’s always on December 25.

This year, jot down every. single. expense associated with your holidays as you spend money, and next year, use that as a basic template for your holiday budget.

For now, though, you’ve got needs for this Christmas, and a finite amount of money. What do you do if your expenses are more than your income? There really are only two options: to either decrease your expenses, or increase your income. There are several ways to either option, and you might need to do a bit of both.

The most important thing is to not spend money you don’t have. Credit cards are never, ever an option for Christmas (or for anything else, for that matter). You simply can’t spend someone else’s money, hoping that one day, you’ll have the funds to pay it back. It’s not a game of risk worth playing, and it adds serious stress to your family life. Living on credit is the antithesis to simple living, in fact.

Don’t do it. Really. Those commercials that tell you it’s a wise idea to buy gifts on credit cards because you’ll get airline miles, or cash back, or additional purchasing power, or whatever are lying.

So how do you realistically either cut expenses or add income? Let’s look at a few options.

1. Embrace a homemade, less-is-more look in your home.

Photo by Paisley Handmade

I also love decorating for Christmas. But I’ve grown to love a minimal, authentic look using handmade crafts, sources from nature, and longer-lasting decor, thereby keeping our expenses way down in the decor department.

I’ll highlight some of my favorite decor ideas from around the blogosphere in the coming weeks. So as you plan your budget, you can drastically cut your decorating line item by investing in low-cost supplies like construction paper, fabric remnants, glass jars, and pine cones and twigs from outside.

2. Set a limit on gift giving.

In a few weeks, we’ll talk about creative ways to simplify gift giving with your children, and to start traditions out of how and what you buy. However, you can decide now not to go nuts with the gifts.

Look at your line items for gift giving. Can you lower your allotment for certain people? How about cut out gifts for other people all together? I know it’s not easy to talk about this with extended family, but it’s important, especially as your family grows. You can’t keep buying gifts for every single niece and nephew, all your in-laws, and the neighbor’s dog forever.

Perhaps suggest drawing names, so that everybody only has one person for whom they need to buy a gift. This doesn’t always work, though, when you’ve got five people in your immediate family — that’s still five gifts that easily add up.

You can also suggest doing homemade gifts (cookies in a jar are always nice), creating handmade coupons for services (babysitting, anyone?), or chipping in and pooling some money to buy gifts for those less fortunate.

Or — here’s a crazy idea — just stop doing gifts all together. I enjoy wrapping gifts and watching loved ones open them as much as anyone, but at some point, the bleeding has to stop. You can still have fun as a family without giving gifts. Send out an email to your extended family, and see what people think. You might be surprised that others feel the same.

3. Stay out of stores, especially the mall.

Photo by David Porter

Sure, you might have to go once, to get something specific. But unless you’ve got your seasonal job there, going to the mall regularly because of the festive mood is just asking you to whip out your wallet more times than you intend. It can be fun when the music’s playing, the stores are festooned with Christmas decor, and Santa has a line of kiddos waiting to get a photo with him. But this is all part of the stores’ plan to get you to spend more money.

When you go shopping, go with a list, with a purpose in mind, and with cash. Leave even your debit card at home.

4. Find a seasonal job.

For four Christmases over the past ten years, I worked as a gift wrapper at Williams-Sonoma. I adored that job (wish I still could do it, sometimes). I love that store, I thoroughly enjoy wrapping presents, and I got a sweet discount for working there — perfect for gift buying. Plus, the pay wasn’t bad for temporary work.

It was a creative outlet, and we played holiday music while we wrapped, which made it even more fun. It almost became a family tradition for us, my gift wrapping at Williams-Sonoma. This is where our Christmas money came for several years.

Between you and your husband, can you find time to work a seasonal job? A couple evenings a week should suffice — just enough for your holiday needs. Check your local stores that do a lot of business over Christmas, or think outside the box and think of things you can do online. Now might be a great time to start that Etsy shop you’ve been meaning to create.

Important: Start looking for a seasonal job now — in a couple weeks, the college students will fill those positions, and there won’t be any spots left.

