Ultimate Guide to a Stress Free & Debt Free Christmas Budget! (Free Printable Christmas Budget


Planning for a debt-free Christmas budget has never been easier!

Author: Kari Lorz, Certified Financial Education Instructor

Author: Kari Lorz – Certified Financial Education Instructor

Christmas is a time of joy, excitement, tasty treats, corny movies, and debt. Debt? Ya, they call it the Christmas Debt Hangover, that doesn’t sound pretty, does it? Unlike the regular kind of hangover, this one grows interest month after month (like a fungus, yuck!) instead of just a headache and sour tummy for one day.

To avoid the dreaded Christmas debt hangover, there’s just one thing you need to do. Make a holiday budget! (You didn’t just hiss at me, did you?) ? I get it, the word “budget” has a pretty lame reputation among the masses, unless you’re a budget nerd, like me. But hear me out. After reading this post, you will absolutely be game for making your own Christmas budget, and having the best holiday season ever!

ultimate debt free christmas budget

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Step 1 – Recap LY &

Look at last year’s holiday credit card bill

Sometimes we forget about the small things that came up during the year, so pull out your resources (aka December’s debit and credit card statement from last year).

Do you see any charges from events that you want to repeat this year? Or any charitable giving donations you want to continue? Or see any charges from stores that you totally want to avoid? Look at the numbers, get a rough idea of your total spending, and use it as a guide for this year’s overall budget plan.

Maybe you want to decrease that amount by half, or 25% less. Or just cancel out a specific category. The most important part is that you decide on an amount that you are comfortable with! Not an amount that just happens as you get the bill in January! You need to plan your frugal Christmas budget, and then stick with it (the hard part).

Step 2 – Plan out this year’s Christmas budget

Plan for the Christmas you do & don’t want

During holiday movie #3, I want you to grab your Christmas budget planner and start to think about what you want this holiday to look like…

  • Low key and relaxed holiday season with your loved ones
  • Travel to see family or spending Christmas eve at home
  • Full of holiday events like seeing Christmas lights, and Christmas shopping (even if it’s just window shopping)
  • Heartfelt family traditions like decorating the Christmas tree together
  • Lots of Christmas presents or minimal gifts
  • DIY gifts (i.e. cookies & treats), or just stocking stuffer
  • A season of giving (either community service or gifts, or both!)

Think of what you DO want and what you don’t want as well. For example, I don’t want to have scheduled obligations every weekend in December. I want half of the weekends to be spent relaxing at home, enjoying my space (I’m a huge fan of just sitting by the Christmas tree relaxing)!

Whatever you want, I want you to write it down! Now think of how are you going to make that happen?

Now let’s think about the details and fill in the budget category sections of the workbook. How much do you want to budget on the main holiday spending categories…

  • Thanksgiving dinner (the kickoff to the holidays)
  • Who do you need to buy presents for (family, friends, teachers, etc.)
  • Gift budget per person
  • Stocking stuffer budget
  • Christmas decorations – tree, lights, ornaments, etc
  • Christmas misc supplies (pantry ingredients for baking, Christmas cards & stamps, wrapping paper, etc
  • Christmas events that cost money
  • Christmas donations
  • Travel expenses
  • Christmas breakfast
  • Christmas dinner
  • Christmas cookies & treats
  • Misc holiday expenses

Fill out each section and be specific about the dollar amounts of each and your savings goal total. If the dollar amount gave you a slight panic attack, review it and see where you can pare down costs. Remember, a gift doesn’t need to be expensive to mean something to you and the person you give it to! Some of the best presents are just the little things, things that let someone know that you care.

if you want to go the extra mile, you can plan for all aspects of the season with a full-on Holiday Planner! It’s a to-do list, shopping organizer, meal planner, gift planner and of course a budget & savings planner to!

The true meaning of Christmas

There is no wrong or right answer as to a specific amount for your Christmas spending. Don’t let your neighbor’s huge decoration display sway your decision! And don’t feel bad if it’s not as much as it was in years previous. Everyone always says it’s not the price tag that matters; it’s the thought and effort into coming up with a meaningful Christmas gift!

