The holidays are supposed to be a joyful time of year, but sometimes they can be stressful and too expensive. Here are 14 ways to have yourself a merry (frugal) Christmas without blowing the budget.
Gift Giving
1. Set a budget early
Take some time before the holiday season to decide who you will buy gifts for and come up with a budget for each person. Make sure the total budget is appropriate for your financial situation. The worst thing to do is to go into debt because you spent too much money buying presents.
Some people find it helpful to determine their budget early in the year and contribute to a Christmas sinking fund each month so that they don’t need to come up with extra money in December.
2. Reassess your gift giving list
It’s always nice to give gifts to people who don’t expect it, but do you really need to gift everyone you come in contact with? Probably not.
Chances are there are at least a few people on your gift giving list that you are buying for out of obligation. Take a fresh look at your list this year and cross those people off. Gifts should come from love, not obligation. If you receive an unexpected gift, a heartfelt thank you or holiday card with a personal note is perfectly acceptable.
3. Plan your gifts ahead & shop the sales
Before you begin Christmas shopping, plan out ideas for each person that fall within the budget parameters. Consult your list regularly during the shopping season and keep track of what you’ve spent for each person as you buy. You can use this list to stay within budget AND strategically take advantage of any black Friday sales or other holiday deals.
Also, don’t forget to comparison shop before you buy. It only takes a minute to search for competing prices on Google but doing so can save you a lot overall. Checking for any cash back offers on your credit cards or apps like Rakuten (referral link – Get $40 back) before you buy will also keep costs down.
4. Suggest a Secret Santa gift exchange
While some people enjoy gift giving, it can be overwhelming for others… especially if you have a large family or group of friends.
Suggest a Secret Santa or other Christmas gift exchange this year to reduce the stress (and stay on budget). Pick names from a hat (or use a free online secret Santa generator) and set a dollar limit for gifts. You can even have participants upload a wish list if there are members of your group that are hard to shop, or that find gift giving stressful.
We switched to a gift exchange a few years ago with Mr. RFL’s family, and it’s really helped to keep spending down and made things easier as the family grows. Kids aren’t included and usually get a small present from everyone.
5. Give handmade gifts
Sometimes the best gifts don’t cost much at all. Consider giving a handmade gift or the gift of your time. A cozy blanket, if you’re an experienced knitter, or a basket of treats if you’re a fabulous baker… these would make great gifts. If you’re handy or have a specific skillset, consider offering your time to help with a related project. These gifts are often the most appreciated. You could even set a rule amongst your group that all gifts must be homemade or under a small dollar threshold.
6. Keep the number of gifts to a minimum
This is especially important with kids – it’s so easy to spoil them with everything their little hearts’ desire. Just remember that the law of diminishing returns comes into play here. Your child will receive more joy from the first gift they receive than the 20th.
I would encourage you to consider limiting gifts to just a few, especially if your kids are young. Whether you need to cut back for financial reasons, or just want to manage expectations, doing so will help teach your kids to be happy with less. We’ve started this tradition with our little one, giving her just one gift from Santa and 2 – 4 others from us. Doing this while she’s young will help set the stage for what a “normal” Christmas is in our home.
If your children are older and used to receiving a lot of gifts, try having an honest conversation with them about your budget to help them prioritize their wish list. This is a great opportunity to begin teaching your kids healthy money habits.
Additionally, if your relatives shower your children with more gifts than you’d like, consider asking them to divert some of that money toward a donation to your child’s 529 plan/educational fund. We also hide extra gifts the day after and bring back out later in the year for that “new toy” feel.
Christmas decorations on a budget
7. Keep it simple.
You don’t need to go overboard with decorations in order to embrace the holiday spirit. In fact, keeping things simple might actually help you enjoy the holidays more! There will be less clutter to unpack, string up, and put away once the holidays are over.
A Christmas tree, wreath, stockings, holiday welcome mat, couple plaid pillows, and my grandmother’s nativity set are our “every year” decorations. We try to keep things reasonably simple, so the decorating process isn’t overwhelming.
Obviously, keeping decorations to a minimum will also help you save money because there’s less to buy, store and replace.