5. Make a bigger deal out of the little Christmas activities.

a christmas story
Christmas movies are either free on TV or in your DVD collection, already in your budget with Netflix, or fairly inexpensive at stores. When you watch them, dim the lights and pop the popcorn. Make an event out of watching them.

As you wrap presents, play your favorite holiday music and make hot cocoa. It’ll feel more festive.

When you make a bigger deal out of these smaller activities, they’ll become more fun.
It’ll also quench your thirst for those bigger-ticket Christmas events.

All in all, you can have a great holiday season without breaking the bank — a fun Christmas and a bank account in the black aren’t mutually exclusive. But the sooner you plan your budget, the better prepared you’ll be, so that you’re not panicking when it’s time to make purchases. And if you plan well, you can spend more on the things that really matter to you, and your family won’t feel deprived of the Christmas spirit.

This post was brought to you by The Vintage Pearl, which creates hand-stamped jewelry using only the finest materials (every piece is entirely made of sterling silver). See some of my favorite pieces here and here. A unique gift idea!

What’s your most challenging line item on your Christmas budget? What’s different for your budget about this upcoming holiday season?

Reading Time:

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  1. Lindsay

    I love this post! I needed this. I was thinking about Christmas today and getting a little overwhelmed already and this helped calm me down and get me excited for it. (except reading that it’s only 7 weeks away…yikes!)
    p.s. love the home made decorations, so cute.

  2. Kateisfun

    Great post! Our most challenging line item? Everything. We are executing an international move two weeks before Christmas, closing on our house, and will have about six weeks between paychecks due to a change in jobs, so things will be tight for just a little bit… Love the idea to make a big deal out of small activities!

  3. Micha

    Thanks for this post. I had to start thinking about some of the points. The most challenging for me is to limit the budget for gifts. I did some small steps, but it’s not easy to convince the children.

  4. TAbitha (From Single to Married)

    I have to say – I’m really glad to be married to a CPA because he is great at the whole budget thing and every year he plans for our Christmas budget at the beginning of the year. That said, almost every year we run over it. 🙂

    But not this year – I just quit my job to be a SAHM, so we are kind of tight and will be going with a lot of homemade stuff and DEFINITELY following a budget! So thanks for the extra tips!

  5. Carole

    “Stay away from the mall” is a good one! How about “stay away from Target”? 🙂

    I like the idea of funding a microloan, perhaps through or World Vision in place of some or all of the money that would otherwise be spent on gifts.

  6. MostlySunny

    LOVE the tradition of the movies…we try to do that –and with the “Christmas Story” movie too!

    I don’t like the “things” that inevitably come into the house each holiday. I have to say –My in laws are famous for buying the kids all sorts of things that they don’t want. The kids are pretty specific if they want something, and they don’t ask for much. It jsut happens that the in laws (while trying to do good in their eyes) load them up with a BUNCH of CRAP that the kids open, say thanks for and then never pick up again. THAT is my greatest stress of the holiday. we have told them in the past–and they take offense to it. They have told us that they will do what they will.

    I am doing handmade gifts and baked items this year.

    • Angela

      When things come in that we truly cannot use, need or want, we are thankful for the thought, used to keep them for a while, but some we believe are detrimental to our values. Some of these things are actually expensive toys. So we attempt to sell some, take that money and get something that is nice and wanted. The other things are donated. So nothing really goes to waste. It is not as simple as getting what you want, but it is ok for our children to know they can’t always have what they want. Our in-laws don’t like that we prefer them to give the children one quality gift. They prefer to give lots of cheap things, but they have noticed that the children are still playing with high quality toys years later and the cheap gifts often break the very day they are opened. I am trying to teach the children to be mindful of the giver’s feelings, to be truly thankful for the thought, and wait until later to get rid of the unwanted things. We are so much happier with less stuff. If we’ve tried to say what we want, and are still given what we don’t want or need, it is time to accept it and stop trying to change the givers. 🙂 They also might not be thrilled with our handmade, minimal gifts.

