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Christmas on a Budget – Ho, Ho, How to Save and What Not to Forget

By Monika Ritchie

Here it comes again, it’s the most wonderful expensive time of the year! It’s no secret that as the holidays get closer our spending increases and having Christmas on a budget seems very unlikely. According to a recent report by Equifax*, credit card spending and consumer debt has gone up by almost 4% during this time, compared to pre-pandemic totals in 2019.

While few of us want to think about budgeting amidst the sparkle and excitement of the holidays, it’s especially important to not set our budget aside entirely. And even with a budget, hidden costs and incidental spending can derail your financial plans. Sometimes it’s expenses we forgot about, other times we just didn’t plan the expenses into our holiday budget. It’s not just about being able to pay for that enormous tree or those handmade ornaments you’ve had your eye on, your familiar budget basics – food, utilities, clothing, etc. – can really take a hit around the holidays. So, if you want to save money on hidden holiday costs this season, check out these fun, festive, and frugal tips.

How to Make a Holiday Budget - Use a List & Check It Twice

How to save money planning Christmas spending on a budget.You might be wondering how to make a holiday budget, and you wouldn’t be alone. It’s basically a plan for what you need to spend and where the money will come from to do it. But you might be tired of hearing about an important part of a holiday spending plan - regardless of what you’re shopping for, a list will help you save money.

If you already have a gift-buying list all ready to go, that’s a great first step. But what about everything else? Take some time to think about what your holidays will look like this year and then make a list of everything that you’ll be spending money on. Feeling overwhelmed? Start with familiar budget categories and then expand upon them for your holiday budget. Food and drinks are a great place to start.

A 4-Week Plan for ChristmasWhat Not to Forget

Keep It Simple to Save On Your Holiday Food Budget

The most basic of budget items, food can get complicated during this time of year when we start to think about our holiday food budget. Instead of focusing on the fancy eats and treats, start with what December looks like for you foodwise; are you hosting a lot of events, or will you be attending them? What you buy and how much of it, will be affected by these things. Look at your calendar and plan your food budget accordingly. Want to save? Stick to what you know and enjoy. There’s no need to scrap a simple but beloved cookie recipe in place of a Martha Stewart confection. Often when we splurge on recipes with complex and expensive ingredients, we’re setting ourselves up for frustration and stress. Keep in mind your guests and/or host appreciate your participation and effort, they’re not judging or scoring your food!

Six Ways to Save During the Holiday Season

Don’t Let Drinks Drain Your Budget

Whether it’s alcohol, mocktails, hot chocolate, or your favourite holiday lattes; this time of year, drinks can really put a big dent in your finances. Want to save? Think about doing a “dry” December; it’s great for your health and your wallet. If you do want to indulge, put a limit on your number of drinks and encourage BYOB at events you’re hosting whenever possible. Don’t want to miss out on your favourite holiday coffee? Consider making your own at home. It’s certainly cheaper, but because you’re in charge of the ingredients, a homemade coffee drink can also be a lot healthier than the store-bought ones.

Buy Less Clothes, Your Budget (and De-Cluttered Closet) Will Thank You

There’s nothing like a season of soirees, get-togethers, and special occasions, to convince you that you have nothing to wear and need to buy a new outfit (or five). Avoid denting your budget with needless and often overpriced clothing purchases. Instead, stop, think, and look at your calendar. Take stock of your events - where are you going? What’s the occasion? Is it indoors or outdoors? Then, start shopping… in your own closet. It’s likely that you already have the appropriate clothing for your upcoming events, so if needed, brighten them up a bit with some holiday accessories. Still feeling stuck? Shop a friend’s closet or do a clothing exchange; you’ll still get to have something new, but won’t have to spend any money. If you absolutely need to buy something, consider purchasing your clothing second-hand. Not only will this be easier on your budget, but it’s better for the environment and the money often goes to a good cause.

How to Save Instead of Spend on Clothes

Holiday Decorations - Deck the Halls With Less Lights

Holiday decorations are a big part of Christmas and winter holiday celebrations. Electricity may not be the first thing you think of while budgeting for the holiday season, but putting up Christmas lights, decorating a tree, and hosting events can all add up to some budget-breaking electricity bills. To save on these “shocking” hidden holiday costs, try to follow these tips:

  • When it comes to lights, less can be more. You don’t have to forego the holiday lights entirely but do think about downsizing your display. Consider using less lights but including more decorations. You can use wreaths, tinsel, and other non-electric trimmings to brighten up your space. Using less lights will not only save your budget, but it’s a nice gift to the environment as well.
  • Switch to LED lights. If you’re going to have some lights up, consider switching from incandescent bulbs to LEDs. They use 80% to 90% less energy and they last over three times longer.
  • Use a timer. Running your lights all night can be incredibly wasteful. Your electricity budget will go through the roof and it’s unlikely that too many people are admiring your display at 3 o’clock in the morning. You can set a timer to turn off your lights at a reasonable time. You’ll save money and because it’s automated, you won’t have to creep out into the cold to turn them off yourself.

Budget Outside the Box(es) and Avoid Christmas and Holiday Overspending

When budgeting for the holidays, we typically think of presents first. But when it comes to overspending and debt, the holidays can be the gift that keeps on giving. Food, alcohol, outfits, and décor are all expenses that can skyrocket this time of year. Avoid these hidden holiday costs by tracking them, reducing how much you spend, and finding creative and inexpensive ways to incorporate them into your special occasions. You won’t miss the spending and the lower bills in the new year will be the gift you give to yourself.