How to Do Christmas on a Budget

INSIDE: Everything you need to know to plan a festive Christmas on a budget!

Americans are expected to spend about $30 billion in the 2020 holiday season, according to the National Retail Federation — with individual consumers projected to spend $997.79 on presents, food, decorations and all those little “non-gift” expenses that sneak up on you.

That’s ONE THOUSAND dollars! Were you planning for that?

It’s so easy to let your holiday spending add up, especially this year when we’re all craving some joy and sense of normal. Still, it’s important to keep your family’s bigger-picture budget in mind and not let the holidays derail your plans to save money and reduce debt.

But you don’t have to be grinchy about spending responsibly! Here, we’ve compiled all of Penny Pinchin’ Mom’s favorite ways to keep your Christmas spending in check and still have lots of family fun during the holiday season.

Christmas Gifts on a Budget

One of the smartest things you can do to protect your Christmas spending is to give up on the myth of having a “perfect Christmas.” Nothing is perfect — including the holidays! So relax your expectations and enjoy the season within your budget.

Get your family on board with your plans by teaching your kids about having a holiday budget. The holidays are a great time to model good financial habits for your kids — if you need a budget, so do they! Have them list out everyone they want to give gifts to and help them assign costs to those gift ideas. If the total cost is out of their gift budget, that’s a teachable moment right there.

If you have a big family or your extended family has the tradition of getting everyone gifts, ask them if they’re willing to scale back the gift exchange. Chances are they’ll be grateful for the suggestion. Options could include giving presents just to the children, setting an inexpensive dollar limit on gifts, requiring gifts to be handmade or recycled, having everyone buy one single gift for one other family member (you can draw names out of a hat to match people up), or playing a game of white elephant with budget-friendly novelty items.

Finally, don’t forget about the little gifting costs that can add up, like stockings. Fill Christmas stockings with small things your family actually needs, like a gas fuel card for a teenage driver or a pacifier for your little one. And new socks aren’t exactly exciting, but hey — we all need ‘em!

Wrapping paper, gift bags, ribbons, bows, and gifts tags are another way to drop way too much money at the drugstore. Instead of buying your wrapping supplies, use what you have around the house. Newspaper, butcher paper, and even old maps work great as wrapping paper, and you can make your own gift tags as a kid-friendly craft.

Is Black Friday Shopping Worth It to Save Money?

Can you truly stretch your holiday budget by shopping the day after Thanksgiving? Our short answer is yes — but only if you enjoy shopping around other people, and there are some important things to keep in mind. For one, you might not get the best deals that day. Some products are actually cheaper during other times of the year. And Black Friday deals are hardly limited to one day anymore. You should keep an eye on prices during the weeks leading up to Thanksgiving and then in the weeks afterward. You never know when you’ll find the best deal!

Keep in mind that most of the holiday shopping sales you find in a store will also be available online. If you do decide to shop in person, be sure to go prepared with a list and don’t give in to the temptation buying  “deals” you don’t really need!

Christmas Decorations on a Budget

Your biggest expense on Christmas decorations every year is your tree, right? You can get rid of those future expenses with the upfront cost of buying a lush artificial Christmas tree this year. Fake trees might not have the romance of a freshly cut evergreen tree, but they sure are convenient — and many of them come with lights so you don’t have to worry about untangling all the cords from last year. Bonus: They don’t shed needles everywhere!

You can usually get good deals on artificial trees in the first two weeks of December, so hit up your big-box store for a sale then.

For outdoor decorations, a simple wreath can announce your family’s holiday cheer without the expense and time (and utility bills!) of stringing Christmas lights all over your house. You can make your wreath unique to your family by using favorite old ornaments you don’t hang on your tree anymore (or buy a cheap set of matching ones at a dollar store). If you have a live Christmas tree, save the trimmed bottom branches to fashion into a wreath or holiday swag.

More budget-friendly decorating ideas:

Budget-Friendly Holiday Activities and Crafts

Winter is a great time to snuggle in, but boy, can the kids get restless! If you’re not already using the Elf on the Shelf to keep some law and order before Santa arrives, check out this explanation of Elf on the Shelf and 25 unique ways to use the elf around your house.

And here are some inexpensive Christmas crafts you can do to spend time together as a family. The finished products make nice decorations you can use year after year. As time passes, they’ll become special mementos of when the kids were little.