  7. renee @ FIMBY

    Travel is the most challenging line item in our budget and what we spend the most on. Gifts are just a small part of our holiday and mostly handmade, with the exception of a few purchased gifts for the children. One or two gifts total for the kids from us.

    Keeping Christmas on budget gives me great joy. Really. I feel like I’m not losing focus of what the season is really about.

    If readers are looking for some handmade gift ideas I have some posted here:

  8. Linen and Tulle

    We came up with a budget in Sept and now we just need to stick to it. We also share it with the kids so they have realistic expectations. They were a little bummed about the per person limit but once I made them add up all the amounts, they could see how it gets to be too much. And through out the year, the kids find each other gifts and save them. (for example: One son read 10 books over the summer so he got to pick a free book from the book store. so he chose one that his sister would like and put it aside)

    • Gina

      Oh my gosh, that is so sweet. Your son is amazing. 🙂

  9. Amanda Morgan

    All great points, Tsh! I partucularly love your point about making a big deal out of simple events. That’s really what it’s about. That’s why it’s called a Christmas “season”. But too often we all get tied up in the gifts. I often remind myself that I can hardly remember a single present I got for Christmas as a child, but I remember the traditions!

  10. Kelly

    This is a great post! My challenge is simply sticking to the budget. It’s easy to think of so many things that would be special to give and even handmade gifts can add up. And for us, getting a christmas tree is expensive but it’s a special tradition. Thank you for the reminder to budget for decoration, baking, etc.

  11. Mrs. M

    One thing that I am planning to do this year is make a bigger deal of small things or rather, just make sure that we are spending a lot of family time together. I’m going to wrap up 24 Christmas books (most of which we already have) and every night in December, we will gather as a family, sing a Christmas carol, unwrap a book, and read it together. I’m also planning to incorporate service ideas into our advent calendar.

  12. Lauren

    We are still deciding how to allocate our holiday budget this year. We save for the holidays year-round, but we are still always tempted to spend a little more than we save. One expense that will be added for us this year is the purchase of a christmas tree. We had been using my parents’ old artificial tree, but it was finally time to put it to rest after last year. We are going to test out using a real tree this year and see how we like it …

  13. Alison @ Femita

    Love the idea of a seasonal job, but it’s kind of hard to find here in Europe. To limit expenses I try to come up with creative gift ideas like making a collage or putting pictures in a beautiful old frame I found at a little antique market or rummage sale. These kind of gifts are also very personal and people seem to appreciate that!

  14. RE

    For my husband’s family, we participate in a gift-swap for everyone age 10 and up. It is a large family, so this plan definitely cuts down on expenses. We draw names in September, and buy for one person. The gifts cannot exceed $40. Anyone younger than 10 gets gifts from whomever wants to give one (grandparents, aunts and uncles, cousins, etc.) It is a big deal for the kids when they are finally old enough to participate in the gift swap.

  15. Dana @ Budget Dietitian

    Tsh, I was going to write a post with the EXACT same thoughts. I couldn’t agree more.

  16. Whitney

    I love the tip to stay out of mall. Although I do love the festive windows, familiar carols, and cheerful faces, the mall can deplete more than your wallet. I try to stay away from large crowds during cold & flu season, which is another way to mind the budget–sickness is expensive!

    We also savor the little pleasures. I use our advent calendar to highlight an activity a day, from a walk with hot cocoa to a simple holiday craft. Another thrifty move–the stockings are stuffed with my childhood heirlooms.

  17. Christine

    I totally agree with staying out of the mall, but one way my family saves money is specifically doing a “mall” trip with no shopping. I love the feel of Christmas in the city with the shops, the lights, the music. I do most of my shopping online and we live in a smaller town now. Our money saving idea is that we plan one trip a year to the city and go to our favorite stores and do no shopping. We get hot cocoa or a latte, walk around and look at the lights, do the kids santa picture and play with all the fun toys in the toy stores – then we go home. It’s fun for everyone. Is a great fix for my Christmas craving and sometimes gives me gift ideas for the kids for me to buy later if it works with our budget and I can find it on sale.

