How to Budget for Christmas Shopping – Your Guide to Survive the Holiday Season

Yes, it is only just Fall and the leaves are barely starting to change color but before any of us realize it, the snow will be on the ground and Jingle Bells will be playing at the mall (OK, the holiday music will start once Halloween is over).

Budgeting for Christmas shopping now may sound like a chore but it can be the life line you need to avert debt.

Typically when a person goes Christmas shopping and there is no budget, then this gives the illusion of having no limits – and no limits often leads to January credit card bills that hurt.

I’ve heard people talk about how they counted on getting a big tax refund in order to pay for the previous holidays.  Is that you?  That doesn’t sound like healthy finances to me.  It doesn’t have to be that way.

According to a survey from PricewaterhouseCoopers, the projected household spending for this coming holiday season is $684.  Do you have that in your savings, ready to spend on gifts?  Some people do.  A lot of people don’t.  And where they tend to turn to are credit cards (read: debt).

Designing a budget helps you to avoid that steep downhill in January; and this helps to keep the happiness of the holidays lasting well into the new year.

Read on and I’ll walk you through the steps you need to make so you can budget for the holidays now.  This way you have the money you need to pay for the gifts you want.

How to Budget for Christmas Holiday Shopping So You Don’t Go Broke

How to budget for Christmas Shopping So You Don't Go Broke

If you are like so many other people, chances are budgeting for Christmas could be a first!

If so – congratulations!  There’s no shame in budgeting, and in fact, budgeting for Christmas gifts can be applied to other events such as birthdays, weddings, or family reunions.

Some financial experts advise keeping your budget within two to five percent of your annual income.  So, if you earn $30,000 a year, then this allows the budget to rest between $600 and $1,500.

For some families this may not be possible.

The best thing to do is sit down and work out how much can you take out of each paycheck from now until December 25th, and work with that.

Here is how you get started planning your budget:

1. First the real chore; you need to make a list of all expenses.  Notice I’m talking expenses here and not just gifts.  We tend to spend more than just on gifts, don’t we?  Do you have to travel at Christmas?  It may sound trivial, but even an extra tank or two of gas to drive around visiting relatives and can cost more than you think (and that’s considering driving not flying out somewhere).  How about special holiday meals?  You see where I’m going with this.  The point here is to figure out how much you’re spending before you even get to your gifts.

You need to figure out what you can afford!

Look at what you can realistically spend for the holidays.  Work out a total figure for this amount.  This will be after you’ve figured out what you’re spending for other holiday-related activities.  This is what you can afford for your gifts.

2. Have you saved anything yet for the holidays?  If you have money set aside for holiday shopping already then you are awesome!  (Listen, you’re awesome if you didn’t put anything aside too I just want you to get in the mindset of budgeting for stuff before it happens.  Are we cool?)

Now look at that figure you have for holiday spending.  Subtract the savings you set aside for gifts.  The amount that’s left is what you need to save between now and the holidays.

Note: Don’t go dipping into emergency savings and stuff like that.  Savings are there for a reason.  Usually that reason isn’t to blow it all on holiday gifts.

3. How many paychecks until the holidays?  Time is ticking and I want you to get saving ASAP!  From right now until the holidays how many pay cycles do you have?  There may not be many.  Take that final figure of what you need to save.  Now divide it by the pay cycles you have left.  That’s what you need to put aside every paycheck.

Is it too much?  Then you need to adjust what you can spend or find other expenses you can cut down for now.  It’s OK to sacrifice a bit for something you want.  If you have to scale back going out to eat or a few movies out then so be it.  Or you can lower the amount you have to spend this season.  That’s OK too.

budgeting for christmas

You should start budgeting for Christmas Before it’s Too Late!

4. Make a list of people to shop for and check it twice.  (See what I did there?  I’m here all week!)  When you’ve made this list – prioritize.  Who do you absolutely need to buy gifts for?  Really.  It’s easy to head out shopping then see the perfect gift for your neighbor’s cousin’s friend that you met once at a BBQ years ago.  It’s nice of you to think of her but that gift either comes out of your gift budget or it will hit your credit card.

