Christmas on a budget. That statement alone can suck the fun out of a holiday season. However, we don’t always have the luxury of an extravagant Christmas where we can shower everyone we know and love with the gifts we know will be perfect for them.

Frankly, sometimes life gets in the way, and we are well, broke and we need to save money at Christmas. When this happens, this doesn’t mean you have to boycott Christmas altogether. It also doesn’t mean you have to be the scrooge that ruined Christmas because you don’t want to start a new year in debt.

You can have Christmas on a budget and still experience all the wonder and excitement that comes with the season.

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Christmas spelled out with Scrabble letters.

Here is how you can successfully execute Christmas on a budget, without being a Scrooge:

Save Money at Christmas with a Budget

Have a budget.

Yes, even if you feel like you have nothing, you need a budget.

Don’t start shopping on Black Friday or Cyber Monday without a plan. List out everyone you need to buy for. Cross out the names you can maybe skip this year (see below). Keep up with all your expenses, and don’t deviate from your budget if you don’t have the funds. You don’t want to start a new year in debt!

Involve family and friends

Communicate your desire for a simple, frugal Christmas this year. If your family is used to giving big gifts to every single person in the family, look for alternate ideas to help save some cash.

The ideas you adopt may depend on your family size, family’s budget, and other factors.

Who knows? There may be other people in your family more than willing to embrace Christmas on a budget this year.

For a larger family, consider drawing names

I grew up going to my grandmother’s small but comfortable home every Christmas morning where thirty people crammed in to eat delicious food and celebrate the season.

While I remember getting the gifts, I remember more the food, the people, and the time together with my cousins. When we were young, everyone in the family bought gifts for all other family members. Eventually, that practice became a bit insane, and so we decided to finally draw names.

Initially, drawing names was not a popular decision. In fact, I’m pretty sure anyone that supported it was considered a bit of a Scrooge. Yet, it did relieve a lot of stress for many of the family members.

When you draw names, you allow family members to buy one really nice gift, rather than gifting junk or clutter no one really wants but that was all they could afford.

Consider not buying gifts (or leaving the adults out) to save money at Chrismas

Once the kids started to grow up in my family, it was decided once you turned 18 years old, you only got a stocking. The gifts were reserved for the children only.

You can do this if you have a big family or if you have a tighter budget this Christmas. Stocking stuffers can still be super thoughtful, but they don’t break the bank as a big gift might.

When considering whether or not to buy gifts for acquaintances or those at work, I say leave them out.

If you feel you must get your coworkers something, give them a nice Christmas card with a thoughtful and personal note with a piece of candy or a lottery ticket.

Sometimes, simply thinking of someone during the holidays and telling them how much you appreciate them is gift enough.

Discuss making homemade gifts or gifts that capture memories

I love homemade gifts! I do recognize they take time and a little bit of creativity and skill. Yet, many of us have skills we don’t give ourselves credit for often enough.

Try searching the internet for gifts you can make that your family may enjoy.

If you know how to sew, even a basic straight line, there are a ton of ideas out there on simple, homemade gifts. If you need some ideas, I have curated some of my favorite homemade gifts for kids.

If you have any woodworking or painting skills, there are lots of ideas out there for those skills as well. The possibilities are quite endless!

If you are a great baker, consider making your specialty recipe and boxing it up nicely for the recipient.

For the tech savvy, you can create a video or slideshow of all your favorite memories with someone special and set it to music (people struggle with the music part, and it can really evoke more emotion).

For those of you with no creative skills, you still have options.

I love Shutterfly and Snapfish during the holiday season. Nearly every day they are giving away freebies for things you can make online. All you pay is shipping. You simply have to load a few pictures be ready to create something at the drop of a hat. However, you will get the opportunity for some cool freebies, like a personalized mug, a calendar for grandma, or magnets for the fridge.

Homemade cookies tied up with a red bow.

Buy gifts on a strict budget

Sometimes family and friends have high expectations for gifts, so you have to get creative. That’s ok.

I have curated my favorite budget-friendly gifts for you. They are thoughtful and some of them don’t cost you a dime, just your time!

While I love these ideas, I still prefer to get everyone on the same page with gift-giving. You could always give everyone a strict cap on budget amounts too. It can make gift-giving fun and creative!

