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save money on Christmas

How to Save Money on Christmas

Fortunately, there are many things that you can do if you are looking for tips on how to save money on Christmas. In this article I am going to share 11 of them.


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Why Look for Ways to Save Money on Christmas?

Now, don’t get me wrong. I love Christmas as much as the next guy or gal—really! But the spending on Christmas these days is just over the top! It’s one day of the year! Granted, it’s a very important day of the year. If you’re Christian like me, it’s one of the very most important days of the year. But it’s not primarily because of the tinsel and shiny baubles and toys and gadgets and all the stuff.

The average American family spent about $970 on Christmas last year. That’s about $700 more than we spent on Christmas for all of our gift giving. And that’s not because we’re scrooges, but because we do realize that Christmas is just one day a year and we would rather spend our money on experiences than stuff and on other things that align more with our values.

For example, we maxed out our three children’s education savings accounts last year. Now, that is a gift that will keep on giving throughout their lives! And because they are still very young (six years old and four years old, respectively—the youngest two are twins), that money will have close to two decades to grow and benefit from the amazing power of compound interest.

We also maxed out my Roth IRA and invested in my company 401(k) up to the match and beyond. And we paid for some fairly big home renovation projects with cash. If we had just been average or normal (which when it comes to your money, you really should try not to be normal, since normal isn’t a great place to be when it comes to your finances—normal is living paycheck to paycheck), we would have had about $700 less to spend on those important things.

When our kiddos have no student loans, no car loans, and no credit card debt (because we’re going to work hard to teach them to avoid debt and also teach them the power of being content and of not being too attached to stuff), I don’t think they’ll mind that we didn’t have extravagant Christmases. In fact, I hope one day they will thank us. 🙂


11 Simple Tips for How to Save Money on Christmas

Here are 11 simple things we do—that you can do too!—to save money on Christmas.


1. Set a Christmas budget.

One of the most important ways to save money on Christmas is to set a reasonable Christmas gift-giving budget. Of course, what is reasonable to spend for Christmas varies widely from family to family. For us, we’ve decided that $50 per person for Christmas spending is what is reasonable.

I know of a couple of other families who have chosen that number as well, and I know of some families who have chosen more than that. And I think many (perhaps most?) families don’t really budget for Christmas at all, and instead they just try to mitigate the damage and brace themselves the credit card payments that will come in January.



2. Make a Christmas shopping list.

Another important way to save money on Christmas is to make a Christmas shopping list. As with everything else in life, you will achieve the best results if you are intentional—so plan to be intentional with your Christmas spending. Like Santa, make your list, and check it twice. 😊

After you figure out how much money you can reasonably afford to spend on Christmas, figure out the number of people you need to buy gifts for and how much you will spend on each person, and write it all out. And then stick to your Christmas budget.


3. Set reasonable expectations with extended family and friends (such as doing a Christmas name exchange instead of everyone buying everyone else a gift).

To save money on Christmas, don’t be afraid to talk with your extended family about what is reasonable for you to spend each year given your overall budget and financial situation. If you are in debt, consider keeping your Christmas spending minimal so that the money can instead be used to help free you from debt.
With our extended family, we no longer buy gifts for each person, since our families are growing. We exchange names and set a spending amount, and we spend that much on the family whose name we chose. For the last couple of years the amount has been $60, and that has worked well to be able to get a few gifts for the families with kiddos or one nicer gift for siblings who aren’t married or who are married with no children.

And for friends, we don’t really exchange gifts. What we do with some of them is get together for a nice potluck Christmas dinner or for a movie night. It’s spending time with the people I love that I appreciate even more than a thoughtful gift.


4. Consider buying and gifting used toys and clothes to the kids (and yourselves).

You can also save a ton of money on Christmas shopping by giving used items. If you’ve been a parent of toddlers or young kids for longer than 10 minutes, you probably figured out that they’re pretty rough on their toys (and everything else).

So the way I see it, I don’t need to spend $20 on a toy that might only last a few days or weeks or months when I can buy it used and spend $2. Then I won’t feel as bad when it gets broken. (Though they still feel just as bad. :-\)

And young kids don’t even know when something is used or not—they can’t tell the difference. And even older kids, such as our soon to be six-year-old, don’t have to feel that new is better.  We have never taught her our kids to think that way. If anything, our kiddos might grow up thinking that used is better (I hope they do!).


