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holiday budget

How to Plan Your Holiday Budget

In this article I am going to give simple tips and steps for how to plan a holiday budget. Save more money and have less stress and more peace and joy this holiday season by creating and sticking to a holiday budget this year!


Tip: Press the easy button by grabbing your free copy of the FREE holiday budget printables below!




Want help with budgeting in general? If you are new to budgeting or want more help with budgeting, check out this article with tips for how to rock your first (or next!) budget! Also find awesome information on how to stick to your budget here. And you should also check out the complete  Beginner’s Guide to Budgeting.


Tip: Save the image above (found at the top of this article) to Pinterest so that you can easily refer to these tips for how to plan a holiday budget again later!


Holiday Budget Planning

One of the best things that you can do to stay on budget during the holidays is to plan for them well in advance. For example, for our family we have a special Christmas savings account—and I recommend that you set one up, as well! 

Pro tip: We also have separate savings accounts for many other budget categories; this helps us ensure that we do not spend money intended for one budget category on something else, and it also helps us easily see how close we are to reaching different financial goals. See the various budget categories that we save money for (and that I recommend you save money for, as well! :)).

Creating Your Holiday Budget

Before I dive into the categories that you should include in your holiday budget and give tips for how to save money on Christmas and stick to your holiday budget, I want to mention that in this article when I reference the holiday budget I mean it to refer to the holiday—the best holiday: Christmas! So in this article, “holiday budget” is synonymous with Christmas budget. 🙂

The first step to creating your holiday budget is to decide how much you can afford to spend overall for Christmas. Because I am all about financial freedom and debt freedom, I am going to urge you to not go into debt for Christmas if you can possibly help it.

In order to stay on budget, next choose what expenses you are going to have related to the holiday. Then by knowing how much money you have overall that you can spend on Christmas, you can determine how much you can afford to spend for each category related to the holiday.

I will discuss common categories for Christmas spending below.


Categories to Include in Your Holiday Budget

There are many categories you may want to include in your holiday budget. Here are some of the most common ones that you might want to consider.

Pro tip: All of these budget categories listed below are included in the Holiday Budget Planner! If you have not signed up to receive it yet, you need to! It will help ensure that you save time, money, and sanity this holiday season! 🙂


Christmas Presents

Of course I included this item first! For most people, purchasing gifts where they spend the most money from their holiday budget (unless they fly to visit family, for example). When it comes to buying and giving Christmas presents, be like Santa! Make a list, and check it twice!

Make a Christmas Gift List, Like Santa!

One effective approach to planning your Christmas gift giving (and yes, you do need a plan!) is to first write down all of the people that you hope to give presents to and to then jot down an estimated price for the gift or gifts for that person or family. In order to stay on budget, adjust the numbers if it looks like you will be overspending.

People that you may have on your Christmas gift list could include:

  • Grandparents
  • Parents
  • Children
  • Other family members
  • Friends
  • Others

Since buying presents is one of the areas where people are most likely to overspend and go into debt, I am going to issue this invitation one more time: Please consider enjoying a debt-free Christmas this year. So if you cannot afford it, don’t buy it! It’s a crazy concept, I know, but the benefits are huge!

Pro tip: For more ideas on how to save money on Christmas gift giving and other Christmas-related expenses, check out this article on how to save money on Christmas.

Just for comparison’s sake, our family, which consists of my husband and I and our three young kiddos (ages 6, 4, and 4), generally spends about $300 or so on Christmas gift giving.

One of the reasons that that amount is as low as it is is that we focus our Christmas gift giving primarily on our children; my husband and I do not spend a lot of money on each other (probably $20 or less, on average).


Consider Doing a Christmas Gift Exchange to Help Keep Your Holiday Budget in Check

Another way that we save money on Christmas gifts is that, for both of our families, we do a single gift exchange, where each of the sibling families buys for another sibling family (or our parents).

If your family still buys gifts for everyone, consider asking that you exchange names, instead—especially if you are in debt or are otherwise in financial dire straits. In my family we do this as a Secret Santa and we all get together to have dinner and exchange the gifts, which makes it a lot of fun.


