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Stop overspending this Christmas by using these 5 Budget Christmas categories. Christmas is the joyous time of the year when we spend time with family, shower them with gifts, and enjoy great food. But it also can be a huge debt trap. If you’re overspending on lavish gifts and attending every single holiday shindig out there, you’ll be left with a pile of debt after. According to YouGov website, 40% of American parents pay for gifts with a credit card. That’s why setting a Christmas budget is the best way to stay on track, save money, and enjoy the holidays debt-free. But it first starts with understanding the basic 5 Christmas budget categories. 

I’ve created a Christmas budget since 2016, and let me tell you, it has saved me time, money, and most of all, my sanity. With just a little planning and foresight, I have survived each Christmas since debt-free. I save up all year long and pay for all of my Christmas expenses with cash. I look forward to Christmas now instead of dreading it. Stressing out over money during the holidays is a thing of the past. To learn how you can enjoy Christmas debt-free too, click here to learn more

Why you need Christmas Budget Categories

Most of us make a gift list and may even budget how much to spend, but a Christmas budget is more than just budgeting for gifts. There are decorations, holiday meals, and Christmas events that we often forget about. These often forgotten Christmas expenses quickly add up if you’re not careful.

The best way to save money and set a realistic budget is first acknowledging that there are more Christmas budget categories than just gifts. By planning out all of your Christmas budget categories, you’ll realize quickly how much Christmas is really costing you. Adjust your expectations if you can’t afford everything on your list. It’s okay! You can still enjoy a fabulous Christmas on a budget, and you won’t go into debt for it either. That’s a win-win situation! Here are the benefits of using these 5 Christmas Budget Categories:

  1. You’ll set a realistic budget by using the 5 Christmas budget categories.
  2. You’ll stop overspending and using credit cards to pay for Christmas.
  3. You’ll be less stressed since you have a plan.
  4. You’ll save more since you’ve taken the time to decide how much you’ll spend and what you’ll spend it on. Kiss those impulsive purchases goodbye! You’ll have the money saved up in advance so you can snatch up a good deal when you see one.  

Christmas Budget Categories You Need to Include 

Christmas Savings

This is the amount that you can save by Christmas. Figure out how much time you have left till Christmas and how much you can save each month or week. Treat this category like income in a basic zero-based budget.

By starting out with your Christmas Savings category first, you’ll actually see what you’re working with. Most of us start out with our gift list and maybe even allocate how much to spend on each person. Sticker shock happens when we add it all up and quickly realize that it’s more than expected or what we can afford. So start in reverse and figure out how much money you have to work with.  


Gifts will most likely be the largest spending area from your Christmas budget categories. Include all of the family and friends that you plan to buy or make gifts for. Include charitable donations and gift-wrapping supplies in this category too. 

If you’re short on cash, suggest a gift exchange or buying family gifts instead. Give coupons for services that you know are needed like baby-sitting, car washes, baked goodies, or home-cooked meals. If you have a unique skill or talent, consider giving coupons for that too. 

Meals (Holiday dinners meals, potlucks)

This is another category most of us forget about. We either treat it as part of our normal grocery budget and don’t budget enough or we forget about it entirely. If you host Christmas dinner, then you know how expensive it can be. Forgetting to budget for holiday meals can easily throw you over budget. That’s why you should separate holiday meals from your regular budget. You can plan it out and budget the costs more carefully.

Budgeting for Christmas meals also saves you money too. When you sit down and plan out your meals, you can shop early and score great deals. It also forces you to take a step back and assess your plan. Scale back if you have too many main dishes, sides, or desserts. When I first got married, I wanted to make a good impression, so I prepared a lavish feast each year that could easily feed over 30 people. 

I continued that tradition for decades until I realized that I spent way too much, had leftovers in the freezer for months, and threw out more food than I care to admit. It was time-consuming, and not to mention, exhausting. I have since scaled back, cut down on the number of dishes, and no one has even noticed!

Events (Holiday traditions, ice skating, holiday festivals)

Christmas events are often forgotten. Before I started budgeting for Christmas, I always thought I was too broke to splurge on fun Christmas activities. What I know now is that I just didn’t plan and save for them beforehand. Christmas should be about spending time with family and friends, so budget some money for festive events or holiday traditions. Remember to include all costs like admission, souvenirs, or snacks. Setting a budget and saving for it is the best way to ensure that you can enjoy the festivities stress-free. 


I love Christmas decorations and it’s easy to get carried away each year. Creating a list of what you need to replace or purchase will curb that desire to buy everything in sight. New Christmas decorating trends emerge each year. It’s easy to get sucked into it but stick to your budget instead of compulsively buying new decorations that you probably don’t need.  

Tips on Creating a Christmas Budget

  1. Start with how much you can save for Christmas. It’s better to know what you’re working with.
  2. Adjust your expectations if you can’t afford everything on your list. 
  3. Get creative if you need to cut costs. Read the 7 Easy Steps to a Debt-Free Christmas for more ideas and a free printable guide that walks you through the entire process of setting a Christmas budget debt-free.
  4. Be realistic. Don’t start slashing items if you know you’ll need to buy them in the end. By being honest with yourself, you’ll see if you either need to save more or make more money by selling items or getting a part-time job to pay for Christmas. Ignoring it and hoping that the money will magically appear is only a Christmas wish that most likely will not happen unless you take action.

Final Thoughts

Make Christmas wonderful again by not stressing out over money and how you’ll pay for everything. Use these 5 Christmas budget categories, Christmas savings, gifts, meals, events, and decorations, to categorize your spending. I’ve survived Christmas debt-free for years now just by simply setting a budget with these 5 Christmas budget categories. Stop getting caught off guard and whipping out your credit card to pay for Christmas. Slay your holidays today with a budget that not only will help you survive Christmas stress-free but debt-free too.

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