(If you’re not sure what to ask for yourself, but still want some mystery, be sure to check out I did on getting the perfect gift for us Moms, or the ‘What do I Even Want for Christmas post! So many great ideas that still leave room for a personal touch!

Okay, back to the meaning of Christmas, I want to make two points.

  1. As I mentioned above, how much something costs (or how elaborate and fancy it is) doesn’t matter! Not at all!
  2. A gift given out of obligation isn’t really a gift. Read that again, and think about it. Don’t buy gifts because you have to. Buy gifts either because you want to share something great that you like, or you want to show someone that you thought they’d like _____ because of _____.

If you find it hard not to get people Christmas gifts, then consider the DIY route, (and nix the crazy holiday shopping). Be it homemade cookie mix in a cute jar, a beautiful potted plant from your own yard (I have a shoot-off of my grandmother’s lilac bush, and I love it!) Or a family heirloom passed down through generations. Read here for more ideas on how to cut back how much you spend on presents.

Charles Dickens quote on Christmas

The meaning of the Christmas season is (in my humble opinion), is to spend time with your family, cherish the bond, and make new memories that you’ll cherish for years to come. The holidays are also (obviously) a religious time of year to celebrate the birth of Jesus and reconnect with your values.

It’s also a time to share your heart and time with those around you. Especially those less fortunate, and celebrate those who serve. Consider doing a Meals on Wheels Route together as a family, or bake cookies for your local fire station.

Whatever “it is” that you hold dear, this is the time to celebrate it and honor it. This isn’t a time to show your sister-in-law how big your walk-in closet is or the designer clothes you got to wear to Christmas parties (Total generalization and stereotype about the exact opposite meaning of the Christmas season).

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Free Christmas Mini Budget Planner

Step 3 – How to stick to your Christmas budget

Sticking to your Christmas budget is the hardest part of the equation! You always hear about the best-laid plans… that are forgotten about a few weeks after being made. Don’t let that happen to you!

Here are a few tricks that you can do to help keep you on the straight & narrow!

Use Christmas cash envelopes

The cash envelope system of budgeting is one of the best ways to budget your money! It works because once the envelope is empty, you can’t spend any more. The money is gone, end of story! (please don’t borrow from your other envelopes, that is cheating, and cheating gets you nowhere!) If you really want this to work, then you have to play by the rules!

So you save your money for Christmas, in all one “bucket” and then come holiday shopping time (say the weekend before Black Friday, you divvy the funds up into each of your holiday cash envelopes! I’ve included six festive Christmas cash envelope patterns in the Christmas Budget Workbook; some budgeting categories could be…

  • Gift budget
  • Christmas breakfast/dinner
  • Fun family events – zoo lights, Polar Express event, pictures with Santa, Christmas plays or concerts
  • Crafting & baking fun
  • Travel expenses
  • Holiday vacation
  • Holiday date night
  • Christmas decor
  • Christmas tree
  • Charitable giving & random acts of kindness

If carrying all that extra cash around worries you, you can do what I do. As the holidays get closer, I buy a prepaid credit card for gifts (so I can buy gifts online as well). Remember when choosing your prepaid credit card, be sure to read the fine print and look at the fees charged. You can usually find a Visa or MC that just has the initial loading fee of $5 or so.

Keep your eye on the prize

This is all about reminding yourself why you started this in the first place. Remember, the promises that you make to yourself are the most important. I repeat…

The promises that you make to yourself are the most important!

So get a reminder handy of why you want to have a debt-free Christmas. Be it…

  • Last year’s credit card bill from all your holiday spending (gulp!)
  • A picture of the place you want to go on vacation to next spring (but you won’t be able to afford to go if you don’t keep yourself in check)
  • Your favorite picture of your family together, this is good if you want a more minimal and less commercial Christmas.

