How to Create a Fantastic Yet Frugal Christmas Gifting Strategy

Christmas Gift

Christmas time reminds me of how many people I know and how many people bless my life.

Culturally, Christmas is one of the times that we are to acknowledge the important roles that others play in our lives.  We do this by giving them a gift.  However, for most of us, our list of people who we should buy Christmas gifts for continues to grow, but the amount of money that we’ve decided to spend on Christmas remains the same.

Long Christmas lists and a limited budget often leads to an enormous amount of stress.

But it doesn’t have to be such a financially stressful event.

A Step-by-Step Guide to Creating a Frugal Christmas List that Blesses Others

1. Set your Christmas budget.

How much will you choose to spend on Christmas gifts this year?  The first step here is to decide on something that fits within your budget.  You don’t want to enjoy Christmas in December and pay for it (literally) till the summer.  Don’t be ashamed if you can’t afford much for Christmas.  Set your limits.

2. Write a list of everyone to whom you wish you could give a gift.

Pretend that time and money were no factor.  Yes, it will probably be a long list, but that’s okay.

3. Classify each person on your Christmas list.

Here are some possible ways you can classify each person:

  • Email or e-card – This would be people that you want to take five minutes out of your day to send them a heartfelt thank you for the ways they’ve blessed you.
  • Mail a card – For a relatively low price, you should be able to get a family picture to send, create a newsletter, and print it up at home.  Because the ‘acceptability’ of emails is changing, some people still like the personal touch of a card in the mail.
  • No cost or low cost gift – Items included in this category would be homemade gifts and other craft type items.  These may require a little more of your time, but they are personalized, low cost, or free gifts.
  • Gift card – There might be some people you interact with that the most appropriate thing to do is to get them a gift card.  There are several places online to buy discounted gift cards, so keep that in mind.
  • Traditional gift – Most families enjoy going out and finding a gift that is ‘just right’ for a loved one.

4. Assign a dollar value to each gift or person.

Let’s say you decide to mail out 100 cards. This might cost $1 per person when you include all printing and postage costs.  If that is the case, you’d designate $100 to cards.

Under the traditional gift category, we decide how much we’ll do for each person by relational groups.  We ask how much for parents, how much for kids, how much for cousins, how much for siblings, etc.  Interestingly, in our families, these numbers are different, depending on which side of the family they belong to.  Each family has a ‘giving culture’ that you’ll need to factor into the budget.

5. Check the total.

Add up the total for how much all your gifts are going to cost.  Is the number larger than the Christmas budget you set?  If so, you’ll need to shift some people from one category to another until you make the budget equal to what you’ve decided to spend.

6. Do the shopping and the work as you stick diligently to your limits.

When you go shopping, you should know how much you have to spend for Little Johnny and Uncle Frank.  In order for your budget to hold up, you must stay within the allocated budgeted amounts.

By following this simple step-by-step strategy, you ought to be able to get a loving gift for almost everyone on your list.  Some may receive a card or something homemade, but everyone will know that you love them and thought about them during the Christmas season.

What do you do to create a fantastic yet frugal Christmas?  How do you strategize your giving and spending?  Leave a comment!

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  1. Rich - MoneyWisePastor

    Thanks, Craig, for sharing your frugal Christmas gift giving strategy.

    Early in our marriage, we’d get surprised by Christmas every year. Even though it’s on the calendar every year and always on December 25th – a month after Thanksgiving.

    I’m so glad we decided to set aside money for it each month, instead of letting it surprise us and then wonder how we’ll pay for it all.

  2. Mike

    Frugal? LOL, We celibrate the birth of THE saviour in Church and at home with worship. Happy St Clause day is for the unsaved let them throw away their finances. Yet just another consiquence of heathenism.

    • Anne

      Saint Nicolas is not for the heathen, it is a celebration of the life of Nicolas, Bishop of Myra (Minor Asia)(4th century). Usually celebrated on December 5 or 6th when small presents were given such as a book, or a scarf. Nothing large or expensive, to remember this Saint who helped during his life the poor. And whether you were or are a Roman Catholic or a Protestant (we are!), this day was and still is being celebrated!! (Mostly in certain European countries). The rest of December is just a calm time, and used to be called the month of meditation to think about the birth of Jesus. 1st and 2nd Christmas Days were and still are considered Holy Days. People in the US have changed it and I do not like the American Santa Claus either, he has nothing to do with Christmas. The enemy loves it when people get so terribly busy that they forget the real reason. But give me anytime the celebration of Saint Nicolas on his name day December 5 (or 6) and then celebrate in quietness the birth of our Savior without spending all this money that people do, and all the parties and running around.

  3. Kathy

    We hadn’t bought Christmas presents for about five years, and focused on the gift of Jesus, instead. This saved us a lot of stress; money, too, but that wasn’t our main concern. Anyway, we have decided to buy presents this year as a one-off. We set a budget of $10/person, and I had direct debits taken out of my account to go towards a gift card at a local department store.
    This may not have been the best decision, because many of that store’s items are more expensive than the chain-stores, but the gift-card is valid for 2 years, and they gave me 10% extra credit for using them – better that any bank. Next year, I will have direct debits transferred to my own bank account instead. We probably won’t do gifts for everyone again, but that will cover the other costs of Christmas.

  4. Remy @ Household Budget Geek

    Good post,

    We can all use a little practical advice this time a year. I like to start my Christmas budget in June, I deposit small amounts into a Christmas fund and by the time November rolls around I have a full or nearly full Christmas fund. I’ve been doing this for a couple years now, it’s nice to enjoy the holidays without stress and without going into debt.

  5. gwen

    I love Christmas and I am not a heathen. The spirit of giving relates directly to christ and what he gave for us. It is a chance to give joy to many who have very little or none. In doing so you bring joy to your self and exemplify the spirit of Christ. I am unemployed this year but I still plan to give the gift of joy to others. It takes so very little to do so. If you are careful and search the bargain sites you can shop very frugally and still give nice gifts. I found a 34.00 isotoner scarf for 2.99. The woman who will receive is a victim of domestic violence and homeless. Christmas is not about how much you spend, it’s about what you give.

  6. Jesse @ Live Frei

    I love the ideas about classifying each person on your gift list. One thing that’s started to help us each year is my family and my wife’s family are now drawing names each year right after Thanksgiving. This way each person only buys 1 gift for a family member. They are able to focus on shopping for them and make it count. We also set a budget for these gifts. I think this year it was $35. I’m just so happy that I won’t be facing a monstrous credit card bill in Jan this year. Thanks again for the great tips.

  7. Harshit

    One of the best ways to save money during Christmas shopping is by not gifting your friends, relatives & colleagues expensive things, but rather things that have a personal value attached to them and make the person feel special.

  8. Mindy

    These are some great and helpful ideas! It is too easy to let the stress of money keep us from enjoying what the season has to offer. This is a good way to prevent that from happening.