    This year, I’m also looking more at buying used for the kids or repurposing. I already took a nice ride on fire truck over to my nephew becuase he will love it and my kids weren’t using it. It’s hiding out at grandma’s house and will be joined by a much smaller gift of a firetruck book. A great moneysaver. Ebay and the local consignment store are going to be my friends. They always have thomas trains and last year’s model of the electronic gizmo my kid wants supercheap.

  18. dyan

    I have 4 children ages 12 – 22. The stuff they desire is EXPENSIVE. Somewhere I found this little “guideline” for gifts: something you want, something you need, something to wear and something to read. (Thanks to the author!) Even my 22-yr. thought it was cute, so that’s what we’re doing this year. Four gifts. I’m also not going to stress about making sure they are even dollar-wise, either. This gives me a huge headache, trying to make sure everyone’s even.

    We have seriously limited the people we buy for. The people we stopped exchanging with seemed relieved, as well. I’m going to incorporate your idea to make the little things more festive this year. We used to read a Christmas storybook each evening when the kids were small. Any suggestions on ideas for older kids ?
    Thanks for the great post. I’m inspired to start planning now!!

  19. Jenna

    I make most of my gifts so it is finding time in the midst of the holidays to actual make them!

  20. priest's wife

    ok, ok- you got me- we are writing a budget tonight!

    Thanks for the reminder and the tips

  21. Melaniesd

    This year we discussed gift giving with all the adults. We agreed to just give gifts to the kids. As much as I adore Christmas and really enjoy gift giving, I am feeling relieved this year to not have to worry about it.
    We all feel the same way. If we want something, we buy it for ourselves. We don’t want each other struggling to afford the holidays – it’s about family & friends – not STUFF.

  22. Living the Balanced Life

    We have been kinda spoiled as my husband always gets a several 1000 dollar bonus at the beginning of December. We always use it to pay our house taxes, clean up a few small bills, make a major repair or 2, find a family to bless anonymously and then we spend the rest on Christmas. This year it is rumored we won’t be getting a bonus. Oops.
    I will need to look really closely at your tips here as it may be a very frugal Christmas!

  23. charis

    what a great post! i have already been getting a head start of homemade gifts, as we live on a ministry income. i love christmas! i love giving! i hate debt, so i have to be creative!

  24. Anna

    Really good post…we have never used credit for Christmas, but we have never budgeted either. This year we are going to try more handmade/food gifts, but I worry about finding the time to do it. I am really wanting to simplify gift giving for the kids, but my husband’s family always does Christmas big, so he’s not really on board there. I’d love some suggestions on convincing family members to simplify.

  25. candi

    Excellent – we all need to stop & really think about what we are doing on Christmas. Our family loves making gifts for others: soap, lip balm, maple syrup, baskets, and other things that we know our family & friends will enjoy. One thing we always do is prepare our kids for what they may not get so they don’t have unreasonable expectations – especially when friends are getting tons of the latest & greatest toys of the season. Ours know that they are getting things they really need & at least one present that they will love more than anything.

  26. Jessica

    Guess everyone’s different– I love going to the mall. I rarely have the urge to buy anything– it’s mostly boring or overpriced. If I see a great idea, I’ll go find it cheaper online. But walking around and seeing the lights and hearing the music is great fun.

