10 ways to enjoy the holidays on a budget

Wow. I don’t know about you, but now that the holiday season is in full gear, it seems that every time I turn around there is another catalog, sale or once-in-a-lifetime offer screaming at me through a bull horn. It’s almost comical, really, with the economy the way it is and America about to fall over the fiscal cliff. It almost feels like we’re all being invited to grab a shovel and dig ourselves into our own personal debt holes!

I know these are just businesses run by people and families trying to make a living like the rest of us. However, I still have this irrational hope that a catalog or advertisement will come to my mailbox just once with these words written across the top, “You don’t need any of this stuff to have a magical and memorable holiday season. Save your money for a rainy day.”

And that’s not bad advice, especially if you don’t have much money to spend in the first place. I’ll never forget the Christmas we had $60 to spend on our family of four. To be completely honest, I was pretty depressed when I realized I couldn’t buy or do most of the things on my list that year, but that’s one of the reasons I’m writing this post today. If I could go back in time, I would tell my young mom self that the best Christmas memories really are free, and it’s even kind of fun trying to prove it! Following is the list I should have been perusing that year instead of my favorite “top toys of the year” list. (Oh, those darn toy catalogs!)

But first, let’s take a moment and get into the right frame of mind. Just a quick perspective check, so please, repeat after me: The holidays are NOT about the presents. Memories are NOT made with money. Stuff does NOT create happiness.

There. Doesn’t that feel better already?

That being said, the holidays wouldn’t be the same without special foods, decorations, activities, and yes, gifts. So here is my list of 10 ways to enjoy the holidays on a budget. (And please add your ideas in the comments section below!)


  1. Uh . . . create a budget. This is the no-brainer that many people fail to do, and failing to create a budget is like planning to overspend. (Just close your eyes, tap “approve” and wait for the bill.) Not only is it bad for your financial health, it’s often bad for your emotional health. I almost had a panic attack last weekend while shopping online during the Black Friday madness before I finally set some financial parameters for myself. There is peace in having sensible limits. Know your limits, then stick to them like the peanut butter on your refrigerator door. You could consider including (or excluding) the following in your family budget: tree, lights, decorations, music, movies, special foods, cookie ingredients, craft supplies, photography, cards, stamps, event tickets, dining out, special occasion clothing, charitable giving, and GIFTS (don’t forget teachers, neighbors, co-workers, etc.).
  2. Get the whole family on board. Your plan to be frugal doesn’t mean beans if your significant other is running around pell mell with a credit card. And the kids need to know what to expect, too. Have a parents only discussion followed by a family meeting to map out what this holiday season will look like so that everyone is happy come New Year’s. (April’s last post is great for this.) Focus on the positives and downplay the negatives. For example, instead of saying, “Look kids, you’re only going to get one present each this year. Mom and Dad are pretty broke . . .”  you could say, “Everyone will get one thing they would really like up to X amount of dollars.” You get the idea.
  3. Focus on activities, not presents. I know some mothers who tuck festive activity ideas into their advent calendars instead of treats or little presents. Isn’t that fun? And really, all the free, traditional holiday activities such as caroling with hot cocoa, going for a drive to see the lights, and making homemade treats to eat while watching a favorite holiday movie are some of my family’s favorite activities during this time of year. Don’t forget that many cities, churches, and even malls host various free holiday concerts and events (sometimes associated with tree lightings) that are almost always family friendly.
  4. When it is time to focus on presents, do some serious bargain hunting. No, I am not suggesting you sleep in front of your local discount store the night before Black Friday only to end up in a fist fight over a battery-operated car for your little darling. I am, however, suggesting you consider buying used through your local classifieds, secondhand stores or eBay. (Even garage sales if you live in an area that’s warm.) You can find some really fantastic, gently used toys at a great price if you aren’t opposed to the idea of getting something second hand. I love secondhand stores — buying and selling. Personally, I will be selling a rather expensive and never used Calico Critters play table at a good price through my local classifieds this year. (Can you believe I accidentally purchased two last year and managed to miss the return date? Can you say budget buster? Does anyone want it before I list it? Hee hee . . .)
  5. Remember that experiences make great presents too. As long as you’re really committed to following through, a coupon for a private date with Dad or an afternoon alone with Mom might mean more to a child than you could ever imagine. One of my favorite gifts from my husband was an entire day to myself when all of my children were very young. That was far more valuable than any piece of jewelry or expensive kitchen gadget! Make it fun by wrapping up your “coupon” in a big box (maybe with lots of boxes inside getting gradually smaller) or send the recipient on a treasure hunt throughout the house.
  6. Have a potluck. If you happen to be the person hosting the family holiday party, go potluck style. For your own dish, research delicious but inexpensive recipes. Older, traditional recipes tend to be less expensive, so now might be a great time to go back through Grandma’s old recipe book, especially if there will be family members at the meal who know and love her recipes. If you’re feeling bad about not being able to have all the extras that you’re used to, just think of all the calories you’ll be saving. (I’m serious about that. I have such a love/hate relationship with decadent holiday foods. I can’t say no to them!) Just like the holidays shouldn’t be about the presents, they shouldn’t be about the foods either. Keep the focus where it should be: on making happy and meaningful family memories.
  7. DIY. You can save a ton of money by doing things yourself. The same year we only had $60 for presents, we decorated our little artificial tree with strings of popcorn, cranberries, and candy canes. Each year my children love to make paper snowflakes for the windows and I’m always amazed at how truly beautiful they are. You can also make your own inexpensive teacher and neighbor gifts, wrapping paper and gift tags, as well as treats. It doesn’t take much searching on Google or Pinterest to come up with a wealth of ideas. (Please notice the pun.) And you should definitely make things with the skills you already have. Are you good at photography? Knitting? Baking? Then that’s the direction you want to go.
  8. Draw names. For heaven’s sake, if you have a big extended family, stop the insanity and have everyone draw just one name (separate the kids from the adults) and then push for a price limit to make it fair for everyone involved. We’ve been doing this on both sides of our family for years and it is such a time and money saver. Another benefit is that it is much easier to come up with a truly personalized gift since you only have one person to worry about. I’ve even heard of some families who have a stipulation that gifts be homemade and cost less than $5! The results are both wildly creative and very personal.
  9. Make a list of all the things you don’t need. Even though I’ve wanted a super cute advent calendar for years and still don’t have one, Christmas has managed to come and go year after year. Here’s a short list of some other “extras” you can feel okay about checking off your list of things you never needed to spend your hard earned money on in the first place: fancy ribbons, bows and gift tags, special table linens and settings, elaborate outdoor Christmas lights, and professional photos for your Christmas card. I should confess here (because it’s a good tip) that I am planning on buying that advent calendar this year–when it goes on sale after Christmas. If you don’t mind waiting one more year for that “must have” thing, the after holiday sales are the way to go.
  10. Focus on giving, not getting; spiritual, not secular. Doing acts of service together as a family will not only give you warm fuzzies while creating meaningful memories, but it will also help you feel a little less like the less fortunate. Go caroling at a senior citizens center. Make simple hygiene kits from dollar store items to take to a homeless shelter. Ask your kids if they have any friends who could use a plate of your family’s best homemade goodies. A little goes a long way when it comes to giving. And depending on what holiday you are celebrating, you will definitely want to create some meaningful traditions that revolve around your “reason for the season.” Those are some of the best freebies of all!