So really think about why you want this and then get a visual reminder of it.

Get a Christmas budget buddy

Now, doesn’t that sounds fun! HA! It does kind of sound fun if you have the right friend with the same goals as you. You can help each other stay strong while shopping on Black Friday, or you can help each other make a different homemade gift for each other to give out. For example, one of you bakes your famous chocolate chip cookies, and the other makes your grandmother’s butter cookie recipe. Then trade half so you can each give out a cookie platter.

Ways to cut back on your holiday budget

You can have a frugal Christmas in any number of ways! Here are just a few ideas…

  • Gift Giving; embrace the Rule of 4! I’m not sure where it started, but the Rule of 4 is simple. Instead of giving lots of gifts for your immediate family, you give one gift for each:
    • Something they need
    • Something they want
    • Something to wear
    • Something to read
  • Christmas potluck dinner
  • No travel (this might be an excellent option for those that always fly to Grandma’s house)
  • Do only one event that costs money and then focus on free & frugal Christmas activities for the rest!
  • No new decorations, try cutting some greenery instead to decorate your home, twined with pretty red ribbon or jingle bells. Or better yet, ask your local Buy Nothing Facebook group if people want to do a holiday decor swap!
  • Only give homemade gifts to outside family members – cookies & treats
  • Do a Christmas gift exchange, so you are only buying one big gift for one person this holiday season.

At the end of the day

By the end of Christmas movie #3, you should have your holiday budget and all set (or a really good approximation), in addition to your savings plan from Steps 2 & 3.

I’m just really excited that come January; you will have no fear of your credit card bill! The holidays will be a lot more enjoyable & relaxed when you know that there’s not going to be sticker shock later on. I just want you to enjoy the season and feel damn proud that you made your stress free (debt-free) Christmas on a budget happen!

Articles relating to Christmas on a budget:

Free Christmas Mini Budget Planner

How are you going to plan your holiday budget? What would having a debt-free Christmas mean to you?

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  1. I’ve slowly have been getting use to the idea of Christmas in July (besides the Hallmark movies lol). So I’ve been giving it a try this year. So hopefully it’s not as stressful in December.

  2. I was just talking about this today. I usually save a little each week/month for Christmas. This gives me cash to spend at Christmas instead of using my credit card. If I need to order anything on line, I put that amount of cash into the bank and pay my credit card bill the next month.

  3. This is a very thorough Christmas budgeting post! It’s also a really great reminder that we should start planning early so that we don’t get caught with that debt hangover in January that you mentioned. Love it!

  4. I love this post because Christmas is my favorite holiday. I’m tempted every year to leave my Christmas tree up year around because I love it so much. These are some awesome tips and I personally start shopping for Christmas in January.

  5. This is filled with such great information!

    I feel like so many are looking forward to Christmas time this year more than usually! We all need a little cheer

  6. You’ve got this all planned out to a T! I think I have to adopt some of your tips. We always end up getting slammed with home expenses in November and December which makes Xmas expenses always difficult.

  7. These are great tips for saving money on Christmas! Christmas in July, this is the first time I’m hearing of it, thanks for sharing!

    1. I heard about it a few years ago and didn’t think much of it, but this year I am all about bringing some holiday cheer to my family now!

  8. Great tips! We definitely start thinking about Christmas around September and really save all year round for the holidays. We don’t go overboard with gifts and that helps!

  9. I definitely needed to read this. We’re building a house with cash so everything extra goes to that. I need to start thinking about setting aside money for Christmas. Thanks for sharing!

  10. Several years ago I sat down and added up how much we spent at Christmas and then divided it by 12 and now set that much aside every month. Christmas has gotten less stressful for me now and I love it.

    1. Absolutely! I am always surprised by how much we have in rewards! (Which can be a good thing and a bad thing as it means we’ve spent a lot) 🙂

  11. The best tips to save for this Chrismas are to follow a no spend month and taking a part time job for a few months.
    I am going to follow both of them. Thanks