5 Simple Steps to a Christmas Budget That will Keep you out of Debt

Want to have a debt-free Christmas this year?  If so, then you need to start planning now and you can start with these 5 steps to create a Christmas budget!Time is running short.

You need to prepare now.

It will not be long until Father Christmas is saddling up his reindeer.  Today is the day to decide to make this year a debt free Christmas.

Bob even has 6 tips for a debt free Christmas.

In fact, you are more likely to get through Christmas without any new consumer debt if you set your Christmas budget now.

Step By Step Guide for Making Your Christmas Budget

1Make a long list of everyone to whom you want to give a Christmas gift.

Be sure to include the following groups of people:

  • Family – aunts, uncles, children, spouse, cousins, siblings, grandparents, and even the stray dog your brother-in-law adopted.  Include everyone you WANT to give a gift to.
  • Co-workers – partners, bosses, co-workers, support staff
  • Church friends – Bible school teachers, church staff, grandparent figures
  • Community friends – neighbors, fellow volunteers, clerk at the grocery store
  • Those who provide services – paperboy, mail man, pizza delivery boy, yard worker, pool cleaner, teachers
  • Anyone else – feeling jovial?  Put them on the list.

2Determine how much you can afford to spend on Christmas.

This calculation can be relatively simple.  How much money can you save between now and December 25th? How many of those dollars are you willing to dedicate towards Christmas gifts?

Christmas Spending Rule:

How much you can afford to spend must be an amount you save in CASH.  This is not an ‘if-I-were-rich-I-would-budget-this’ list. This is how much you actually have to give for Christmas.  If the number is low, that is fine.

Christmas is not about financially crippling yourself so someone can have a pair of socks that will go in the trash before January.

Christmas is about expressing love and appreciation.  Both of which can be done without money.  Christmas can be enjoyed without money.

Be sure that your budget is reasonable in relationship to your income.  This can be done by making sure your total amount fits within recommended budget percentages.

3Prioritize your list from step #1.  Make it a short list.

If married, before prioritizing the list, pray that God will give you the patience to work together – not against each other.

You might want to cut out your Great Aunt Sally, but your wife has given her a gift every year for two decades.  She might want to remove a business partner who doesn’t deserve anything, but you want to grease that relationship.  This process could be painful, so prayerfully get on the same page before you start.

At this stage you are just going to separate each name into three groups – paid gift, made gift, no gift. Since you know how much you can afford to give you will have a better sense of how many people can be on your paid gift list.

Knowing your time, available you can limit your made gift list. The others – no gift, but perhaps a Christmas card.

4Assign and complete necessary preparations.

Paid Gift List:

Beside each name on the paid gift list, assign a budgeted amount.  For example, dad might get $50 and cousin Steve $25.  Be sure that total does not exceed the amount in Step #2.  The only rule here is you cannot overspend that amount on that person.  Here are 8 tips to save money on your Christmas shopping.

Made Gift List:

What will you make?  Cookies and other Christmas treats are a great idea for close friends, neighbors, and colleagues.  For family, a customized card with a picture of the kids will suffice.  Need some guidance?  Here is a list of 50 Personalized Christmas Gifts and a few more homemade christmas present ideas.

No Gift:

If they made it on your first list you might just send them a personalized card.

Merry Christmas Uncle Joe.  We just wanted to let you know that you are a special part of our family.  Thanks for all the time and attention you give to our kids.  We’re blessed to have an uncle like you.

5Make the budget work.

Don’t spend more than you budgeted.

If your budget is tight, you will need to capitalize on a free valuable resource – CREATIVITY.  Creativity must be combined with another necessary ingredient – TIME.

Time + Creativity = Awesome Valuable Christmas Presents for a Lower Price

How do you set your Christmas budget?



















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10 Comments
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  1. Craig, great tips. We use the envelope system for Christmas spending. Once we’ve identified how much we have to spend, and for who we plan to purchase a gift, we create a cash evenlope for each person. I really like your tip: paid, made, no gift (card, etc.)

  2. Great post, Craig. Christmas is something that we try to budget and plan for every year. I think you’ve hit on the keys for us, which is shop with a plan and prioritize. Last year we actually completed all of our shopping in one day—we went out and braved the stores on Black Friday and then finished up online, through Amazon, etc. It doesn’t have to break the bank!

  3. @ Jason. The envelope system is a great idea! It would be a good way to help you stick to your budget.

  4. I agree it doesn’t have to break the bank. I was able to get all my gifts for a little over one hundred dollars (it helped that only 9 people made the bought gift list). It would have come in under $100, but I had to get the perfect bible for my curious friend. If she reads it I’ll consider it to have been a bargain at any price.

  5. I would emphasize the importance of starting this system in January so come December there will be no “panic attacks”.

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