DIY Snowman Treat Jars

  • This one doubles as a thoughtful last-minute gift. Fill with the recipient’s favorite guilty-pleasure candy.

DIY Easy Christmas Tree Shirt

  • Need a holiday shirt for spirit week at school? Just add ribbon.

DIY No-Sew Santa Aprons

  • These are cute gifts for bakers or just fun for the family to wear as you’re spending time together in the kitchen.

Candy Cane Reindeer Craft

  • Decorate your tree or even dress up a special package with this cute craft project.

DIY Mason Jar Snow Globes

  • Since you get to choose what goes inside the mason jar, try making scenes that represent what your family was up to this year. Eventually they’ll be like a holiday time capsule!

Snowman Donuts Snack (Easy Kids Craft Idea)

  • Here’s a cute craft your kids can make … and will enjoy eating as they go.

Easy “Snow” Slime — DIY Clear Slime

  • This takes just three ingredients and doesn’t stain everything it touches, unlike other slime recipes I’ve tried.

DIY Santa Cups With Reusable Belts

  • Dress up some red Solo cups to look like Saint Nick — these are great for party drinks or serving popcorn on family movie night.

16 Gorgeous DIY Christmas Ornaments

  • Scrabble tiles, burned-out lightbulbs, and even twigs from your yard can be transformed into special memories you hang on your tree year after year.

Ornament Painting With Upcycled Potatoes

  • Potatoes cut in half make great stamps for art projects with kids! Your personalized potato stamps can be a fun way to make your own wrapping paper, gift bags, or even Christmas cards.

DIY Pom-Pom Christmas Trees

  • These are festive little table-top trees you can make in any color of the rainbow to brighten up your Christmas decor.

Cardboard Tube Snowman

  • Don’t throw away your toilet paper tubes — they make cute little snowmen with some glue and construction paper.

DIY Santa Gift Tags and Paint Chip Gift Tags

  • Save money on gift wrapping accessories with these homemade gift tags.

Scrap Ribbon Christmas Tree Ornament

  • Have extra ribbon around? These easy ornaments are great for your tree or for adding flair to a special Christmas present.

Old Fashioned Candy Ornaments

  • Here’s a guilt-free way to enjoy those old-timey hard candies without eating the whole bowl: Turn them into a Christmas decoration.

How to Save Money on Christmas Cards

If you’re on a tight budget, there’s nothing wrong with skipping sending holiday cards this year. (You’ll get a lot of time back in addition to your money!) But if you’re set on sending greetings to your far-flung loved ones, it doesn’t have to cost you a small fortune in postage: Try sending a digital card! E-cards are significantly cheaper than the traditional Christmas cards you pop in the mail, are better for the environment, and don’t require you to round up Aunt Bernice’s new address.

If you’re not sold on going totally paperless, try a less expensive postcard option or buy your cards in bulk to save money.

Christmas Dinner on a Budget

If you’re used to serving a big fancy dinner on both Christmas Eve and Christmas Day, an easy way to save your budget is to pick just one special meal.

And that meal doesn’t have to be the traditional goose or (really spendy) honey baked ham. Anything warm, savory, and made with love will hit the spot. The easier the better! Think a brisket you can throw in the oven or hearty soups you can make in a pressure cooker or crockpot. I love to make a stick-to-your ribs beef stew for Christmas dinner, and my sister prepares Swedish meatballs with gravy for Christmas Eve. And you can get a little fancier with an after-dinner dessert that really makes the meal.

How to Cook a Brisket in the Oven (And Still Get That Smoky Flavor)

  • You can skip the expensive cuts of meat and still create a tender, flavorful main dish for a crowd.

15 Savory Soups You Can Make in Your Instant Pot

  • Save time and money by serving soup for Christmas dinner, like a decadent French onion soup. These options come together in a snap in your pressure cooker. Pair them with some crusty bread and call it a meal.

Slow Cooker Tomato, Vegetable, and Beef Stew

  • Stew meat is inexpensive and packs a ton of flavor when it simmers with your favorite veggies.

Homemade Chicken Pot Pie

  • A buttery, flaky pastry crust on top turns any meal into a special occasion!

