Save Money for Christmas: How to Budget Your Holiday Spending

Getting worried about how you will save money during this holiday season? Check out our tips for how to budget your holiday spending!


The arrival of the holiday season means dipping into your bank account a little more than usual. This can quickly lead to you feeling depleted financially and strapped for cash. However this does not have to be the case, as there are ways to budget your holiday spending and save money. If you are wanting to know how to budget your holiday spending efficiently, take a look below at a five step system to get you started. Creating a budget for your holiday spending doesn’t need to be difficult, in fact it can be quite easy and fun! Take a look at a few ways to save money this season!

How to Budget Your Holiday Spending: Five Easy Steps to Save Money

1. Identify your needs.
The first step for how to budget your holiday spending and save money is to identify your needs. Remember, this is not what you want to buy, but what you need to buy. Begin by creating a simple list of your top ten needs. This could be gifts, food items, party supplies, decor, etc. Once you have identified the top ten needs, create a second column of wants.

2. Plan your shopping strategy.
You want to have a plan of attack that includes price matching, using coupons on sale items, and taking advantage of specific store sales. Once you know this information, plan your shopping strategy. Next to each “need” item, note where you can find the item and what the best price is for it.

3. Identify your available cash.
The next step in how to budget your holiday spending is to identify how much available cash you have to work with. This means CASH only, not credit. To identify the amount, take your income and subtract all of your bills and basic expenses for the month of November and December. The surplus is your available cash. This will be the amount you have to work with without going into debt or using credit.

4. Re-evaluate your needs list.
Now that you know what your available cash is, take a look at your needs list again. Try to assign a dollar limit on each need. This will be like putting together a puzzle, as you can only assign a dollar amount to each item adding up to your surplus cash. If you have more items than you have cash for, it is time to start making some cuts and seeing which needs you can let go of.

5. Divide your surplus cash into categories.
Last but not least, you will want to make an envelope for each holiday need category. For example: Gifts, Decor, and Holiday Dinner can all be categories. Based on the amounts you have determined on your list, place the appropriate amount of money in each envelope to fulfill each category. Now the trick is, when you shop you are to only use the designated envelope. When that amount is gone, it is gone. Period.

Budgeting your holiday spending to save money takes a little planning and a lot of discipline, but it can be done. Give these five steps a try and see if you can figure out how to budget your holiday spending in a way that is easy and effective. Remember, while it may seem hard at first, entering the new year debt free will feel amazing. Give these tips a try and get planning your own holiday budget today!

What is your biggest challenge when it comes to holiday spending?

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