How to Save Money on Christmas

Christmas is a time that it is easy to overspend on friends and family.  I am not  saying to be cheap or to be a scrooge, the goal here is to make sure, when the holidays are over,  you don’t turn around and realize you are really taking it in the pocket.

Set a Budget

I have found the first key to not overspending in any situation is to make a budget.  My wife and I use a mini budget to make sure we don’t overspend on Christmas gifts.

We set a specific amount and then divide that amount up, in different portions, between parents, siblings, nieces and nephews.

Remember to include a small category for parties and other obligations where we need to purchase gifts. In our min-budget this is called the unexpected category.

I am a fan of the mini-budget form from the I Was Broke. Now I’m Not. team. Here is a sample of what our mini-budget might look like using their spreadsheet:

As you can see we left a couple of slots in case we want to add someone.  This way every dollar is designated for a specific category and we know we will not be spending more than we budgeted.

Now many times I will be able to get gifts for less than we budgeted, this just allows me to move that money to another category to cover a deficit or to spend a little extra on my wife’s present #HappierChristmasForMe.

Saving Money on Christmas Gifts for Adults

Since we now know how much we are spending on each person or group of people the goal is to stay within the budget.  Adults tend to be specifically difficult since for many people any gift you can afford that person already has at least one.

Most people resort to purchasing the latest gadget, but I suggest we get more creative and look at gifts that my be more memorable than the latest toy.

Create a Theme

The primary example are gifts that I tend to call novelty gifts but many times they are the gifts that people remember.  My sister-in-law (wife of black sheep) is a master of this type of gift.

For years she would come up with a theme of what the gifts she and black sheep were giving the family.

One year it was cookies and we all got gifts that either had cookies inside, had pictures of cookies on them (I got Oreo boxer shorts), or allowed you to make cookies from a mix or recipe.

It took a lot of thought to find different cookie gifts for everyone but it makes it so that the whole family was looking forward to the next gift someone was opening just to see what was next.  With a good idea and dedicated shopping you can find inexpensive yet fun gifts for the entire family.

Discounted Items

The secondary method I have used for adults is to purchase something at a massive discount.  My favorite is still Restaurant.com where you can purchase a $25 gift certificate for $10 and even less if you have a discount code.

The discount codes allowed me to purchase $50 gift certificates for each family member and spend less than $20.  This also allowed them to pick the restaurant instead of me guessing what best fit their dining preferences.

As a result, each couple got a night on the town at a very low cost and didn’t break my budget in the process.

Using these two methods has kept our family’s Christmas spending low, kept us from overspending our budget, and allowed us to provide gifts that have value to the one receiving them.

Spending Less on Christmas Gifts for Kids

Buying for kids is a completely different ball game than buying for adults.  It can be very expensive or very inexpensive and no matter what you do they are still going to be playing with the box that the gift came in at the end of the day.

Gift Exchange

My brother-in-law’s family has come up with a great system for buying gifts between all the cousins. There are 14 of them and each one draws another cousins name out of a hat.

This way each family is only responsible for buying gifts for the exact number of children they haves (and gifts they will receive).  They also set a specific amount of money that they are going to spend on each gift ($25 is a typical amount).

This works great for large family Christmas gatherings to reduce the total number of gifts being bought and the people receiving the gifts get something a little nicer than what family members could afford buying 14 gifts instead of just three.

Buy Ahead

The first and most important step is to buy year round.  Do not let Christmas sneak up on you because you can get much better deals throughout the year by purchasing when you see a great deal instead of purchasing out of necessity.

This also allows you to have stockpile of gifts so that if an unexpected birthday party pops up you do not have to go pay full price for a gift that you will get no joy in seeing your child use.

Buy to their Interests

Depending on when you are reading this article, it may not be possible to try the year long approach. If time is short, you need to consider finding inexpensive gifts that the kids love.

If you are buying for someone else’s children a big hit is anything that makes noise.

I will warn you that this may start a gift war where your family members are now giving your children toys that make noise in retaliation for your noise making gift.

With that in mind noise making gifts are usually inexpensive.  I bought a voice changer for one of our nephews a couple years back.  He played with that little box for hours on end.  It was a $5 gift and was one of his favorites.

In the same vein ( minus the noise) I bought one of my nephews, who loves to be silly, a set of fake teeth.  He played with them till they fell apart.  That gift only cost us $3.

So the key really isn’t noise but purchasing inexpensive gifts that fit with a child’s personality, instead of caving to spending more on the cool new gadget.  This is how we keep from breaking our budget with our family each year.