How to Set Up Your Christmas Spending Budget

How to Set Up Your Christmas Spending Budget

Did you know Americans are expected to spend up to $730 billion this holiday season?1 That’s a lot of photo cards, candy canes, Michael Bublé CDs, Santa hats, plush novelty socks, and sparkly ornaments. But unless you intend on skipping Christmas this year, you’ll find yourself a part of that $730 billion machine.

To enjoy the gift-giving season without any guilt-ridden overspending, set up your Christmas budget now—and then stick to it like sap on a fir tree. Here’s how.

Do a Christmas Budget Inventory

But first, it’s time to do some digging into your Christmas budget. That means you need to ask yourself the following questions to see where your spending stands now so you can know how much to spend on presents later.

How much do you have saved?

Before you know what you can spend, see what you’ve got to work with. Hopefully, you started saving early. If not, we’ll talk about how to get extra money so you don’t end up just doling out the coal this year.

What budget lines can you tweak?

Even if you started saving early, you might still need more cash to cover all the Christmas costs. Look through your normal budget and figure out what budget lines can get trimmed down, freeing up gift money for your Christmas budget.

Don’t know where to start? Here are a few nonessential budget line examples: restaurants, clothing, tandem skydiving lessons, personal spending, gourmet hot cocoa and entertainment.

“Oh no!” you say. “If I trim back on entertainment, my family can’t go see the Christmas lights this year!” Yes, they can! Drive to a neighborhood that goes all out and enjoy that free experience. BYOHC (bring your own hot cocoa) and make a cheap—but valuable—memory.

How can you boost your income?

Boost your income for a couple weeks as a way to up your spending power.  You could sell some things, take on extra hours at work, or start a side hustle. Get creative: Babysit so parents can go Christmas shopping alone, shovel driveways and sidewalks, offer gift-wrapping services . . . you get the idea!  

What Christmas traditions can you skip?

You can save money this year by cutting some expenses—and that includes traditions that don’t truly matter. Be open and honest with your budget and your loved ones!

Do you have a shopping list?

If not, make one! You need to list out every person you’ll need to buy for and start brainstorming present ideas. (You can use the first page of our All Cash Christmas budget guide.) This will help you when you’re making your Christmas budget category in EveryDollar (we’ll show you how in a minute).

How can you save on gifts?

Shop sales. Use coupons. DIY and make homemade gifts. Skip random gift exchanges. These are just some of the ways you can save serious cash this Christmas on presents.

How to Set Up Your Christmas Spending Budget in EveryDollar

1. Plan how much you’ll spend this year.

The average American’s holiday spending is around $1,040.2

First of all, you should never feel pressured to spend that much—or more, or less! The amount you should spend is based on what you make, what you’ve saved, and what you can move around in your budget to get the job done. So, crunch some numbers and see how much you’ve got to play around with this year.

2. Create a Christmas budget category in EveryDollar.

Sign in to your EveryDollar account, scroll down to the bottom, and you’ll see + ADD GROUP. This is how you add a new category. Name it anything you want: Santa’s Stash, Festive Finances, Merry Money, or the super straightforward name we’ve given here—Christmas Gifts.

3. Add the names of everyone who need a presents.

Click Add Item and type in the name of each person you have to buy for. (No, you don’t think people are items. It’s just budget terminology, folks.)  At this point, you’ll assign spending limits to each person as well.

4. Track your spending as you go.

Want to know how you don’t overspend? You track. You track hard. You track often. Keep up with all that spending as you go. Log in to your budget, click the word Transactions. Next, click the orange plus sign. Then, record the expense!

Or get EveryDollar Plus for yourself this Christmas. With this upgraded version, you’ll connect your budget to your bank account, and those transactions will just stream on over for you. All you have to do is drag and drop each purchase into the correct line item of your budget. That’s simpler than any reindeer game, and way more beneficial too.

5. Move amounts around when needed.

Oh no. You overspent on Mom. By $5. What will you do? Sorry, Dad, that five spot’s coming from you, so you up Mom’s line by $5 and lower Dad’s by the same.

Maybe that graphic tee with “just plane awesome” on it for your flying-enthusiast BFF is on sale—now you have an extra $15 for someone else! Move that money over to your spouse so you can afford tickets to see the next history-based, all-rap musical.

Yes, you can change up the planned amounts after you put them in there. And you should. As situations similar to these made-up examples happen to you, move the money all around! Just make sure you don’t overspend the total amount you set up for the entire Christmas Gifts category. 

Budget early for next Christmas.

Here’s a quick shout-out to planning early—do it! Put a sinking fund in your budget as soon as January to start stashing away cash for next year’s Christmas. If you do it little by little, month by month, coming up with Christmas money won’t hit you like grandma getting knocked out by a reindeer in that tragic song.

Get into your EveryDollar account and follow these steps to set up your budget so you can oh, by golly, have a holly, jolly, well-budgeted, debt-free Christmas this year!