How to Budget for Christmas Gifts

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Looking for tips on creating a Christmas budget?

We all know that Christmas shopping can get a bit out of hand, but your spending doesn’t have to.

In this post, I’m going to share my tips, tricks, and hacks for Christmas shopping on a budget.

Be sure to check out my free Christmas budget template and planning printables to make holiday planning easier this year.

1. Set a Christmas spending limit

First things first when it comes to budgeting for Christmas is setting a realistic spending limit.

How much can you realistically afford to put toward gifts after the responsibilities are taken care of (aka your bills) WITHOUT going into debt?

That number can be $200, $500, $1000, whatever that number is, you need to write that down and know that you can’t go beyond that number.

2. Have a bank account specifically for Christmas

Once you know how much you plan to spend on Christmas, open an account that’s strictly for Christmas shopping. This is the account that you’ll use to pay for all of your Christmas gifts.

It should be a checking account so that you have a bank card, but remember to keep this separate from your other accounts.

If you’re a bit late in the game and don’t have time to open an account, simply get a Visa gift card (or several) in the amount of what your budget is. You’ll strictly use them to purchase gifts either online or in the store.

3. Write out exactly who you’re buying for

To help reduce the size of your list, I recommend grouping families and couples together. That way you can get one gift for the whole family or for a couple.

Gift cards to eat out are typically good for this tip.

Put a limit on how much you’re spending for each person

You already know your limit for your total Christmas spend, now you should estimate how much you plan to spend per person.

If your total budget is $1,000 and you have 10 people on your list, you may spend $100 per person.

With the exception of each other and our parents, my husband and I like to keep our gift-giving at less than about $30 per person. Obviously, the lower the better, but we usually never pass this amount.

This gives a great frame of reference for what gifts to get each person.

4. Track your spending

Once you start purchasing gifts, it’s super important to track your spending just like you would any other budget.

Lists who you bought for, what gift you purchased and from where, and how much the total was.

This not only gives you a running total of how much you’ve spent so far, but you can also reference it in future years to know what you got someone.

5. Don’t forget the cost of wrapping paper, cards, postage, and gift bags

In most cases, you aren’t just going to give a bare gift. So make sure you account for the cost of wrapping pager, postage, cards, and gift bags.

Consider shipping directly from online retailers and taking advantage of their wrapping services.

I like to keep a stash of gifts bags that I receive over the years and reuse them for every occasion, especially Christmas. If I have to buy any new ones, I’ll just go to the dollar tree and snag a few.

6. Recycle gifts

Let’s be real, you don’t use every gift you get. Don’t let it go to waste.

If it’s better suited for someone else, just recycle it and give it forward.

7. Shop sales

You don’t have to wait for those two major shopping days to shop. If you’re saving all year round, you can take advantage of sales throughout the year.

One way to save is to use Rakuten.

I literally do 99% of my shopping online. So, I make sure to use Rakuten (formerly Ebates) when I’m shopping. This snazzy app allows you to get cashback when you shop.

I’ve earned close to $500 using it and will continue to use it!

Final Thoughts on Budget Holiday Shopping

Christmas comes every year, so don’t get caught off guard with your finances. Use these tips to plan and have a debt-free holiday season!

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