Consider Other Important Expenses

I know that $300 is quite a bit less than the average amount that Americans spend, but I am OK with that! When our children graduate debt free from college because of the money we saved for their college educations, they will thank us one day. 🙂

And you know what? They do not feel deprived because they don’t have expectations for tons of big and expensive gifts at Christmas. That is something that we (collectively) as parents promulgate, not the kids.


Check out these related articles:

Charitable Giving

Giving to those in need is a wonderful way to give back to society and to follow the example of He whom we celebrate this holiday season—the very reason for the season, our one and only Savior, Jesus Christ. Even if you feel like you can give only a small amount, every little bit helps. 🙂

Be sure to include this important item in your holiday budget.

Holiday Food

In this category, budget for your main Christmas meal (lunch or dinner, Christmas breakfast (if it is a special meal that costs much more than normal), and groceries for baking delicious and fun Christmas treats!

If you also have a special meal for Christmas Eve, as many people do, that will cost much more than a normal family meal, then add that expense to your special holiday budget, as well.

Pro tip: Learn more than 70 ways to save money on groceries—without having to use coupons!


Restaurant Meals

If you have a tradition where you eat out Christmas Eve or for some other special occasion related to the holidays that is more than your normal eating out budget category, then make sure to add this expense to your holiday budget.

Pro tip: Learn how to save money eating out!


Christmas Furnishings and Decorations

If you plan to purchase a new (or live) Christmas tree, Christmas lights, Christmas ornaments, garland, tinsel, Christmas dinnerware, or similar items, make sure to include them in the holiday budget.

    Family Photographs

    If you have a tradition of taking family photos during the holidays, be sure to budget for that expense.

    Christmas Cards

    Remember to include Christmas cards in your holiday budget, as well. (Unless you send all of your holiday cards electronically or something. :))

    Holiday Travel

    If you plan to travel around the holidays, then don’t forget to include this expense in your holiday budget. Be sure to include airfare, vehicle fuel, hotel or other accommodations, and other travel expenses as needed. (If you have a lot of debt that you are working to pay off, consider staying closer to home this year.)

    Holiday Entertainment

    The cost of holiday entertainment can quickly get out of hand, so be careful with this one. Think about how many parties you really want to host (and how many you really want to attend), and plan accordingly. It is OK to politely decline some invitations; you cannot do everything, and people understand that it is a busy time of the year.

    As you plan your holiday entertainment budget, consider items such as family gatherings and parties, Christmas dresses and outfits for the adults and kids, traditional activities, movie theater outings, and the like.

    Pro tip: Read this article to discover awesome tips for how to save money on entertainment all year long!

    Holiday Activities

    Traditional holiday activities might be going to see The Nutcracker or other holiday plays. It could include going sledding, snowmobiling, skiing, or ice skating. It could be buying warm gloves and hats or blankets or other items and giving them to people in need. Whatever your family traditions are for holiday activities, be sure to budget for them!

    Other/Miscellaneous Holiday Budget Categories

    If there are other budget categories that you routinely spend money on during the holidays, be sure to include them in the holiday budget. (And leave a comment below to let me know what they are; I may want to add them to this list! :))

    Final Thoughts on Planning Your Holiday Budget

    With this list of holiday budget categories, you can create an effective holiday budget that will work for you and your family! By identifying and tracking your holiday expenses, you will succeed at saving money this holiday season (and maybe even enjoy a deft-free Christmas season)! It will take just a little time and effort, but you can do this! And the reward will be no paying for Christmas for months to come! Yay!

    Want even more help? If you are new to budgeting or want more help with budgeting, check out this article with tips for how to rock your first (or next!) budget! Also find awesome information on how to stick to your budget here. And you should also check out the complete  Beginner’s Guide to Budgeting.

    What questions do you have about creating a holiday budget? Have you tried to budget before and not been able to stick with it? What are your biggest budgeting challenges or hurdles? Leave a comment below and let me know!


    Invitation to Share

    Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

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