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How to Create a Christmas Budget that Works for You!

A Christmas Budget is important so you don’t go hog-wild and overspend for the holidays. Learn how to create a budget for Christmas expenses, and easily track Christmas spending with a free printable holiday budget template!

Christmas is coming! And that can only mean one thing… Cha-Ching! And there goes your bank balance!

Yup, Christmas can be fun… but also super expensive! According to a study done by Gallup, the average American expected to spend $942 on gifts in 2019. And that’s not including holiday entertainment and extras.

If money is tight this Christmas, then it’s especially important that you make sure you’re sticking to your budget. However, it’s easy to make a holiday budget and then throw it out the window once it’s time to actually buy things (anyone else get completely side-tracked by all of the cute Christmas decor at Target?!).

Christmas budget free printable with text that says how to create a Christmas Budget that works for you

If you’re tired of overspending every holiday, then here are some tips for how to create a Christmas budget that works for YOU!

Split expenses into Christmas budget categories.

The first step in creating ANY budget is to think of what categories of expenses you have. Obviously, gifts are probably going to be one of the biggest (and most expensive!) things on your Christmas budget. But there are other not-so-obvious expenses to think about, too.

Most people don’t think twice about getting a gingerbread house kit or going to see a tree lighting. You grab that hot chocolate while going to see a Christmas concert or the picture you pay for when you go to see Santa. These are all things that can really put a dent in your December budget.

Here are some common categories for your Holiday Budget:

gift box made out of money with red bow


This one is pretty self-explanatory, but when you’re planning your Christmas budget you may forget about gifts for people other than family members. Here are other people that you may need to buy gifts for, so you don’t forget to include those in your holiday budget also:

  • Teachers – Could include others besides just your kids’ main teachers: homeroom teachers, music teachers, speech teachers, gym teachers, etc.
  • Bus driver
  • Mail delivery person
  • Package delivery people – I’ve got an awesome FREE Printable you can use to make Holiday Snack Baskets for delivery drivers here!
  • Neighbors
  • Trash pickup person
  • Church group members
  • Your child’s friends – My girls like to get small Christmas gifts to exchange with some of their best friends at school.

And don’t forget about smaller gift expenses like stocking stuffers!

Holiday Fun & Entertainment

One of the greatest things about Christmas time is enjoying fun activities with your family… but all of those special parties, concerts, and family outings can get expensive.

Be sure that you budget for holiday fun like:

  • Holiday travel – If you go on vacation during the holidays, then I’m sure that’s a BIG expense!
  • Christmas plays and concerts – The Nutcracker Ballet, holiday symphony, etc.
  • Christmas Eve donuts and hot chocolate – My family and I get sweet treats on Christmas Eve and then drive around and look at Christmas lights… it’s one of our MANY Christmas Traditions that Kids LOVE!
  • Visiting Santa – and the overpriced pictures that go with it!
  • Craft supplies for Christmas crafts
  • Christmas movies

Holiday Food

When you’re budgeting for Christmas spending, you can’t forget about the best part… the food!

  • Gingerbread house
  • Christmas Eve dinner
  • Christmas dinner
  • Christmas breakfast
  • Going out to eat when family comes to visit
  • Baking supplies and ingredients
  • Party appetizers – If you need ideas, check out this post with 50+ Fancy (but EASY) Holiday Appetizers!
  • Jesus’s birthday cake

Holiday Decorations

If you’ve already got a whole collection of holiday decorations, then you may not need to allocate much money for this part of your Christmas budget. But, you could still have expenses for decorations like:

  • New Christmas lights – Because you know that you’ll probably discover a few strands that have burnt out!
  • Fresh evergreen wreath
  • New holiday-scented candles
  • A live Christmas tree
  • New ornaments – We let each of our daughters pick out ONE new ornament every year. Then I put a small tag on the ornaments with the year, and we’ll give them all of their ornaments when they get married. This is a FUN and sentimental way for your kids to start their own ornament collections for when they have families of their own.
piggy bank on top of Christmas presents


Whenever I create a budget, like this awesome Budget Spreadsheet that I use to manage my finances, I make sure to include a category called “Miscellaneous”. There are bound to be some holiday expenses that don’t really fit into another category, so group all of those “budget outliers” here.

These could include holiday spending like:

  • Postage for Christmas cards
  • Presents you buy for the Angel Tree
  • Money that you drop in the bucket for the Salvation Army

Make a list… and check it twice!