Don’t go crazy on the kids

It is so fun to buy the gifts everything they wanted and needed for Christmas. I have been guilty on more than one occasion.

However, to raise a happy kid, they don’t need excess stuff. They need you. They need the magic of the holidays. That is all.

Create family memories. Focus on doing Christmas without buying too many presents. It can still be a lot of fun. It may even be more fun when the focus shifts from presents to making memories.

Agree to thrift store gifts for Christmas on a budget

OK, so I haven’t tried this one yet, but it’s one I’ve been dying to do but I have to first convince my family.

I love thrift stores, and I love the little treasures you can find at them. You could all agree you still buy gifts for each other, but one rule, they have to be second-hand. Again, your possibilities are endless. Plus, you are having a more sustainable Christmas by giving old items new life!

Got a book lover? Check out some really nice books at Goodwill or Thriftbooks.com.

For name-brand clothes lovers, you can sign up for Thredup and get $10 towards some brand name clothes. They even have kids clothes. Better yet, many of the clothes still have tags on them, but they still count as second-hand in my book, as they are consignment clothes!

For kids, there are many kid consignment stores that sell nearly brand-new toys. Take them out of the second-hand store bags, put them in a really nice Christmas bag, and boom! You have an amazing gift without all the annoying wrapping. A child can open it up and enjoy it immediately.

Other ideas from thrift stores: antiques, favorite movies, cast iron kitchenware, china sets, jewelry and tons of toys.

Decorate simply for Christmas on a budget

If you want to have a frugal Christmas and stick to your budget, this is not the year to go out and buy a brand-new fake Christmas tree for your home.

If you really are in need of a new Christmas tree, use your old one this year and buy a brand new one the week after Christmas deeply discounted. You will be all set for next year!

If you buy a real Christmas tree every year, look for a smaller one that is still festive but won’t break the bank. Sometimes the smaller trees are the best because they are filled with the most ornaments and look so festive!

Don’t buy any new Christmas decorations, ornaments, lights, or anything else. This does not make you a Scrooge. Use what you have on hand already!

If you want to experience fresh, new decorations, consider making some. There are a ton of ideas out there for homemade ornaments, popcorn strings, natural decorations, etc.

You don’t have to break the bank on buying all new stuff.

Lean on experiences and traditions that are magical

One thing I have learned through my experiences with minimalism is that my memories from experiences carry far more weight than my memories of my stuff.

I have received some incredible, thoughtful gifts over the years, but nothing compares to the magic of my memories with family and traditions.

If times are tough, or if you just want to experience a simple Christmas this year, then lean on experiences and traditions for your magic.

Hot coco with Christmas cookies in the snow.

Ideas for making memories when you are experiencing Christmas on a budget:

Start a family tradition

Create a family tradition if you don’t have one already.

Put on your PJs and watch a Christmas movie with the whole family.
Sing carols to your neighbors.
Make hot chocolate with candy canes.
Go see Santa at the mall or at a local event
Go see a Christmas parade. (Get there early for the best seat!)
Volunteer in a soup kitchen.
Volunteer your time to help with your community for holiday events.
Go sledding on Christmas morning.

Whatever it is, talk about it with your kids, tell stories, and enjoy the moment. Your kids will love carrying on your family tradition for years to come.

Drive around and look at Christmas lights

This is probably my kids’ favorite activity around the holiday season. They get so excited when I am driving them home from school and take a surprise detour to go look at all the Christmas lights. They literally squeal with delight.

Go see Santa

Santa is at a number of events throughout the holiday season, and many of those events are free.

Take advantage and go see the big guy in a red suit to get your dose of holiday magic, even if you have bigger kids who don’t normally get excited about Santa anymore.

Don’t be a Scrooge, just stay on budget!

Christmas on a budget can still be fun. You can still give gifts, and you can still experience the magic that comes with the holiday season.

Christmas is not about the giving of meaningless gifts or gifts that will put you into debt for the upcoming year. It is about celebrating the birth of Christ, loving each other, and giving thanks to each other. You can do Christmas on a budget without being a Scrooge. I promise.

Need more gift ideas? Check out the following posts:

What are your favorite Christmas on a budget ideas?

How to Have Christmas on a Budget Without Being a Scrooge