5. Consider giving baked goods as inexpensive Christmas gifts.

Another great way to save money on Christmas is to give home-baked treats as gifts. I don’t know about you, but I love to bake during the holidays. There’s just something about Christmas and baking that feel like they go hand in hand!

It might be partly because I don’t like to go outside much during the winter (I would hibernate all winter like a bear if I could!), but I think it’s also that it just helps our home to feel warm and cozy—and smell amazing! There are so many fun treats to make, and it’s great to also give them away so that we don’t eat them all ourselves. #sweetsgostraighttomyhips


Check out these related articles:

Do a No-Spend November to Save for a Debt-Free Christmas!
5 Super Simple Steps to Save $1,000 for a Debt-Free Christmas for Next Year
5 Simple Steps to Save for a Debt-Free Christmas in Just Two Weeks!
4 Powerful Principles of Gratitude to Change Your Financial Life
Contentment: 9 Powerful Principles That Lead to Financial Success
19 Awesome Tips to Save a Ton of Money on Utilities This Winter
61 Free and Cheap Winter Activities for for Kids
55 Fun, Inexpensive Winter Date Ideas

6. Consider regifting.

You can also save money on Christmas by regifting. If we receive a wonderful gift from someone that we’re just not going to use (I assume that happens with some of you, too, with gifts from well-intentioned family and perhaps friends), we’re OK giving it to someone else who will appreciate it. Reduce, reuse, recycle. 😊


7. Do your Christmas shopping online.

For another way to save money on Christmas, shop online. That way, you will know exactly how much you are spending so that you won’t overspend your Christmas budget. Not to mention it’s just easier and quicker (in terms of actual time spent shopping).  A couple of years ago, I had all of our Christmas shopping done by Cyber Monday, and I bought everything online. I did not even leave the house to buy any of it. It was awesome.

8. Plan simpler Christmas dinners and parties.

As I mentioned above, we like to have gatherings with family and friends during the holidays, but we don’t go overboard. You might want to save some money (and your sanity) this Christmas by scaling back a little yourself, especially if you routinely find yourself overcommitted or overextended during the holiday season.

The gatherings we have with family and friends are often potluck dinners, and they’re pretty informal and low key. But that doesn’t keep them from being fun! In fact, I think it makes them more fun, because there isn’t one person who has the responsibility of planning and paying for the whole thing.


9. Consider giving Christmas gifts just to the kids.

Another way that you can save money on Christmas is to keep the gift giving for the kids, whether in your immediate family or your extended family. In many cases, it’s the kiddos who have the most fun receiving gifts anyway. For my husband and I, some years we get each other presents, and some years we don’t. It depends on if there’s anything that we really want at the time. When we do buy each other gifts, they’re generally pretty inexpensive, since we’re both savers (now; that was not always the case, at least for me :)) by nature.


10. Learn to be content with what you already have.

You can also save a ton of money on Christmas when you are already truly content with what you already have. Another reason that my husband and I don’t feel a need to go crazy buying stuff at Christmas is that we are already happy with what we have. We already have plenty of stuff—all of what we need and much of what we want. So there’s no reason that we have to buy more. (Hint: And there’s no reason that you have to, either. 😊)

Read this article to learn more about the amazing power of contentment.



11. Consider opting out of the jolly big lie.

I know I may get some flack for what I am about to share, but please hear me out and think about the benefits of making this same decision for yourself before making a judgment about it.

When our first daughter was probably about a year old, I was talking to a few coworkers at our annual Christmas luncheon. Somehow we got talking about Santa, and I mentioned that I didn’t like the idea of lying to my kids and acting like Santa was real when he’s not. I’m not a perfect parent (I so wish I were better!), but I want my children to be able to trust that what I say is true to the very best of my knowledge. And even though it’s easy to brush off this lie of Santa being real as a fun cultural tradition, I just didn’t want to do it.

Perhaps the clincher that made me decide to not lie about Santa being real was that one of my coworkers we were talking with at that luncheon told me a little story about one of her friends growing up. When her friend got old enough that her parents told her that Santa wasn’t real, she asked, “Well, then is Jesus not real either?” That hit me hard.

Now, I don’t want to make it into a bigger deal than it is, but I want with all of my heart and soul to have my children grow up following Christ and trying their best to be like Him—and believing that they can put their complete trust and faith in Him. That’s one of the very most important hopes and goals I have in my life, is that my children will grow up to be faithful followers of Christ.

Having a simple, relatively inexpensive, somewhat lower key Christmas aligns with our financial values, and it also aligns with our values as Christians. I want Christ to be the center of our Christmas, and by not making such a big deal of the big red guy, it’s easier to not have Christ completely overshadowed by Santa.