5. Who’s been naughty and who’s been nice?  (I can be so punny at times.)  Once you have your list I want you to come up with reasonable amounts you will spend on gifts for each person.  Go ahead and pencil it in next to their name.

Add up all of those amounts.  Is it more than your figure from the previous step?  If so go back and play with the numbers.

And don’t forget about cards and gift wrap.  You’re going to need all of that too most likely.  That comes out of your budget.  That’s OK.  Remember the point here is to figure our what you can afford so you don’t have to dip into your credit cards and debt to get by this holiday season.  You can do it.  We’re doing fine here.

6. Where are you buying your gifts?  Discounts are out there to be had, such as Black Friday, Cyber Monday, and Free Shipping Day, among others.  When you have a list of gifts, do a little homework online and find the best prices and you will find you can save a lot and make your money go further.  What you’re doing here is making sure you can get the best bang for your buck.  What’s nice about this step is if you play it well you can find the gifts you want for less and end up with a little extra in your budget.  Yay!

See.  That wasn’t so hard.  And now you’ll have the money you need for the holidays.

Glen’s Pro Tip: One great way to put aside money is to set up an automatic savings account.  I love using Capital One 360 Savings.  I’ve had an online account there for over a decade now.  What I love is you can set up an account for a specific savings goal.  Then you set up an automatics savings withdrawal to go into the account.  Voila!  You now have money automatically going into your savings goal.

Take a look at CapitalOne 360 Savings

Don’t go overboard

When shopping there is a huge temptation to purchase more extravagant gifts than budgeted, but always ask: where am I going to get this extra money from?  Always keep your receipts to help track what has been spent (not to mention should you need one to return an item).

You don’t always have to spend a lot on a gift

Budgeting for Christmas shopping can be enhanced with some creativity. If buying an expensive item for a family member is not attainable on your own, then make it a family/group gift.

Homemade baked goods are generally better than any store-bought goods.  Take photographs of the people you love – print them off and find a nice frame.  If you recycle Christmas cards, get some bristol board and make your own cards to send and wrapping paper can be colorful magazine pages or comics.

The internet holds a wealth of ideas that can help you have the best holiday ever – even on a very tight budget.


Above all else, keep in mind that the focus of the holiday season should be on what can be given that costs nothing and yet is the most valuable – spending quality time with family and friends.  Sharing an evening of laughter together is a memory that will outlast any purchased gift.

If you need some help with budgeting here are some software options to look into:

What’s worked for you in budgeting for holiday shopping?

How to Budget for Christmas Shopping - Your Guide to Survive the Holiday Season
Article Name
How to Budget for Christmas Shopping - Your Guide to Survive the Holiday Season
Christmas and general holiday shopping can easily put you in debt if you aren't careful. See our steps on how to budget for Christmas shopping.
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Published or updated October 20, 2014.


  1. I talked about how Black Friday ads are already leaking. So depressing! Another good way to avoid going over budget is to set spending limits with family and friends. My in-laws are broke, so we have a $25/person limit. They can (combined) spend $25 on me and $25 on my husband. Same for us. Then he and I determine a budget for each other. Last year we upped it to $100 each. Not sure I want to go that high this year. We really don’t need/want a lot, and I’m worried about unnecessary clutter.

    • Glen Craig says:

      Great ideas Abigail! Going over present guideline with family and friends can really help iron out gift awkwardness. What we do is tell family to not worry about my wife and I and just get gifts for the kids if they want.

  2. Every year I feed during the year my Christmas Club Savings at my bank. But I also do surveys, mystery shop, web site testing, and other small things which keep me busy and add to my finances. I collect Amazon Gift Certificates which I save for Christmas Spending as well. I also shop for Christmas throughout the year. If I see a gift someone would like and it is priced right I will buy it then and not wait until Black Friday. I rarely do Black Friday. It is too crazy and shopping then is too much for me to handle. Your tips are very good ones which I have used as well. I keep to a budget ($500) and by January I have everything paid.

    • Glen Craig says:

      Saving throughout the year is a great way to make sure you have enough for Xmas. I love how you hustle to get extra money! And yeah, Black Friday is not for everyone.

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