How to Stick to Your Holiday Budget (And Still Have Fun!)

If we are being honest we can say: it’s the worst time of the year for budgets. With the rising cost of toys, books, food, and decorations, it’s no wonder that January 1st comes with the need to put huge restrictions, not only on our eating habits but those of our spending as well.

Not this year.

Repeat it with me: Not this year.

Did you actually say it out loud? Did you actually mean it? If not, let’s try it out a third time just to make sure.


How to Stick to Your Holiday Budget (And Still Have Fun!)

This year we will stick with the holiday budget and the allotted amount of money we have for the festivities and we will recognize that all of the efforts we’ve made this past year with regard to making good budgeting choices do not have to go by the wayside in order to impress those around us.

And let me tell you…it’s a tall order for the weeks ahead when critical family members show up to dinner, and your kids are waiting for that perfect toy that they will play with once and then never use again. But it is possible, and I intend to show you how.

In fact, to make it especially easy, go grab my FREE printable right now so you can follow along. (Get it HERE.)

Did you get it? Great. Let’s get started.

Determine How Much You Will Spend…

Ideally, you’ve added a Christmas line to your budget so that each and every month you add a little money to that fund and when Christmas comes around, the amount is already there and ready for use. I tend to start in January by putting between $15 and $20 aside each and every month for this very purpose, which typically ends up being about $200 by the time I need it.

Of course, if you haven’t spent the last year putting money aside, then you need to decide how much you can feasibly spend on the holidays this year. Take a good look at your current financial situation (and your budget, too) and determine how much you will spend.

Did you notice that I didn’t ask you to determine how much you NEEDED to spend? That’s an important point to make because, just because you think you NEED to spend $20 per person for Christmas, does not mean that’s the RIGHT decision for you to make at this time. Start first by determining HOW MUCH you can spend and, don’t worry, we’ll make it work from there.

Add this amount to the first line on your worksheet. In my case, I’ve set aside $200 for this holiday season.

Determine What You Will Spend Money On

The next determination you need to make is what you will spend that money on.


Are you traveling this season? If you haven’t already paid for that travel, you will want to incorporate it on the travel line. We are not traveling this year, so I have simply written zero in that line.


Are you hosting? If so, what items will you need to make the meals you are planning? Estimate the food budget you will need (outside of your normal monthly budget) and add that amount on the food line. In my case, I know that I will be responsible for about $50 (not including my own weekly budget, so I’ll add that in.)


If you are planning to add to or replace your holiday décor (or simply don’t have any to begin with), it’s important to include the amount you will spend in this category. I tend to add one new decoration each year and I’ve already made the decision that it will be a nice set of battery operated lights for our stair railing garland.

After shopping around, I know that expense will run be $15, so I’ve added that to the décor line.

Remaining Budget

After subtracting your travel, food, and décor from your original budget, what you have left is the amount you can spend on gifts for others. In our case, I started with $200 and will subtract $50 (for food) and $15 (for décor) for a remaining balance of $135.


Of course, the part of Christmas that everyone loves is the gifts, so the next step on the list is to write down each and every person you want to give a gift to this season. Make sure to include any small gifts you will give to co-workers, Secret Santa-type events you are signed up for and, if you participate in Operation Christmas Child or a similar program, add that as well.

Go ahead and add a rough estimate of what you intend to spend for each person or event, making sure you stay within that “remaining balance” as you listed above. In my case, I had $135 left over, so I’m going to divvy that up as I see fit. While I’d love to show you the exact amounts, I have a very supportive family that reads my posts each and every week, so I’ll try not to ruin the surprise for them.

Consider Alternatives

If you find that your holiday budget doesn’t seem to be enough to cover everything (or everyone) on your list, it might be a good time to reconsider what you are doing with your money this season. In the past, have you gone into debt making everyone’s Christmas dreams come true? If that’s the case, then you might need to scale back and make sure that you are taking care of you (and your family budget) and enjoying a guilt-free holiday season.

I’d say that, for us, travel is the hardest, especially when it comes to visiting family. If you are already finding that the cost of your travel exceeds your budget for the holiday season, it might be time to reconsider that trip completely. Give it some serious consideration. What are your long-term goals? Does taking this trip this holiday season help you keep with them, or will you end up regretting the whole thing come January 1st?

If décor is the issue, then ask yourself the following: Is that set of new lights really necessary or could you hang on to the old ones for another year? Would your artificial tree, even slightly chewed up by the dog, be a better use of your efforts this year instead of the cost of a new one?

Rather than being responsible for the entire Christmas dinner, could you ask your family to bring their favorite side dish, thus making it more of a pot-luck style meal? Or, if that’s not possible, maybe they’d be willing to contribute a little money toward the meal you are planning?

Buying All The Gifts

Chances are, if you are finding it hard to purchase gifts for each and every person on your list, the people around you are as well. As a family, we’ve used several different techniques over the years that seem to help with that.

DIY Gifts

I wrote an entire post about the pros and cons of starting DIY projects, so if you are even considering a DIY experience this holiday season, make sure you check it out.

The best part about DIY is that you can make a project specific to those you love and can often make a large batch of something that everyone can have a part of. Some of my favorite and, not too expensive DIY Christmas gifts have included candles, lip balm and bath product sets, and hand warmers. Of course, the sky is the limit based on your own abilities, so you can make what you want.

DIY Public Service Announcement: If you are not naturally a crafty person it’s important to remember that just because it looks fantastic on Pinterest, doesn’t mean yours will, too. (I know it sounds harsh, but you’d rather me remind you ahead of time, right?)

Stocking Stuffers

One of my favorite years was the time when my family decided we were only going to give gifts that fit into stockings. The cool part about this was that families that could afford a little more and chose to spend more could do so, as long as the item fit in the stocking. On the flip side, though, if a family couldn’t afford to spend a lot of money on each and every person, they could add a small bag of candy or something else equally as inexpensive to the stocking and no one was any wiser.

It was a win-win situation for all involved and I’d highly recommend trying it.

Kid Gifts Only

My husband LOVES getting gifts, so we’ve never tried a Christmas in which only the kids get gifts. I do know, though, that many people do this regularly and are successful with it, so if you feel that you could cut out adult gifts (do we really need a new trinket anyway?), then this might a good money-saving method for you.

Draw Names

Similar to the Kid Gifts Only is the idea of drawing names. We do this in my husband’s family each and every year and it’s been a huge money saver for all involved. Each person draws the name of another adult to give a gift to that year. Typically, we have a certain money amount that each person is going to spend, but that could be up to you. We do still purchase gifts for all of the kids as well, but the nice thing about this is that everyone has a gift to take home with them at the end of the gathering.

Stick With It

Whatever method you choose to use, expenses you choose to include, or cutbacks you need to make, when you’ve finalized that budget for the holiday season it’s critical that you stick to your holiday budget. Spend the amount that you have allocated and let the rest of it go. Trust me, when you get to January, you’ll be happy you did!

Tip: Grab your FREE Holiday Budget Worksheet now! Find it HERE.