Christmas Budget Planning Tips – How To Make Christmas Magical On A Budget

Looking to have a magical Christmas this year, but not overspend? These Christmas budget planning tips will help you stay on track!

I remember when I was making some common Christmas budget planning mistakes year after year.

January would roll around and I would wonder where all my money had gone to. Worse, there was nothing left to spend on any of the after Christmas sales & clearances!

Christmas Budget Planning Tips & Tricks

But then I started to really plan out my Christmas budget and stick to it. Now when January comes, there is money to use in the new year and no Christmas spending debt do drag me down.

If you’re tired of overspending at Christmas, you’ve got to get control of your Christmas budget! Use my Christmas budget tips & ideas to take control of your finances this year and stay on track.

Tip #1 – Know How Much You Plan to Spend This Year in Total

It’s important to plan out how much you want to spend on Christmas this year. Without a total number in mind, you have no idea if your Christmas budget is within your means.

Christmas spending can quickly get out of hand, so it’s good to start with a total spending number.

How much should I budget for Christmas? What’s a normal Christmas budget? There’s a few good ways to figure out your total Christmas budget:

1. Determine how much you spent on Christmas last year and assume this year will be about the same.
2. Determine how much money you want to spend on Christmas per month (e.g. $100/month or $1200/year).
3. Determine if any miscellaneous funds in your October, November & December monthly budget can be put towards Christmas (e.g. $300 from October’s budget, $400 from November’s budget, $400 from December’s budget = $1100 total)

Regardless of how you do it, make sure to have a total Christmas spending amount in mind. It’s a good idea to figure out this number at least several months in advance, so you can plan ahead.

Tip #2 – Consider All Your Christmas Expenses

When most people think of a Christmas budget, they think of the money they plan to spend on gifts.

But consider these additional Christmas budget categories during your planning:

1. Christmas Cookies & Baking – making Christmas cookies is a fun tradition, but the cost of ingredients can really add up.
2. Christmas Decorations – do you need a new artificial tree this year? Want to add a few items to you Christmas decor collection? These items should be factored into your budget.
3. Christmas Meals – you’ll want to make sure you account for holiday foods in addition to your normal food budget in December.
4. Christmas Travel – going out of town to visit friends & family will cost you money in travel expenses.
5. Christmas Cards – hiring a photographer, printing out cards/photos & postage costs can add up quickly if you’re planning to send out Christmas cards.
6. Christmas Traditions – certain holiday traditions like attending Christmas shows, buying Christmas PJs, etc. might have a cost associated with them.
7. Christmas Party – hosting a Christmas party this year? You’ll want to set aside some funds to spend on your bash no matter how big or small.

Tip #3 – Know How Much to Spend on Gifts

Figuring out how much to spend on Christmas gifts can feel overwhelming. A lot of us just buy whatever gifts seem appropriate and worry about the costs later.

But this can lead you to going into debt over Christmas gifts, which isn’t a good thing to do. The smarter method is to plan out your Christmas gift budget before you go shopping.

First, create a list of all the people you plan on giving gifts to. Consider:

1. Spouse, partner, boyfriend, girlfriend
2. Children
3. Parents
4. Siblings
5. Grandparents
6. Aunts, uncles
7. Nieces, nephews
8. Cousins
9. Pets
10. Friends
11. Teachers
12. Delivery, service personnel
13. Neighbors
14. Coworkers
15. Charity donations, gifts

Then consider the amount of money to spend per person and per child. Don’t forget to create a Christmas stocking budget too! Here are some general guidelines to get you started:

$200 Christmas Gift Budget for Kids

• Kids aged 10 to 18+

$100 Christmas Gift Budget for Kids

• Kids aged 0 to 9

$100 Christmas Gift Budget for Couples

• Spouse, partner, boyfriend, girlfriend

$50 – $75 Christmas Gift Budget for Family

• Parents
• Siblings

$25 – $50 Christmas Gift Budget for Family

• Grandparents
• Aunts, uncles
• Nieces, nephews
• Cousins

$25 or less Christmas Gift Budget for Friends & Others

• Pets
• Friends
• Teachers
• Delivery, service personnel
• Neighbors
• Coworkers

These are just suggestions of course for a Christmas shopping budget – find a price range that works for you!

Tip #4 – Give Yourself Some Wiggle Room

Doesn’t it seem like there’s always something extra to buy at Christmas?

Impulse shopping at the stores. Adding extra items to your online cart to score free shipping. Buying a little something for yourself or treating the kids to a nice surprise.

Smart Christmas budget planning involves putting aside a bit of money for spontaneous or unplanned expenses so you don’t go over your original budget.

