Christmas spending derails many budgets but with planning and organization you can have a debt free and stress free Christmas this year.

I love Christmas but in the past I had several that left me with a massive hangover from the anxiety and stress of spending too much on credit cards.

I wasn’t full able to enjoy the season because I fell into the trap of consumerism and debt. It’s been years since that has happened buy I remember the stress that ruined several holidays and never plan to make that mistake again.

Having a written plan and a budget is now crucial for me to enjoy the Christmas season. It saves me from stress and helps me get through the holidays debt free.

Preparing for Christmas early instead of waiting for December to roll around has eliminated stress and debt from our lives.

How To Budget & Save For Christmas

Today I’m going to share our process for having a debt free Christmas and the printables I’ve created based on my Christmas planning process to get through the holiday season debt free.

Start Planning Early

The earlier you start planning for Christmas the more opportunities you have to cover all your bases and skip stressful last minute issues. We are starting our planning for Christmas right now in July and will start our actual Christmas savings plan next month in August.

Set A Budget First

Big key to having a successful debt free Christmas is creating a holiday budget. Several months before Christmas you should think of an amount you’ll need to accomplish all the fun activities and gift purchases. Another way to do this is set a spending limit for each gift and write out a list of all the people you have to buy for and work from there.

Count out how many paychecks you have left til Christmas and set a goal amount of how much you will need to save per paycheck until Christmas.

Start Saving Early

Making Christmas into a sinking fund and saving early makes a huge difference. I start saving earlier and earlier each year and each time I move it up it makes it easier.

If you start saving in January or even the week after Christmas then you have much more time and can contribute smaller amounts than if you start in October. This year we are planning to start our savings in August after our beach trip is over.

The sooner you start saving the easier it is to take advantage of other tips like buying special gifts on sale throughout the year, because you already have the money available.

Open a savings account just for the holidays. Open an account at Capital One 360 and you can get a bonus to use for the holidays to start your savings account. Then you can fund Christmas throughout the year each time you get paid or make extra money.

Get Organized

This Christmas planning bundle I made is based off all my old lists in my past planners. When thinking about planning ahead for Christmas I went back and looked at all the things I’ve created in my planner the last few years that we’ve had debt free Christmases. It helps so much to write everything down so you can plan out a budget for everything.

how to save for christmas

This is important for us because we always have a lot of people to buy gifts for at Christmas. I write down everyone’s name and then decide how much we want to spend on that person.  Writing everyone down and giving them a gift budget helps keep us organized and make sure we don’t overspend or forget anyone.

I haven’t bought new decorations or wrapping supplies for a couple years now because I purchased a ton at 90% off one year after Christmas. This means my gift budget is larger than some people’s but my decor budget is really small. But having all the expenses planned out helps make sure it is all accounted for.

One last thing I’d recommend is keeping track of the gifts you’ve bought for each person! I know some people who get so into buying things that they have given the wrong gifts to people because they didn’t stay organized or on budget.

Cut Your Christmas Budget

There are several ways to cut your gift budget in half.

  • Do a gift exchange with family where you draw names and only buy a gift for one person.
  • Look for great gifts throughout the year in clearance sections to score big savings.
  • Remember that not everyone needs or wants a gift so cut our gift giving where you can.
  • Use ebates if you shop online so you’ll get money back for things you are buying anyway.
  • Get creative and make gifts for people on your list. There are tons of easy things to make like homemade soaps, bath bombs, etc.
  • If you have a big group of people, make something in bulk that you can then split up. You can make a huge batch of cookies and deliver it in a cute Dollar Tree bin for example.

Christmas Is About More Than Gifts

When you are writing out your holiday budget remember that the season is more than just Christmas gifts.

Remember that what really matters is spending time with the people that you love.

The ultimate goal is to get through the holidays debt free, skip the stress and spend your time with your loved ones.

Mary is the founder of Pennies Not Perfection where she teaches how to make online income to build wealth and gain freedom. She quit her day job in 2021 after she doubled her salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track investments, grow her net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.