How to Have a Merry Christmas Without Breaking the Bank in 2020

Nov 20, 2020

Reading time: 10 Minutes

It’s been a year like no other, and now it’s time to plan a Christmas like no other. While the holidays may look and feel different this year, there’s no doubt you still want them to be magical. With this guide, you can have a fun and frugal Christmas.


How to Christmas Shop on a Budget

A frugal holiday budget can keep things merry and bright. It can also remove the added stress that often follows families into the new year--credit card bills!


Christmas shopping on a budget doesn’t mean skimping on gifts or joy. Instead, it’s a way for you to make sure you celebrate now and start your new year off without a pile of debt that matches your pile of presents.


Here’s how to Christmas shop on a budget this year:


Step One: Determine Your Spending Plan

Santa might start with a list of names, but if you want to Christmas shop on a budget, you need a different strategy.


Live within your means by starting with a reasonable amount of money you want to spend. Perhaps you created a sinking fund at the start of the year. In that case, you have likely been setting aside small amounts of money each month to foot this year’s Christmas bill.


However, if the circumstances of 2020 stopped you from planning, don’t fret. Instead, think about a reasonable amount of money you can aim to save between now and Christmas. Whether you’re eyeballing $100 or $500 or something different, make sure your budget amount is reasonable for your situation.


The key here is to ensure your budget is manageable. You don’t want to carry added debt into the new year if you can help it. So, choose a number that fits your finances.


Putting star on Christmas Tree


Step Two: Figure Out Who Is on Your List

After you’ve set your budget, start to make a list of who you intend to shop for. You might be tempted to duplicate last year’s list. However, the circumstances of this year mean smaller celebrations for almost everyone. Keep your gift list manageable, knowing that you can always celebrate more next year.


There are also other options to consider when planning your gift exchanges:


Host a White Elephant exchange

White Elephant gift exchanges can be a lot of fun. The more unusual the gift, the better! Often, they also include gently used or regifted items. That means these swaps conserve your cash and let your creativity shine. Of course, you want to make sure everyone is on board first.


Do a Secret Santa exchange

Instead of buying for every adult or every child, consider drawing names. That way, everyone gets a gift. But, it eliminates each person’s pressure to buy something for everyone.


Depending on your family and friends’ dynamic, you might do your best to guess what someone wants. Some circles, though, simply send wish lists to each other.


Be Realistic

Catalogs and commercials have paved the way for unrealistic expectations around Christmas. Keep the spirit of the season and your loved ones at the forefront.


In recent years, the four gift rule has become increasingly popular for families. The saying is to buy something kids want and something they need, plus something they’ll wear and something they’ll read.


Not only does this make your Christmas gift list a lot more manageable, but it also makes sure the presents add value to the recipient’s day-to-day life. As a bonus, it might cross off a few things you were going to have to buy in January anyway, such as new mittens or socks.


Save Money While Supporting Small Businesses

Creating a budget doesn’t just mean spending less. It means spending with purpose. This holiday season, many people are doing their best to support small businesses and their visions. Why? Small companies have felt the brunt of the impact of the pandemic.


Sometimes ‘shopping small’ can indeed add a few dollars to your total at checkout. However, there’s a huge benefit to local communities when people shop at small businesses. Especially this holiday season, the purchases you make might determine which local retailers make it into the new year. Plus, small businesses employ people from your area, and they’re often involved in giving back to the community directly.


If you’re tempted to do most of your Christmas shopping online, that doesn’t mean you can’t also support small businesses. There are hundreds of gift guides online featuring small businesses within individual communities.


Not sure where to start? Check out your local Chamber of Commerce website for ideas!


Find Extra Money

There are ways you can find extra money this holiday season, and we aren’t talking about some pocket change on the corner. Examining your spending tools and incorporating some new ones could put additional cash into your budget.


Don’t start swiping a credit card simply to cross things off your Christmas list. If you’re already a credit cardholder, though, you might have credit card rewards in the form of unredeemed points or cashback dollars you can use to offset the cost of some of your holiday purchases.


Open your credit card app or log onto your account to check to see what offers exist. While you’re there, you might also look for any special discount codes or cashback deals that could also reward your future shopping.


If credit cards aren’t for you, there are still plenty of cashback and rebate options, such as Rakuten and Ibotta.


Rakuten and other online shopping rebate tools reward you with either a flat dollar amount or a percentage of your purchase when you shop through that online portal.


Ibotta® and other cashback apps offer rebates for specific items or send some coins your way for scanning receipts. It won’t make you rich, but collecting extra money throughout the holiday season adds up.