And it’s also easier to keep expectations realistic in order to save money on Christmas. When you teach your kids that there’s this magical guy who’s there to fulfill their every Christmas whim, it’s easier to get sucked into the trap of spending more than you should. (And if you’re using credit cards to pay for Christmas and you don’t pay them off that month, then you are spending more than you should.) But when your kids just grow up knowing that you are footing the bill for their gifts, then you can keep their Christmas wishes in check.

And that doesn’t mean you can’t have fun with this Christmas tradition. We love Santa! He’s a jolly old fellow who brings joy to kids around the world. We read stories about him and watch movies about him and hang stockings and all that good stuff. We just don’t treat Santa like he is real—any more than we treat the Paw Patrol or Shimmer and Shine or Princess Sofia or Bob the Builder like they are real.

And I don’t know about you, but even though I love Christmas—I really, really do!—Christmas has just never been the same ever since that sunny afternoon (we lived in California at the time) when my dad took me for a drive and told me that Santa wasn’t real. Christmas has never been quite as magical—there was just something that was lost forever that day. (And I was I think 8 or 9, so it’s not like he was crushing my little heart at a super young age or anything. :)) But by not lying about Santa in the first place, my children will never have that letdown—that wonderful, magical bubble will never be burst.

I feel it’s so important for their long-term joy and contentment that our children learn that it is people and experiences that they should focus on and that really matter and that can bring real lasting happiness, not stuff. Because of our very natures as humans, the value of stuff just doesn’t last most of the time. We get the newest smartphone, and then a year later (or less), there’s a better (more expensive) model out, and our cool phone just isn’t cool enough anymore. Same with video games, computers, cars, toys (the little people kind), boats—anything and everything.

It’s a true hedonic treadmill, where you can get caught up in continually buying more stuff—bigger and better and nicer and shinier stuff—in an endless effort to be happy. But because money is finite, you just can’t buy your way to happiness. Once the shine of the newest thing wears off, then you want something else, and then something else.

It just never stops, and it’s a way to be discontent and unsatisfied your whole life. What you have just isn’t good enough anymore. And that’s the perfect way to stay broke and never save and invest for the things that are so very important, like a comfortable retirement and your kids’ college educations. So let’s not get so caught up in all of that!

 Now, all that being said, I know that many of you will have probably already told your children about Santa, and acted as if he were real. And so I don’t really expect you to then tell your children right away that actually, Santa isn’t real—unless what I say above just really resonates with you, and you want to (gently) let your children know the truth.

But if you want to continue to pretend that Santa is real, if you love the magic of the fairy tale Santa, then that is fine. You can still keep Christmas expectations reasonable and realistic by just saying that, like your family needs to live on a budget to meet all of their responsibilities, Santa has to live on a budget too in order to be able to give presents to all of the millions of children in the world who count on him.

So once your children are old enough to understand to some degree the concept of money, help them to know what gift requests to Santa are feasible given your family’s financial situation, and help guide them toward a reasonable Christmas wish list. To help build their young little characters, steer them to try and think of giving presents as well as receiving them and to not get too greedy in their gift requests.



The holiday season is such an amazing time—it’s one of my favorite times of the year. I feel it really is magical. But it’s not because of the gifts. It’s because of time spent with family, time spent doing fun traditions, and time spent focusing on the Savior. It’s because we can make fun memories and pass on fun traditions to our kids.

You can save money on Christmas if you will please divorce in your mind the holiday season and having to spend a bunch of money. I promise that you don’t have to spend a lot of money to have a great holiday! Your kids will be just fine if they have a few meaningful gifts (or even just one, like one family I know does).

Or instead of gifts, you might give your family meaningful experiences, like going out to dinner or going on a cruise together or a volunteer vacation together. If you spent $500 less than you spent last year, you could put it toward your emergency fund or toward your children’s education savings accounts (ESAs). And then rather than having that much more stuff taking up space in your house, you could move your family one step closer to financial freedom.

Last year we spent about $250 for all of our Christmas gift giving. And yet the kids got a handful of (relatively inexpensive) gifts that they really enjoyed, and we got to focus on the Christmas traditions that really make the season bright for our family.


What do you do to save money on Christmas? What do you feel is a reasonable amount to spend? What do you think about opting out of the big, jolly lie? I would love to hear your ideas and thoughts, so please leave a comment below!


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