Tip #5 – Set Priorities Within Your Christmas Budget

Unless you plan keep things very low key during the holidays, there will be things you’ll need to spend money on for the Christmas season.

If you’re having trouble setting up a budget you can stick to, make a list of Christmas spending priorities.

At the top of the list might be things like food for Christmas dinner and presents for the kids. Lower on the list might be things like going to see a Christmas play, buying a new piece of Christmas decor.

Start with the high priority items and shift money around as you go. You might not be able to buy everything on your list, but at least you’ll have the important stuff covered.

Tip #6 – Set a Realistic Christmas Budget

How much to spend on Christmas? According to Gallop, the majority of American’s will spend at least $250 or more on Christmas:

"The average amount Americans anticipate spending [on Christmas] encompasses a range of shopping budgets.  More than a third of U.S. adults, 37%, plan to spend $1,000 or more.  Thirty percent plan to spend between $250 and $999, while 17% plan to spend less than $250."

So what is the average budget for Christmas? Most Christmas spending is based on income level and a person or family’s willingness or ability to spend money during the Christmas holidays.

What is a reasonable Christmas budget? How much should you plan to spend at Christmas? Consider the following:

• Do you have kids or like to buy lots of presents?
• Do you plan on cooking lots of food, baked goods?
• Do you plan on hosting any Christmas parties?
• Are you planning to travel for Christmas?
• Do you like to buy new Christmas decorations each year?
• Do you like to do lots of Christmas activities such as plays & concerts?

All of these Christmas activities will add considerably to a Christmas budget vs keeping things low key during the holidays.

So what is a good Christmas budget? Many experts recommend spending no more that 1-2% of your annual take home pay on Christmas. So if your household brings in $50,000 per year after taxes, retirement contributions, etc. you might spend between $500 – $1,000 on Christmas.

However, the answer to how much to spend on Christmas really depends on your financial situation. Consider:

• Your annual income
• Paying down debt
• Financial priorities (buying a home, sending kids to college, planning a wedding, dream vacation, etc.)

All of these things should factor into how much your willing or able to spend for Christmas.

Tip #7 – Track Your Christmas Budget and Expenses

How to budget at Christmas when things are busy and chaotic? You’re probably going to use something to track your Christmas budget such as a list, spreadsheet, app or paper printables.

But don’t forget to track your expenses too! As you spend money on Christmas gifts, food, etc. make sure to keep track of the costs. This will help you figure out of your Christmas spending budgets were realistic or not.

If you already using budgeting software like You Need a Budget, then setup Christmas budget categories to track expenses as you go.

Looking for a free Christmas budgeting solution? Stay on track financially this year with this FREE printable Christmas budget tracker. Sign up below for an instant download!

Tip #8 – Stick to the Plan

It’s so tempting at the holidays to just let your hair down, get out the credit cards and spend some money! After all, you’ve probably been working hard all year and want to take a breather.

It’s normal to want to have some fun around Christmas, but if your trying to get out of debt or get better with your finances, then you’ll need to have some self control when it comes to holiday spending.

Create a Christmas spending limit and find the will power to stick to it.

Keep bigger goals in focus. Is the extra spending at the holidays worth the cost you’re going to pay? Or is the money better spent on something else?

Only you know the real answer to the question “how much should I budget for Christmas this year?”.

If you like to budget using pen & paper, I’ve got a great set of Christmas budget printables in the Ultimate Christmas Planner.

The Ultimate Christmas Planner includes budgets for various categories (baking, meals, gifts, etc.), expense tracking, overall budget, monthly & yearly savings plans & more! If you’re trying to get your trying to stay on track this year with Christmas spending, this printable Christmas planner is for you.

Grab the Ultimate Christmas Planner printable HERE!

More Christmas Planning Ideas

For more info on how to plan your best Christmas yet, check out these posts:

• The Complete Christmas Planning Guide For Busy People
• Ultimate Christmas Planner Printable – Best Christmas Planner for This Year
• Christmas Dinner Planning Guide For The Ultimate Holiday Feast
• Now Or Later? Here’s When To Start Planning For Christmas
• 48 Hours Of Awesome – How To Plan Christmas Day & Eve
• Christmas Gift Planning – How To Plan Christmas Gifts This Year
• How To Plan Christmas Decorations The Easy Way
• 72 Christmas Planning Tips For A Surprisingly Easy Christmas
• {Free Printable!} A Christmas Planning Checklist For This Year
• {Free Printable!} Save Money With This Christmas Budget Printable
• {Free Printable!} Christmas Meal Planner Printable to Prep a Feast

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