Frugal Holiday Gift Ideas

After you’ve set your spending plan, consider different ways to stretch your budget and shop more meaningfully this year. By changing where or how you get some of your gifts, you could save big.


Here are a handful of frugal holiday gift ideas to consider this year:



To DIY or Not to DIY?

It’s true that making holiday gifts can save money...sometimes. If you already have some of the materials and the skills, then the do-it-yourself route can be fantastic. But Pinterest fails can be costly in terms of time and money, especially if you end up having to purchase a gift anyway.


When your heart’s set on homemade, do your homework. Research the cost of materials and see if there’s a way to do a low stakes trial run.

Get Thrifty

Think about how many times kids in your life have outgrown clothes or changed taste in toys before really getting much use out of them. That’s true for most kiddos. That means another vital way to shop and save is to explore local thrift and consignment stores.


Frequently, you can find brand new or gently used items for a fraction of the price. In addition to keeping more jingle in your wallet, you’re also making a much eco-friendlier choice.


Skip the Fancy Gift Wrap

This isn’t exactly a gift idea. Instead, it’s permission for you to pick up the gifts you planned for and skip out on all the fancy gift wrap that might go with it. Wrapping paper, bags, bows, tissue, and cards all add up in terms of cost. They also end up in landfills. Recent estimates found over 2 million pounds of gift wrap gets dumped each Christmas.


Be good stewards of this Earth and put that money back into your budget in other ways. Opt for recyclable options like the comics section of your newspaper, brown paper bags you can decorate, or reuse and repurpose old gift bags.


Choose Time Over Presents

Instead of feeling the need to buy another sweater or another toy, buck the notion that there must be a bunch of presents under the tree.


You can make plans to visit a park or go sledding as a family. Get a group together for hot cocoa. Then, walk or drive around to look at holiday lights. There are plenty of activities allowing you to spend time together that won’t break the bank.


Share a Skill Instead

Think about how much money you spend throughout the year outsourcing for talents you don’t have. It really adds up. That’s why many people are starting to swap skills instead of presents.


Drop off dinner or share a talent for woodworking. Offer to babysit or give guitar lessons. If you want someone to have a gift to open, consider making a c

ertificate or a coupon booklet and wrapping it in a small box. That way, there’s the thrill of opening a gift and something to look forward to later.


boy sitting with pet at Christmas tree


Other Ways to Save Money During Christmas

A frugal Christmas budget is a great way to save some coins without giving people coal for Christmas. However, you might be wondering how to save money during Christmas besides shopping strategically.



Of course, Christmas in a pandemic is going to look different than years before. If you’re celebrating on a smaller scale, that’s one way to bring the cost of your meal down. Other options include omitting a course (do people really need salad and soup?) or asking people to bring a dish to pass.



If photos are part of the holiday magic for your family, there are ways to reduce costs. Don’t be afraid to shop around and use coupons. Taking your photos sooner rather than later can also yield considerable cost savings.


Of course, there are other options too. Purchasing digital copies only and then having prints made elsewhere can net some savings. You might also consider booking a mini session or only buying a single pose. Some lucky individuals might even be able to ask a family or friend to snap the photos for them!



Cards and stamps can be costly! Many people are opting to go the email route instead when it comes to holiday greetings. In recent years, there’s also a growing trend to make a small donation to a cause that means something to your family in place of Christmas cards.


If your heart is set on snail mail, you might consider cutting back your card list. Focus on people who really cherish those photos and might not be seeing your family otherwise. Another option to maintain the holiday spirit is sending emails, making phone calls, or even starting a group text, encouraging others to share photos and updates.



For many people, Christmastime means Christmas clothes. Whether your family dresses up in their finest or competes for which sweater is the ugliest, many people hit the mall each Christmas. Instead of buying new clothes this year, consider remixing some of your outfits from Christmases past.


If your family has outgrown their outfits from last year, you still have options. While it might not be holiday colors, see if they have formal clothes from other events like Thanksgiving or church services. You can also organize a clothing swap among family and friends, especially if you have children of different ages.


Decor and More

It’s easy to get carried away decking the halls. Instead of adding new decor this year, refresh what you had last year. Sometimes, merely rearranging a room or moving things to a new location can give your home an entirely new feel.


If there’s something you absolutely do need, you can check your local Buy Nothing group on Facebook or The Freecycle Network for offerings as well.


Celebrate Christmas on a Budget This Year

There’s nothing quite so comforting as finishing out the year by celebrating the holidays with family and friends for many of us. That’s one reason why it’s so easy to get carried away come Christmastime.


Use these tips to have a more frugal Christmas to ease some of the financial stress that comes with the holidays. That way, your focus can be on Christ, the holiday season, and the people who matter most.


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