How to Save Money for Christmas

Christmas is a wonderful time of the year, but it can also be a stressful and expensive one. According to a survey by the National Retail Federation, the average American planned to spend $998 on gifts, decorations, food, and other holiday items in 2020. That’s a lot of money, especially if you are on a tight budget or trying to pay off debt. Fortunately, there are ways to save money for Christmas and still enjoy the festive season without breaking the bank. Here are some tips to help you plan ahead and celebrate Christmas on a budget.

Set a realistic budget and stick to it

The first step to saving money for Christmas is to set a realistic budget and stick to it. A budget is a plan that tells your money where to go, instead of wondering where it went. To create a budget, you need to list all your income and expenses for the month, and allocate a specific amount for each category. For Christmas, you need to include categories such as gifts, food, decorations, travel, entertainment, and charity. You can use our free Christmas Present Planner as a guide to help you plan your gift list and budget. Once you have your budget, you need to track your spending and make sure you don’t overspend or go into debt.

Start saving early and use a sinking fund

The best way to avoid the stress of last-minute shopping and high-interest credit cards is to start saving early and use a sinking fund. A sinking fund is a separate savings account where you save money for a specific purpose or goal, such as Christmas. By saving a little bit each month throughout the year, you can build up enough cash to pay for your Christmas expenses without touching your emergency fund or other savings. You can open a designated Christmas savings account with your bank or use an app like EveryDollar to connect your budget to your bank account and track your transactions.

Shop smart and look for deals

Another way to save money for Christmas is to shop smart and look for deals. You can save a lot of money by comparing prices, using coupons, shopping online, taking advantage of sales and discounts, and using cash-back apps or websites. Some tips to help you shop smart and look for deals are:

  • Make a list of what you need and stick to it. Avoid impulse buying and buying things you don’t need or want.
  • Shop early and avoid the rush. You can find better deals and avoid the stress of crowded stores and long lines.
  • Shop online and save time and money. You can compare prices, read reviews, use promo codes, get free shipping, and earn cash back from sites like Rakuten or Swagbucks .
  • Use cash or debit cards instead of credit cards. This will help you avoid overspending and paying interest on your purchases.
  • Use gift cards or rewards points to pay for your purchases. You can also sell or exchange any unwanted gift cards for cash or other gift cards on sites like CardCash or Raise .

Get creative and make your own gifts

A great way to save money for Christmas is to get creative and make your own gifts. Homemade gifts are not only cheaper but also more meaningful and personal than store-bought ones. You can use your skills, talents, hobbies, or passions to create something unique and special for your loved ones. Some ideas for homemade gifts are:

  • Bake cookies, cakes, pies, breads, or other treats and package them in festive tins or boxes.
  • Make candles, soaps, bath bombs, lip balms, or other beauty products and put them in jars or baskets.
  • Knit, crochet, sew, quilt, or embroider scarves, hats, gloves, blankets, pillows, or other accessories.
  • Paint, draw, sketch, collage, or sculpt pictures, portraits, landscapes, or other artworks.
  • Write poems, stories, songs, letters, or cards and print them on nice paper or make them into books.
  • Take photos or videos of memorable moments and make them into albums or DVDs.

Be frugal and cut back on other expenses

The final way to save money for Christmas is to be frugal and cut back on other expenses. You can save a lot of money by reducing your spending on non-essential items or services that you don’t really need or use. You can also find ways to lower your bills or earn extra income by selling things you don’t need or doing side hustles. Some examples of how to be frugal and cut back on other expenses are:

  • Cut out cable TV and switch to streaming services or watch free content online.
  • Buy generic brands instead of name brands at the grocery store or pharmacy.
  • Pack your own lunch instead of eating out at work or school.
  • Brew your own coffee instead of buying it at Starbucks or other cafes.
  • Cancel any subscriptions or memberships that you don’t use or need, such as magazines, newspapers, gym, or clubs.
  • Negotiate lower rates or switch providers for your phone, internet, insurance, or utilities.
  • Sell your unwanted clothes, books, games, or other items online or at a garage sale.
  • Do surveys, tasks, or gigs online or in your neighborhood for extra cash.

Saving money for Christmas doesn’t have to be hard or boring. You can still have a wonderful and joyful Christmas without spending a fortune or going into debt. By following these tips, you can plan ahead, shop smart, get creative, be frugal, and celebrate Christmas on a budget. Remember, Christmas is not about how much you spend, but how much you love. Happy holidays!