After you’ve thought about your spending categories, it’s time to make a list and check it twice… See what I did there?! (“He’s making a list, and checking it twice…”). 🙂

Make a list of EVERYTHING that you anticipate spending money on, using your categories as a guide. These will be your “estimated expenses”. So for instance, if I expect the ingredients for Christmas breakfast to cost $50 then I would write:

Christmas Breakfast – Pancakes, eggs, sausage, bacon, fruit salad, OJ – $50

Or you could just write “Christmas Breakfast – $50” if you’re not super-detailed like me.

For gifts, you can set a budget for each person’s gifts, and then add those numbers together. That will be your “estimated expenses” for Christmas gifts.

piggy bank wrapped with christmas lights

Set holiday spending priorities.

After you’ve made a list of ANYTHING that you could spend money on during the holidays, you need to prioritize what things are most important to you. Start with the things that you will have to spend money on such as gifts and food, and then work on the things you would like to do such as go see a Christmas concert.

Make a numbered list of your Christmas spending priorities, with #1 being the HIGHEST priority… probably Christmas gifts. And realize that if you’re on a tight Christmas budget, then there may not be enough money left over for the things that are low on your priority list.

Figure out how much money you need, and make sure your Christmas budget is realistic.

After you’ve got a list of your estimated expenses, it’s time to add everything up to see how much money you anticipate spending on Christmas. If that amount is WAY more than you can afford, then you should adjust your budget accordingly.

You can also use your total estimated Christmas expenses as a savings goal. I find it much easier to save money if there is an end goal, which is why it’s nice to have an idea of how much money you think you will need for the holidays. Then, you can start planning for ways you can save money NOW.

If you have absolutely NO idea how much money you have left over each month after you pay all of your monthly bills and living expenses, then I can help you with that, too! Read this post for Tips to Keep Track of Income and Expenses, so you know EXACTLY what your net gain (or loss) is each month!

Use a Christmas Budget Template to keep track of holiday spending.

Okay, now that you’ve got a GREAT list of estimated Christmas expenses, it’s time to keep track of your ACTUAL Christmas spending.

You need to know how much you’re spending so that you can adjust as time goes on. For instance, if your husband’s fly-fishing rod ended up costing $50 more than you expected (boo!), but you got a Groupon for half-off the Christmas light show (score!), then you can move your budget around to accommodate those various expenses.

But, if you don’t have a good Budget Worksheet set up to keep track of Christmas spending, then you won’t have a CLUE as to how much money you’ve spent so far, and you’ll probably WAY over-spend for the holidays.

You can grab my FREE printable Christmas Budget Worksheet at the end of this post!

When you run out of money, cut yourself off!

Here’s the ugly side of budgeting (and why my husband calls our budget “the B-word”)… Haha!…

When your run out of money, that’s it!

Cut yourself off!

Lock up your credit cards!

Whatever you need to do… But be harsh about not adding more money to your budget after you’ve spent all of it.

You also need to make sure that you’re total “estimated expenses” aren’t GREATER than the total amount of money that you actually HAVE to spend on Christmas. While it would be great to spend $100 per person on gifts, if you don’t have the money, you can’t do it!

Unless you use credit and take on more debt, and…

Credit card interest is the gift that keeps giving… month after month… and not in a good way!

Amy @ The Savvy Sparrow

This means you need to be realistic and only budget for the money you do have.

Use last year’s expenses to help you set this year’s Christmas budget.

If you’re not sure how much to spend or you want to make sure your budget is realistic, look at what you spent last year during November and December. This will give you some idea of what you spent on your holiday meal, gifts, and other aspects of your holiday spending.

While it can be challenging to figure out what exactly you bought from a statement alone, you will at least have a better idea of what you spent last year so that you can set more realistic goals for this year.

Free Christmas Budget Template

Want my FREE Christmas Budget Worksheet to help track your holiday expenses?

Christmas budget worksheet on a table with gifts

Grab the FREE Christmas Budget Printable HERE!

Looking for even more printables to help with your Christmas planning? Check out my FULL Christmas Planner HERE!

graphic showing Christmas planner printable

Whether you’re looking for extra money for holiday shopping or want to get your holiday spending under control, hopefully these tips have helped you out!

Do you have any tips for budgeting for Christmas? What do you splurge on during the holidays? Leave me a comment down below! I’d LOVE to hear from you!

And happy nesting!

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  1. I think this is the problem of each family before the Christmas. In our family we always try to plan what we will buy. but as only we get to the store – everything goes down… So thank you for this article, i hope this year everything will be much better.

    1. Hi Felicia! So glad you liked the post! Hopefully it will help you with your Christmas spending this year. Thanks for your comment! 🙂