How much did America spend on Christmas last year? A few million? A couple hundred million? Maybe a billion?
Not even close. Believe it or not, America spent around a trillion dollars on Christmas.
Yeah, that's a lot of money on gift wrap and candy canes. And with each American spending around $1,000 on Christmas gifts, it's no wonder so many people feel financially stressed during the holidays.
But look—you don't have to break your budget on Christmas. In fact, there are plenty of ways to celebrate without overspending. Here are just seven.
1. Plan how much you'll spend.
First, take a step back and look closely at your finances. How much can you realistically put toward Christmas without relying on debt or draining your savings accounts? Ideally, the amount you spend on Christmas should be based on what you have saved and what you earn. If this number feels low, cut some expenses, like gym memberships or eating out, or pick up extra income, like ride sharing or delivering groceries.
2. Decide who was naughty, who was nice.
Next, write down the names of everyone you're buying a gift for. Your list may include:
- White elephant gift recipients
- Teachers/Service providers
Making a list puts your spending power in perspective. Having too many people on your list can force you to go over your spending limits, which means you may have to cut a person or two. Alternatively, if you absolutely cannot take someone off your list—because they're, you know, your grandma—it forces you to think about cheaper presents or do-it-yourself services.
3. Create a Christmas budget.
Here comes the fun part. Now that you know how much you can spend, as well as who you're buying gifts for, it's time to decide how much you'll spend for each person. You can do this in different ways. For instance, you may want to allocate equal amounts to everyone on your list, or you may assign a percentage to each person. An example of a percentage-based budget may look like:
- Spouse: 20%
- Kids: 40% (20% each)
- Family: 20% (5% each)
- Friends: 20% (4% each)
A good rule of thumb for Christmas budgets—give yourself some wiggle room by overestimating for each person. You may not spend as much as you're estimating, but at least you won't spend any more.
4. Find Christmas deals online.
If you dread Black Friday—and let's be real, who doesn't—you'll be glad to know you don't have to stand in long lines with rowdy crowds to get a good deal. In fact, with so many people avoiding in-store shopping in 2020, it shouldn't be that difficult to find great deals online.
Start now by downloading your favorite retail store's apps or subscribe to their email lists. You'll probably get more notifications and emails than you want, but you'll also get some great coupons. Some websites, such as Honey or RetailMeNot, will even group coupons based on your preferences.
5. Cut spending on decorations and wrapping.
Do you really need an inflatable Santa and a signature chocolate advent calendar? Probably not, especially when you're on a budget. If your kids like decorating the yard, you don't have to be a Scrooge about it. Just look for cheaper decorations, or better yet, make your own.
Pro tip: buy all your gift wrap, bows, ribbons, even stocking stuffers at the dollar store. You shouldn't spend a lot on something you'll ultimately recycle.
6. Consider do-it-yourself or cheaper gifts.
You don't have to give traditional Christmas presents: think outside the (wrapped) box. For example, instead of giving a present, you can offer a service, such as:
- Cooking dinner
- Taking care of pets
- Offering childcare
- Helping with landscaping or gardening
- Taking kids camping when it's warmer
- Spending quality time with the family.
In addition to services, you could make your own Christmas gifts. Spend an afternoon on Pinterest gathering fun and inexpensive gift ideas, then buy cheap supplies at the dollar store. Truthfully, most people will find a handmade gift more meaningful than a stocking stuffer you bought at a retail store.
7. Let friends and family know you're on budget.
Lastly, be honest with everyone. Let them know you're not overspending for Christmas this year, which means you can't buy too many gifts. Truthfully, you're probably not the only one stressing about money right now: more than likely, your friends and family are on a budget, too.
Need Help Budgeting for Christmas?
Let's make Christmas as fun as it was when you were a child. To get a clear picture of your financial future, as well as to help your cashflow around Christmas, try Thinkflow. Thinkflow was built to help you solve cashflow problems ahead of time. And the best part—it's free. Get Thinkflow today and own your financial future.