Does Christmas sometimes leave a nasty aftertaste in your mouth as the bills roll in and the interest expenses mount? If so, you might greatly benefit from planning a Christmas budget.

Planning your Christmas Budget

If you head into the Christmas season without knowing how much you can spend, you might end the Christmas season feeling like Ebenezer Scrooge – haunted by Christmases past. Here are a few tips for getting your Christmas budget set up:

  • Plan your budget early. Don’t wait until the Christmas season is upon you. Start working on your budget early, and have it ready to go before you’ve spent a single penny on Christmas expenses.
  • Plan your expenses. Your budget won’t be of much use if it doesn't account for all of your Christmas expenses. Don’t include gifts just yet. For now, just try to think of all the extra expenses Christmas entails. Try to be pretty detailed, even including seemingly trivial items such as gift-wrapping paper and postage for Christmas cards. And if you’ll be traveling for Christmas, be sure to add in that expense.
    • Reflecting back over the past several Christmases can help with this step. Think of everything you spent money on in recent years during Christmas, and decide whether those same expenses will apply this year. Examining past Christmases will also be helpful in estimating dollar amounts for each of this year’s expenses. Here are a few budget categories for Christmas:
    • Gifts
    • Charitable Contributions
    • Food
    • Decorations
    • Parties
    • Gift Wrapping
  • Create a worksheet. It doesn't have to be anything fancy. Maybe just a sheet of paper, maybe a spreadsheet on your computer – whatever you’re most comfortable working with. Dave Ramsey, a personal finance advisor, created a free Christmas budget application online at, which is an easy-to-use resource for your Christmas financial planning.
  • Decide how much money you’re going to spend. Do you want to dip into your savings? Decide how much of your savings you’ll use, and add that to your ‘Christmas Funds Available’ total. Are you going to get a Christmas bonus from your job? Add in the portion of the bonus you want to spend (if you’re certain you’ll be getting it!).
    Be honest with yourself on this step. Don’t fudge the numbers. Whatever number you come up with here, it must be accurate or your budget will be worthless.
  • Determine how much you can spend on gifts. All you have to do now is subtract your expense total from your available Christmas funds. The amount of money that's left is the total you can spend on gifts. Now you can make a list of all the people you plan to buy for, and decide how you’ll allocate your available gift money.
  • Family
  • Friends
  • Coworkers
  • Boss
  • Secret Santa Parties
  • Your Child’s Teachers
  • Service People (Mailman, Housekeeper, etc)
  • Neighbors
  • Your Child’s Friends
    You can just simply divide the number of people into your available gift money to calculate an amount per person. Or more likely, you’ll be spending more on some people, and less on others, so you’ll have to do some juggling to get the numbers to come out even.
    But either way, gift shopping should be a bit easier, because you’ll know exactly how much you can spend on each person. If you come across a gift idea that exceeds the budget, you can discard it instantly. No need for back-and-forth fretting over whether you can afford it.
  • Keep your budget up-to-date. Once your budget is finished, don’t just assume that everything is going to work out the way your budget predicts. Go ahead and write down each expenditure, and keep a running total of money spent. Compare actual expenses as they occur with the original estimate to make sure that they match. If not, you’ll need to make an adjustment to the amount you can spend on gifts.


There’s no denying that it will take some work to plan your budget and keep it current. But by planning your Christmas budget and having the discipline to stick with it, you’ll make Christmas much more enjoyable. You won’t constantly be fretting about how much you can spend, and you won’t have to worry about starting the New Year head-over-heels in debt.

And you won’t have to worry about late-night visits by the financial ghosts of Christmases past.