Managing Holiday gift budgets: How to create a holiday budget

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Find Your Festive Spirit

Most of us are looking forward to the 2020 festive season after a difficult and, at best, complicated year. We hope to spend time with family members we have not seen for many months, and we want to spoil our children. However, few of us can afford to go into the new year with crushing debt.

Stretch Your Budget

The festive season can come with a host of expenses, such as gifts, food, travel, entertainment and decorations. If you don’t want an expensive festive season, it’s crucial to budget. Before you can do this, you need to figure out what’s important about this time of the year to you and your family. Can you adjust your expectations and take part in some more affordable holiday traditions?

Below are some tips on how to enjoy the true meaning of the season this year.

Enjoy Your Holidays More While Spending Less

Discuss your budget with your family and figure out what you want to do this year. Do you need that fancy Christmas light display? Reconsider other expensive activities such as decorating your house and hosting parties. How many of these activities do you enjoy, or are some only habits that make your festive season more stressful?

Great Gift Expectations

Adjust expectations about gifts. Do you need to buy gifts for all your distant relatives and your co-workers? You’ll find that others will welcome your suggestions about fewer and cheaper gifts. If it works for your family, you may even decide only to buy gifts for the children this year. Or draw names and only buy a gift for a specific person.

Getting Value from Gift Sets

Divide large gift sets of lotions, toys etc. into budget-friendly gifts. Put individual items into handcrafted gift boxes, and no one will know it was part of a larger set.

More Affordable Christmas Traditions

At this time of the year, we enjoy sharing certain holiday traditions with our loved ones, some of which can be expensive. Family holidays, outings to the movies and restaurants and big parties will deplete your festive budget.

You’ll find that you can still enjoy your family’s company while taking part in the following inexpensive activities. You may even enjoy your festive season more this year.

Decorating the house as a family.
Baking together or doing crafts.
Watching movies at home with Christmas snacks.
Viewing the Christmas lights in your neighbourhood.
Reading stories to the kids and playing board games.
Volunteering at charities.

Set Your Limit and Make a List

Decide on a spending limit before the festive season. Only spend money you have available and don’t use credit cards. If you can, try to start saving early in the year for holiday expenses.

Do your best to fit all your holiday spending into this limit. Also, make a list of potential holiday expenses and don’t buy anything else.


You and your family can make some of the items on your holiday list yourselves.

  • If your hobbies include woodworking, knitting or quilting, make homemade gifts for your family and friends. It’s much more meaningful than buying something from the store. If you’re unable to make gifts yourself, try to support local craft markets.
  • Make your greeting cards. You’ll find lots of free card templates online.
  • Make your decorations. Use fresh fruit, pinecones or cut out snowflakes and dust them with glitter.

Christmas Lunch: Share the Work and Expenses

Get each guest to bring a specific dish and share the work and expense involved in the Christmas meal. Your guests will get to sample various foods while only being responsible for a small share of the cost and work involved.

Final Thoughts

Once the festive period is over, assess how well you’ve managed to follow your budget. If your finances have taken a knock, you might need to go on a spending diet for the next few months to free up money to pay off debt quicker.

Don’t beat yourself up about it but start planning now for the next festive season. After you’ve paid your debt (if you have any)start planning and buying for the next festive season in a bid to spread the expenses throughout the year.

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