Create a Christmas Budget to Avoid Post-Christmas Debt

If you’ve been reading my blog, you’ll know I’m frugal AF. As much as I love the holidays, I do not like spending outside my budget, even for Christmas. Did you know that 21% of Americans go into debt over Christmas?! Not only that, but most Americans use their credit cards to buy Christmas gifts and spend the next couple of months to recuperate from their Christmas spending! That’s a terrible way to end/start the year. This is where a Christmas budget can come in handy. 

Instead of swiping those credit cards sparingly during the holidays, take some time to plan a Christmas budget. This will help prevent overspending and going into debt over Christmas.

I’ve implemented a Christmas budget for the last couple years to keep me out of the red. Here are my 5 hacks for creating a Christmas Budget to avoid post-Christmas debt.

1. Create a Christmas Budget for Gifts

Yes, you guessed it! I’ve got a list and I’m checking it twice… my Christmas budget and list that is. I create a list of people I plan to buy Christmas gifts for and set a monetary limit per person. My list is not very long, maybe 10 people including my immediate family. I then plan out how much I need to set aside from my paychecks to fund my Christmas budget. 

For example, let’s say I have 5 people I plan to buy gifts for all with a limit of $50. That means I need to budget for $250 as my Christmas budget. I would begin setting money aside from my paycheck as early as January (Yup, I said January, as in 11 months before Christmas). This way I have 11 months to fund my Christmas budget. So when the Holidays roll around, I am spending with the money I saved.

Planning is imperative to stay within any budget, even a Christmas budget.

2. Start Shopping Early

I create my Christmas budget and list early so I can slowly buy the gifts throughout the year. I start as early as February. I collect all the gifts that I purchase throughout the year in a box in the corner of my closet and wait until December when I start wrapping the gifts. Starting early allows me time to fund my Christmas Budget. I do this for many reasons:

1. I hate dealing with shopping malls and department stores around the Holidays when it’s super crowded
2. I don’t like spending a lot of money all at one (aka buying all Christmas gifts in the month of November/December which can cause you to dip into your savings)
3. I don’t like to spend outside my means
4. I like to be thoughtful in my gift giving. Having extra time allows me to spend more time thinking of thoughtful ways to show the people I care about that I love them.
5. Starting early is also less stressful. The end of the year is a busy time and if you leave your Christmas shopping until November or December, it feels rushed to get it done. I’m not about that life.

3. Know When Seasonal Items Go On Sale

Once you have your Christmas budget and list ready, you will know what items you need to purchase and you can plan to buy seasonal items out of season. For example, if my little brother needs a nice wool sweater the worst time to buy this gift is during the fall or winter season. I strategically plan to buy the wool sweater during the sales in spring or summer, when companies are trying to get rid of their inventory. I landed an awesome steal getting 70% off his Christmas gift just by timing the seasonal sale correctly.

Another way to time gift buying is by waiting for the big sale days like cyber Monday, Black Friday and other big sale days. If you have a favorite place to shop, find out when they run big sales to get rid of their old inventory.

4. Buy on Etsy

I am a big fan of supporting small local businesses and I make an effort to buy gifts on Etsy. Not only are the items on Etsy unique and personalized, I like the idea of my money going to someone’s small business. It gives me the warm and fuzzy’s. Tip on Etsy gifts, many Etsy shops can become overwhelmed with orders during the holiday rush, so consider buying before December to avoid the anxiety of shipping/giving a Christmas gift late. Stay tuned next week for  Latina Owned Etsy Shops to support this holiday season. 

5. Draw Gifting Boundaries

We all have that family member who spends a lot of money on Christmas gifts and that is totally fine. But don’t feel obligated to match their spending habit, especially when you don’t have the means to do so. Remember, Christmas is about being with family and friends (and eating bomb food like Tamales, Pozole and drinking Ponche). Honestly, the gifts are a plus not a necessity. Don’t let anyone make you feel less for taking the time to be thoughtful and get a gift for them. If they make you feel that kind of way… they aren’t someone you should be giving a Christmas gift to (Just saved you a couple bucks there 😉 ).

Besides, there are plenty other ways to show you care about someone other than Christmas gifts. Make them a hot meal, take the time to give them your undivided attention, spend quality time, vocalize how much you care about them, and the list goes on.

Final Thoughts on Christmas Budgeting to Avoid Post-Christmas Debt

It’s currently mid-October as I write this post and I have all my Christmas gifts already in my corner closet for this year’s Holliday season. And I’m well within my budget.  What kind of holiday/Christmas budget hacks do you use?