5 Tips to Prepare Financially for Christmas

By Carrie Sullivan

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Christmas is the same time every year and yet somehow, we are constantly surprised at how quickly it seems to sneak up on us.

Here are 5 tips to help you get financially prepared for Christmas.

Are you financially ready for Christmas this year or have you fallen into the same old trap again with no Christmas fund and no plan?

#1 Determine Your Christmas Budget

Have a clear understanding how much money you can afford, for Christmas.  Be realistic and budget within your means.  Don’t try to do this in your head, write it down!  Writing it down gives you a good visual without having to rely on your memory.  Write down all your income coming in from now until Christmas and all your expenses due between now and Christmas.  Subtract your total expenses from your total income to determine your remaining cash flow.  Once you know how much you have left you can determine how much you can comfortably spend on Christmas.

#2 Short on Cash – Tighten Any Unnecessary Extra Spending

If your remaining cash flow is slim after paying expenses, look for ways to cut back any unnecessary, extra spending.  Can you pack a lunch instead of eating out?  Can you entertain at home by cooking dinner for friends instead of going out for dinner and drinks?  Can you meal plan around your local grocery store sale flyer and clip coupons to stretch your meals and save on groceries?  Get creative and look for ways to spend less so you have more wiggle room in your Christmas budget. 

#3 Determine How Many Gifts You Need

Make a list of how many people you are buying gifts for and, using the Christmas budget you set based on your available cashflow.

  • Determine how much you are able to spend on each person
  • Create a tracking sheet for your Christmas budget tracking each person, the items purchased for that person and the total amount spent.  This will help you stay within your budget and control impulse buying.  Check out my free Christmas Budget Tracker

#4 Use the Envelope System

Once you know your Christmas budget and how much you are spending on each person use the envelope system to control overspending.  

  • Write each person’s name on a separate envelope with the total amount you are spending for that person
  • Put the total cash amount for each person in their respective envelopes
  • Track your spending on the outside of the envelope so you don’t go over your limit

#5 Sales

Keep track of items you want to buy for each person by keeping a list or making a Pinterest board and then watch for sales.  If you are able to get an item on sale that doesn’t mean you have to make up the difference because you are below your budgeted amount.  

For example: You are spending $25 on your nephew and he wants a Lego set. If you find it on sale for $12, you don’t have to spend another $13 just because you budgeted $25.  

You got the gift he wanted, and he doesn’t know how much you budgeted or spent on him.  

Christmas definitely isn’t all about the gifts and there are certainly many creative ways to enjoy Christmas and giving without spending money.  

You can offer experiences instead of material items.  Here are some ideas: 

  • You can have your friends over for “Game Night”
  • Have your grandkids over for “Movie Night” and a sleepover.  
  • Take your kids camping or to the beach or maybe have a one-on-one day with each of them, planning their favorite games, crafts, meals and treats!

These are just a few tips to help you better prepare financially for Christmas, but it’s certainly not an exhaustive list by any means.   I hope you find them useful.

Now it’s your turn.  What are some ways you will be financially prepared for this Christmas season?  Do you have any fun, creative things to share that your family does for the holidays to celebrate Christmas without breaking the bank?

About Carrie:

Family Money Mindset Coach with love and passion for family values and life-long learning.

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