QUESTION: What are you favorite ways to enjoy the holidays on a budget?

CHALLENGE: Please share!


  1. Cat

    We never go into debt for Christmas because we set up a savings plan for it every January. We take a set amount out of every paycheck and put it into the gift/Christmas fund. We also set a budget for how much we’re going to spend for each person for Christmas, birthdays, anniversaries and other gift giving occasions. There’s always something unplanned that pops up but because we’ve set stuff aside for the planned stuff the unplanned doesn’t hit us so hard. We also have budgeted fun stuff into our plan too. Each year we manage to get a few more decorations or special dishes or something. Usually we get it after the season (Like the year we scored a new prelit Christmas tree for $50) but some things we get during the season. But we already have the money for it.

    We also try and plan activities into the season such as seeing light displays or watching traditional Christmas movies. We don’t spend a lot but we do have fun.

  2. Pam Riley

    We draw names and each person gives (and receives) one gift. Then they label the gift with their name only; the giver. Somehow this has changed the emphasis from getting to giving. The giver works hard, sometimes with clandestine consultations with other family members, to find a special gift for the person whose name they drew. The $ limit has increased ver the years to $25. Anyone with income(paper route, etc) pays their own, and younger children do chores to earn their gift $. During gift unwrapping time, the youngest child picks up each gift and brings it to the person it is from. Then they present it to their person. Since the children know that there is only one gift and someone has worked hard and thought about them, they realize that it is their choice to be happy with their gift. The emphasis is totally on the giving.
    The other gift we each give is to the group. One might bring a treat to share, another a song to perform, another a few Christmas CDs from the library for background music, another a game for the group to play or a movie for the group to watch.
    These two new traditions, coupled with the old traditions of the Christmas story and carols, have given us a special but economical celebration.

    • Allyson Reynolds

      Love how you are teaching your children the real value of a gift, both in meaning as well as actual dollar amounts. Thanks for the comment!

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