If decorating for the holidays gives you joy, then by all means, go all out (please post pictures)! But if it feels like a burden, it may be time to update your tradition. Ready to make a change? Keep the decorations which are most important or sentimental to you, and donate the rest.
8. Repurpose everyday (or consumable) items
Shop your home for holiday-themed decorations before you buy. Have any holiday-colored candles, pillows, linens, or other décor already? What about any chunky knit neutrals, winter plaid or faux fur throw blankets? If so, bring those front and center for the holiday season! Best of all is the cost: $0.
I like to decorate with consumable products when I can, since they serve a dual purpose. For example, my Fall decorations include a variety of winter squash and pumpkins, which we later eat.
9. Make your own decorations
Pinterest and YouTube to the rescue!
The best way to save money and have a little family fun is to create something yourself. There are thousands of tutorials on Pinterest and YouTube that can help you make pretty much anything your heart desires. Here are a few DIY ideas that I love:
DIY holiday wreaths
Christmas wreaths can be really expensive to buy, so making your own in a great way to stay on budget. If you want to keep it traditional, you can get fresh greenery from your local Christmas tree farm (or your own yard, if you’re surrounded by pines) and make a classic wreath using little more than a bit of wire and a big red bow. Wholefully has a nice tutorial on this.
If you prefer something a little fancier (and that will last for many years), check out this DIY faux farmhouse wreath tutorial from Cotton Stem.
10. Shop for next year’s decorations (very) early
The best way to find a great deal on store bought decorations is after the holiday is already over! Most stores mark down their holiday items by up to 75% off as soon as the holiday is over.
What does this mean for you? It means that if you plan accordingly, and are willing to wait, you can buy next year’s decorations at a hefty discount. Because some stores are better at managing inventory then others, the options may be limited, so this approach is riskier. However, if the item you really want is sold out, chances are good that it will be restocked and available for purchase next year. It doesn’t hurt to try and get a deal.
By the way, this strategy works for all holidays. We regularly buy perfectly good Halloween and Valentine’s Day candy (even Godiva) at 50% – 75% off the day after.
I’ll also regularly restock our wrapping paper or other holiday items after the season when everything goes on sale. Even better, save gift bags and bows that are still in good shape to reuse for next year. It’s great for your budget and the planet!
Parties
11. Make it a potluck or an “open house” party
You can host a great party and still keep costs down by making it a potluck or keeping it to appetizers with an open house party. These types of parties are usually a lot less stressful to host as well, as the effort and cost are much lower than a full dinner party.
12. Serve a signature cocktail
If your guests are drinkers, serving just one signature cocktail will keep it festive and help to stay within budget. Hosting a party early in the day will also help to keep drinking down. I always suggest having a few bottles of beer or wine on hand as a backup, but keep in mind your guests are likely to bring drinks as well, which you can then serve.
13. Borrow or rent what you need
If you need extra chairs or service items for a party, seek out friends and neighbors before you buy something new. Most people have punch bowls and serving trays they only use once a year, and almost everyone has a few folding chairs tucked away somewhere that they could lend you. If you strike out on the freebies, you can often rent what you need. This will help you save money and is more sustainable.
Budget-friendly Christmas activities
14. Gift the gift of your presence
I saved the best tip for last! It’s easy to get wrapped up in the commercialism of the holidays, but it’s important to remember what this season is all about.
Make this time of year extra special by giving your loved ones the gift of your presence. You don’t even need to spend a lot of money! Just put down your phone and spend quality time with your family and friends… making memories.
There are literally hundreds of family friendly activities that can help you celebrate the Christmas season on a budget. Here are a few of our favorite holiday activities, which can all be done for little or no money:
- Baking and decorating cookies – we do this every year!
- Family hike in the woods (bonus points if there’s snow)
- Drive or walk different neighborhoods to see holiday lights
- Build a snowman or go sledding (requires snow)
- Make holiday themed art (see also DIY decorations above)
- Go caroling
- Make fancy hot chocolate to enjoy by the fire or fire pit
- Have a Christmas movie marathon
- Build a gingerbread house (can buy a kit or make from scratch)
What are your favorite tips for celebrating Christmas without blowing the budget?
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