Simple Recipe for Swedish Meatballs

  • The creamy gravy on these traditional Scandinavian meatballs feels like a spoil-yourself treat. For extra authenticity, serve them with lingonberry preserves, which you can pick up for cheap at IKEA!

Easy Christmas Tree Cake

  • The decorations on this dessert look like they took you hours (but that can be our little secret).

Christmas Brunch on a Budget

Dinner may be the most traditional Christmas meal, but of course it’s not your only option to celebrate around the table. Consider forgoing dinner and having a relaxed, more-affordable Christmas brunch instead. Here are a few easy, budget-friendly recipes perfect for post-gift munching and brunching.

Christmas Fruit Tree

  • For something light, make an edible “tree” out of kiwi slices and berries.

Grinch Fruit Kabobs

  • Put a green grape and a raspberry together on a toothpick and watch your kids eat up this light appetizer.

Pumpkin Pie Dip

  • This tastes just like the pie but is ready in 10 minutes.

Rhodes Caramel Rolls

  • Make these rolls before you go to bed, and they’ll be ready for baking when you get up in the morning.

Eggs Benedict Casserole

  • Using pre-made English muffins and prepping this hearty breakfast dish the night before makes serving it a cinch on Christmas morning.

Sausage Hashbrown Breakfast Casserole

  • Here’s another one you can make the night before (are you sensing a theme here?).

Oven-Baked French Toast

  • Get food on the table faster by making your French toast in a big tray in the oven instead of on the stove. Goodbye, making just three slices at a time!

Christmas Tree Waffles

  • If you have a circular waffle iron, you can make these tree-shaped treats that your kids will love.

Christmas Tree Pizza Bombs

  • Just 15 minutes and this edible table centerpiece is ready to go.

Pumpkin Muffins

  • The cream cheese frosting is just enough to be a sweet treat.

Starbucks Lemon Loaf With Icing

  • Just like at the coffee shop but at a fraction of the cost!

Copycat Pumpkin Spice Latte

  • Get the same yummy fall flavors without setting you back $5 a pop.

Caramel Vanilla Latte

  • If you have caramel syrup, you can make this sweet treat at home at a fraction of the coffee house cost.

Homemade Coffee Creamers — Hazelnut, Almond Joy, Peanut Butter Cup and More

  • Those premade coffee creamers are delicious but so expensive, particularly with how fast we go through them at my house! Make your own to save money and try some new flavors, too.

How to Save Money on Holiday Baking

Holiday baking with family is the best, isn’t it? My earliest memories in the kitchen are of decorating Christmas cookies with my siblings and “cousins,” licking frosting off our fingers and eating more sugar cookies than we ending up decorating.

Stock up on staples like flour, butter, and sugar (watch for BOGO sales leading up to the holidays, or shop smart and get pantry items at Aldi, where they’re seriously cheaper). You’ll always be ready for fun family baking time.

Bonus: Your handmade cookies and sweets can double as thoughtful gifts for neighbors, teachers, coaches, and anyone you need to grab a last-second present for. Have the kids decorate the rim of a paper plate, put the sweets inside, and cover with clear plastic wrap. The paper plates are cheaper than giving away plasticware and can keep the kids busy as they decorate.

Here are some of my favorite Christmas sweets from over the years:

Chocolate Peanut Butter Bon Bons

Reindeer Cookies

Homemade Peppermint Bark

16 Peppermint Cookies and Treats

15 Super Cute Santa-Inspired Desserts

20 of the Very Best Cookie Exchange Recipes

Snowman Cupcakes

Reindeer Cupcakes

Christmas Tree Brownies

Candy Cane Kisses Thumbprint Cookies

Easy Christmas Tree Cupcakes

Peppermint Vanilla Cupcakes

Gingerbread Snowflake Cookies

Grandma’s Homemade Spice Bars

Tips for Returning Christmas Gifts You Don’t Want

Get something you’ll never use? Those return receipts are there for a reason — whoever gave you that present wants you to enjoy their generosity. So don’t feel bad about returning the item and exchanging it for something you like better or actually need — or for store credit at a place like Amazon. Think of it as saving money on things you’d need to buy in the future anyway.

Benefits of Sticking to Your Christmas Budget

You don’t need to go into debt to have a magical Christmas. Remember that Christmas is just one day … and if you can stick to your spending limit, you’re giving your family the gift of solid financial footing the whole rest of the year.

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