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Christmas on a budget

While Christmas can be a time of joy, it can also be a time of financial pressure. However, the good news is you don’t have to spend a lot of money to have a Merry Christmas.

Here are our top tips for how to do Christmas on a budget:

1. Make a list of who you are buying gifts for and how much you need to save

First, make a list of who you plan to buy gifts for, and the maximum amount you are willing to spend on each person.

2. Open up a designated Christmas savings account to use as a sinking fund

Some people use “sinking funds” as a way to prepare for the holiday season. A “sinking fund” is a fund or account setup to be used primarily for spending on a certain occasion or thing.

Open up a separate savings account specifically for holiday savings and name it accordingly.

When the time comes to spending these funds, transfer the sinking funds into your spending/checking account and you’re ready to go!

3. Don’t forget to factor in travel expenses

When creating your budget or “sinking fun”, include any travel you expect or expenses that may pop up, like food for a holiday meal.

A good rule of thumb is to set aside a little bit more than what you’ve calculated for those “just-in-case” moments, like forgetting to buy a gift for someone or accidentally burning the ham.

4. Plan your Christmas shopping ahead and shop smart

if you have a game plan, it’s much easier for you to stick to your guns.

If there is still time, shop locally online. This means you’re not tempted by in-store sales, you’ll get your presents in time and you’re also supporting local! If you decide to go to a store, then plan ahead. Map out what days you'll be shopping, what stores you'll be visiting, and what you'll be buying.

5. Think differently this year

The COVID-19 pandemic has shown people the huge importance of friends and family, and, in lockdown, many people missed social interaction more than material possessions.

So, when thinking about Christmas presents this year, keep this in mind. Could you plan a summer picnic in the park with friends, rather than exchanging gifts?

Or maybe baking became your newfound hobby during lockdown! You could whip up some homemade tasty treats for friends and family for Christmas, rather than buying an impersonal present?

Get the children involved with homemade gifts too. And don’t forget how nice homemade cards and even wrapping paper are. Think of it as a family art session and lesson on budgeting wrapped up in one.

6. Don’t be afraid to talk money

If you really want to buy a gift for someone who always gives you one in return, have a frank conversation this year about what you can both afford.

There’s nothing worse than feeling like you have to buy an expensive gift, so suggest sticking to a budget – it may make you both think more creatively.

Another option for family or friend groups is Secret Santa! This allows you all to agree and stick to a budget for one person.


With these tips, you should be able to put a solid plan in place for the holiday season!

Here's to a happy and financially stress-free holiday!

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