  27. Rachel

    We have a $30 budget (each) for everyone outside of my husband, my son, and myself. If I can find things that will make up approximately $30 worth of stuff, I call it even. But we draw names, so we’re already getting a deal as far as buying gifts. The tricky part comes when we’re deciding to buy for friends. Our best friends are having a baby near Christmas, so maybe we’ll catch a break there…

  28. MissyG

    The most challenging item on our budget this year is gifts. We have more going out than coming in, and a lot of times we rob Peter to pay Paul. This year has been especially rough because my husband graduated in May, took a job for less than we anticipated and I haven’t received the raise I have been promised…twice! Usually we go all out- including for our parents and siblings…and the funny thing is… my husbands parents, they don’t get excited at all about the gifts we get them and I rack my brain for weeks thining of the perfect gift suited to their likes! This year, I shopped in the summer for them- both times stumbling acrossed something on sale for under $5, its something they like/collect- so whats the difference between $5 and $100 if the reaction is the same? LOL. But for the kids on our list, we always get something special. But this year, our daughter and the people who have touched us most in our lives get our $ first! :o)

  29. K. Bunthoff

    As everyone else has said, “Great post!”

    If you have a library nearby, and would like a bit more thinking on the whole holiday thing, see if they have a copy of Unplug the Christmas Machine by Jo Robinson. It’s a terrific resource–very helpful if you *want* to do the holidays differently but are easily guilted back into the ratrace.

    Like others have said, it’s another as-handmade-as-I-can Christmas. The rest is on sale, gathered slowly throughout the year…

  30. Alexis

    Holiday budgeting is at the top of my to do list! I’ve had ballpark numbers in mind, but now the trick is to stick to it and try to simplify!

  31. Nisha
  32. Scarlet

    This is good advice. I am so bad a budgeting! I try to just spend as little as I feel like I have to and then make it all work. Not really a plan but reality!

  33. Nisha @ Healthy Mom's Kitchen

    I too love this post! My husband and I keep it super simple at Christmas. It’s easy to do so with so many grandparents for our children. I always pick up a few things at garage sales during the summer for my daughter and my son is only 1 and so he’s only getting a few things so my older daughter doesn’t wonder if he was on the naughty list…hahaha!

    I absolutely must stay out of stores though because I’m a sucker for great deals, so I just have to remember I’m done. I’m also going to wrap things soon so that everything is in one spot and I can see how much I have. Right now, it’s all hidden in different places in the house.

  34. Jana

    I’m minimizing my christmas decorations so this year I have decided to decorate with pine cones. I plan to toss them after the holidays. I’ve been collecting them in my neighborhood….I live in a tract home. They looks so pretty in bowls and galvanized steel buckets. I may just do this every year 🙂

  35. Mary @ A Simple Twist of Faith

    This year is my first year as a full-time Mom, I am looking forward to enjoying the holidays with my children in low-cost ways, far from the mall. For example, we are going a “Tacky Light” tour as we search out the most creative and wacky Christmas displays. We are also participating in a Jerusalem Walk, a joint community effort among several churches.

  36. Tina @ Dance Star Mickey

    Sticking to the budget is always a little tough for me at Christmas but the last few years have been much better. Staying out of the mall is huge for me – once I’m there I always feel like I just have bought “enough” gifts. Great tip to stand by!

  37. melanie keck

    a few years ago we decided to quit on the gift giving and do a service project as a family. IT WAS GREAT! spending time together and making memories is what we are all about. My parents have started giving us a trip or activity during the summer. So at christmas we get an envelope with a tentative date and place for summer family fun. it is nice because we get to spend time together at christmas time and in the summer. We have really simplified things over the last few years and it is nice to be able to settle down and enjoy the holiday season and the reasons behind it all. We are also on the Dave Ramsey get out of debt plan where “birthdays are a card, and Christmas is a craft” I think that even after we are out of debt (within a few months) we will still continue to live this way. I am loving a more simple life!

  38. Amy

    We are trying to teach our kids to both be generous and to budget for the holidays. Each of them will draw a siblings name and plan a fun gift that their brother or sister will enjoy.

  39. Tom @ Anxiety Treatment

    Christmas is always in our hearts. We don’t want to be a giving person because of that season coming out but it should be everyday. And that is why budgeting is so much important. If we have money or some salary has come we segregate it to 3 division no. 1 is for the Lord, no. 2 is for the giving/ ministry and no. 3 for our family needs.

  40. Tulle

    Christmas is a festive season people don.t worry about spending money on this occasion.

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