How to Create a Holiday Budget (when YOU’RE BROKE!!) & Save MONEY!

No one wants to talk about money (or lack thereof!) this time of year, but budgeting for Christmas and the Holidays is important!!

One of my favorite lines to save more money during the holiday season is, We just need to take a break this year.”

It implies that it’s not over – it’s not that I’m never going to spend money on Christmas again, I just need a break!

Even if you haven’t saved a penny for the holiday season, it’s not too late. You can still set a reasonable budget and stay within it without having to put Christmas on a credit card and then worry about it in January.

Here are a few simple steps for how to set a REALISTIC budget that you can actually stick to!!

Or watch this video on YouTube here!

1. List out GIFTS from last year


Write a list of everyone that you bought a gift for last year and how much you spent on them.

It blew me away when I actually sat down and wrote out every single person that I bought gifts for and what I spent. From the mailman to teachers to coaches to co-workers to bosses to family members to the kids….. We spent A LOT!!

When you have an idea of what you spent on Christmas last year, it will help you know how to budget for it.

Side note: I’m NOT against gifts and gift exchanges. I do like to appreciate people during the holidays. But I don’t like gift exchanges where we just give the person we chose a meaningless gift!! Those I think we should opt out of (see more about that here).

2. List out OTHER EXPENSES from last year


Make a list of all the other expenses – food for gatherings, travel expenses, decorations, Christmas cards, Christmas photos, stamps, new clothes, extra eating out and any charitable donations.

I know this can feel a little overwhelming, but once you have these two lists, add everything up to see what you spent!….It’s probably more than you think!

I couldn’t believe it when I added it up — we had spent $1000, even though I’m trying to be very simple with Christmas and keep everything scaled back!!

3. Set a REALISTIC budget


Once you know what you’ve spent in the past, figure out a realistic budget for your family that you could pay in cash this Christmas and NOT have to put it on credit card — because the goal is to not put ANY of this on a credit card!! No one want to start off the New Year in the hole!

If you can find an extra $300 or $400, then that’s your budget and that’s what you’re going to work with.

(If you literally have no extra money, everything is tight and you don’t know where you would come up with ANY cash for this Christmas, that’s okay — keep reading, more on that later!!)

Once you have a realistic budget of what you can actually afford, you can start getting really creative.

4. PRIORITIZE your gift list


Take the list of people that you want to give gifts to and decide who are the most important people that you need to prioritize. It might be your children, other family members or a close friend.

Put them at the top of the list.

You may have spent money last year on people like teachers and coaches, but this year you can write them a nice note and thank them for everything they do.

Just because you cut back this much this year, it doesn’t mean that in the future you can’t do a bit more again!!

I love people that serve us, but I also know that they wouldn’t want us to go in debt to give them a Christmas present just so that we can feel good acknowledging them.

(If you’re wondering what teachers REALLY want for Christmas, check out this post written by a teacher!!)

When you look at your budget and what you actually have to spend, you’ll start looking at this list a lot differently than if you just put it on a credit card.
You might be thinking, But you don’t know my family, you don’t know my in-laws, they wouldn’t understand!

I’ve heard stories from people who mustered up the courage to tell their friends and family that they simply don’t have the money or would like to simplify Christmas for a year.

So often the stories are, I didn’t think they would understand, but they’re okay with it!

And if they don’t understand that, well…. if you need a break from Christmas cards, cookie exchanges, gift exchanges — you need a break!!


There’s so much more to life than gifts. I know we have gifts people for whom gifts are very important (my twin sister is a gift person!!), so I don’t want to slight anybody during the holidays, but I also know how much freedom there is in getting out of debt!!

Just because you’ve spent more than you have in the past, doesn’t mean that this has to be your reality again this Christmas season!!

Ways to save money during the holidays

Once you have your budget, you’ll want to be super careful about the gifts that you do buy.

Use PRICE COMPARISON tools

CamelCamelCamel is an online tool that helps you compare prices on Amazon and third parties.

If you search for an item, it will show you what the current price is on Amazon and what the lowest price has been. This gives you an indication that it could go that low again during the holiday season.

Buy USED items

Look on Facebook Marketplace or other online shops where you might be able to find brand new items still in the box.

Instant Pot on Marketplace

When you commit to this lesser budget, you’ll be so surprised at the things that come your way!

STOP using your credit card


When you use your debit card or cash instead of your credit card, you won’t be as tempted by all the other deals that are going on this time of year.

WATCH OUT for all the little extras!

When you have a limited budget, pay attention to all the extras that you purchase during the holiday season too.

When you pay only with cash or debit, you’ll probably find that it’s less tempting to stop at Starbucks, buy stuff for yourself or stock up on things that you don’t actually need. You’ll probably also find you’re a lot more careful about not eating out.

If you have NO extra money

If you really have no extra money, take a hard look at the gifts and things you spend money on and cut out absolutely everything that you possibly can because it’s not Christmas if you’re going into debt for it.

That’s just not what Christmas is about.

I think most of us would probably agree that it’s important for us to acknowledge our kids during this time, but beyond that… I think we really have to cut everything else out.

Instead of making Christmas about gifts, you can focus on doing more fun things together like ice skating together, sledding, baking cookies, or any other low-cost or no-cost activity.

The average parent spends only THREE MINUTES a day engaging with their children. If you ask kids what they really want, they want time with their parents.

But you won’t find many commercials, flyers or catalogues marketing free family activities or fun things you could do with your kids.

It might feel like your kids expect a big, elaborate Christmas and that you can’t go back now. But doing things with your kids is going to have such a greater impact on them and their emotional and mental health than anything that you can buy them.

I don’t want to get to preachy or tell your you’re doing everything wrong.
I just want to give you permission to scale back your Christmas. It’s too stressful to spend money we don’t have.

Maybe not everybody will understand, but that’s okay! You do what’s best for you and your family!!

I hope this helpful! I’d love to know what your holiday budget plans are for this year! Are you planning to scale back your gifts? What kind of fun family activities do you enjoy doing together?


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