How to Celebrate Christmas on a Budget

Chelsy Meyer

Exchanging gifts can be nerve wracking! Whether you’re giving a gift to a family member, spouse, friend, or coworker, it’s hard to know exactly how much to spend, who to give a gift to, and what to get them. When you’re on a budget, it can make the gift giving holidays even more awkward. In order to survive the season, it’s important to create a budget and stay within it. Create a plan, get creative with problem solving, find ways to give that will also give back to you, and to understand the world of gifting cards, gift certificates, charities, and more. Luckily, it really is the thought that counts.

Table of Contents

Gift Giving Within Your Budget

If you haven’t created a personal budget, now is the time. You won’t know how to gift within your means if you don’t have a good idea of what your budget will allow. The earlier you discover the extra cash in your budget, the easier the gift giving season will be. Some of the more seasoned gifters have mastered the art of buying gifts all year round so that by the time Christmas comes around, they are ready and not draining all of their financial resources the month before the holidays.

In a perfect world, budgeting throughout the year for big gifting seasons like Christmas is the best idea. However, that’s not realistic for the majority of consumers. You’ll have to work with your budget and find frugal gifts, or begin using a credit card to fund this time of year. Having a holiday credit card or utilizing credit for holiday shopping isn’t a bad idea as long as you don’t go overboard or put yourself in debt you can’t come back from. Not only that, but being mindful of your debt-to-income ratio is important so that you don’t ruin your credit in your last minute shopping. If you do use a dedicated holiday credit card, it is easy to monitor your balance to ensure you don’t charge more than you budgeted for.

Create a Gift Plan

Staying within your budget is a lot easier when you’ve created a gift plan. This will include who you need to get gifts for, how much you want to spend on each person, when to purchase the gift, and what you may want to get them. This will ensure you stay within your budget, that you don’t forget anyone, that you spread out your spending, and that you put some thought into what to get them.


  • Don’t wait until December: This will put a wrench in your budget, and you’ll also miss out on Black Friday deals which can be a big money saver. Give yourself a few months to plan your purchases or you’ll spend too much, probably forget some gifts, and your gifts might not have as much heart behind them.
  • Get some emergency gifts: One of the rules of gift giving is reciprocation, so what do you do if you get a gift but don’t have one in return? What do you do if you’re invited to a last minute holiday party? Keep a few extra tins of cookies, bottles of wine, or festive mittens in case you need a gift ASAP.


Gift Exchange Problem Solving

When you’re trying to survive the gift giving season, an important aspect is to be transparent about your expectations (as well as your limits) within this season. Your limits may be financial, rooted in anxiety, or about time concerns. If you don’t know what to get someone, ask them to make you a list.

Some people aren’t great at gift giving and need guidance, and that’s okay — even if it does seem difficult to ask when gifting is so reliant on the surprise factor. If your budget is low, consider discussing a secret Santa gift exchange with your family or co-workers. This way, you can all buy one gift instead of a gift for everyone. You can also set price limits with friends and family, purchase gifts online if you’re concerned about time to shop, or set up white elephant gift exchanges with family or friends.

For some people, giving gifts can cause anxiety. Just be sure to follow a few gift giving rules to get you by:


  • Keep gifts appropriate: Especially in a work setting, keep your Christmas party gift appropriate. Additionally, avoid gifts involving weight loss or self-help in any setting.
  • Don’t re-gift: Unless it’s a white elephant gift exchange, don’t re-gift. If you don’t like something, donate it or return it.
  • Don’t gift selfishly: Gifting a picture of yourself, or something for someone in your home that you’d like to use too, is not really getting somebody a “gift.” Consider something more meaningful for them, and less about you.  
  • Make your gifts matter: Some offices plan charity gifts, some parents prefer a homemade gift, and some neighbors love home cooked gifts. Don’t discount those; your time and thought in a gift matter more than its dollar value.
  • When all else fails, gift pragmatically: This doesn’t mean buying socks because they are useful, it means gifting what a person will use. A gift card to their favorite coffee shop, a tea infuser for a tea enthusiast, or a gas card for a college student are all useful gifts that they will really use that also shows your knowledge of what they may need.


Gifting in Ways that Give Back to You

It seems a little backward to look at ways that gifting can benefit you. However, there are ways to double up on your holiday spending by making purchases that make the gift recipient smile and give back to you as well. Turn shopping into investing by purchasing things for those in your household that will improve their quality of life, or keep your household from spending more money later. For instance, purchasing a good mattress has lasting positive health effects that can improve their productivity and overall health. Purchasing a good laptop can help their work performance, purchasing a new car can eliminate costly fixes to an older, problematic car.

In addition to that, there are many ways you can utilize credit card spending that will give back to you and your household. For instance, making large Christmas purchases on your credit card can pay you back in terms of credit card rewards. Some common rewards include cash back bonuses, airline miles, hotel rewards, or gas rewards, among so many others. With some careful planning ahead, you could even get all your holiday gift shopping done in one store. That can make it worthwhile to sign up for that store’s branded credit card, to take advantage of the shopping rewards or even a signup bonus.

If your credit is in a good place, and utilizing your credit card or a holiday credit card won’t put you in debt your finances can’t handle, using a credit card for these purchases may help your credit and pay you back later.

Cards, Gift Certificates, Charity, & More

For some, a card, gift certificate, gift card, a donation, or other pragmatic gifts can be difficult. The key is gifting these things in a way that helps the recipient understand the intent behind it. Gifting a card may be inappropriate for some people on your gift list. If your significant other gives you a thoughtful gift and you give them a card, the reciprocation may be off in terms of equal spending and the thought that went into it. However, gifting a card to out of town loved ones or people you don’t see often is fine.

Gift certificates and gift cards can be great, but some may think they are impersonal. Make them personal by creating a gift box surrounding the theme of the gift card. If it’s a gift certificate for a spa day, put the certificate in a basket with lotion and an eye mask. If it’s a gift card to a clothing store, put it in a box with a scarf and their favorite candy.

If you are gifting a donation, be sure that the charity is one that means something to the recipient, not just you. If they love animals, donate to an animal shelter in their name, for instance. You can add a personal touch by gifting the donation with a tangible gift, like a book loosely surrounding the cause you donated to. Be sure not to make your donation political if you don’t know them well or your well-intentioned gift may become offensive.

The gift giving holidays can be stressful, especially if picking out gifts isn’t really your strong suit. Buying gifts that won’t break your bank, making a gift plan, knowing how to maneuver through gifting issues, buying gifts that give back to you, and understanding how to give cards, gift cards, and donations can be tricky. Just remember that a gift doesn’t have to be expensive, it just has to be thoughtful. A gift should show the recipient that they are important to you and that you know something about them. Gift from the heart without bad intentions and you’ll survive this year’s gift giving season.

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