The holidays should feel joyful, not stressful. But let’s be honest—between gifts, decorations, and festive meals, it’s easy to spend more than you should during Christmas. Money worries can suck the fun out of the most wonderful time of the year. That’s why setting a Christmas budget can be the best gift you give yourself. Ramsey Solutions is a trusted name for getting your finances in order. Their EveryDollar tool makes it simple to track spending and avoid post-holiday regret.
How to Make a Budget
Think of the holidays like the classic movie “Home Alone.” Remember how Kevin made a plan before the “Wet Bandits” showed up? Your budget is your plan—no swinging paint cans needed. Before you create a Christmas budget, you’ll need a solid monthly budget in place. EveryDollar keeps it easy, but here are three essential steps:
- List your monthly income.
- List your expenses.
- Subtract your expenses from your income to equal zero.
Let’s break down each step.
1. List your monthly income
What counts as income? Any money your household brings in every month. Your salary, your spouse’s paycheck, those few hours you picked up at the store for extra holiday cash—it all counts. Be as complete and accurate as you can. A realistic view of your income will stop any surprises later.
2. List your expenses
Now, jot down every expense you know will come up. Here’s a quick checklist:
- Giving (aim for 10% of your income)
- Savings (stick to your Baby Step)
- The Four Walls: food, utilities, shelter, transportation
- Other essentials: insurance, debt, childcare
- Extras: entertainment, eating out
Once these are listed, add a new category for Christmas. Break it into lines: gifts, decorations, travel, and, of course, all the ingredients for those dishes your family loves. If you’d rather use an app than scribble in a notebook, EveryDollar helps you sort it out quickly.
3. Subtract your expenses from your income to equal zero
The goal is to make a zero-based budget—every dollar has a purpose. When you subtract all your expenses from your income, you want to get exactly zero. This keeps random spending from sneaking into your month. If you get a negative number, cut back somewhere (groceries, maybe?) or find a way to bring in more money. If you have cash left, put it toward savings or debt.
Got an irregular income? No stress. Budget for your lowest expected amount, then adjust upward when you get paid more. EveryDollar’s premium paycheck planning can help here.
How to Set Up Your Christmas Budget in EveryDollar
According to the State of Personal Finance study by Ramsey Solutions, families plan to spend about $1,300 this holiday season. With prices up everywhere, that feels like a stretch for many. But you don’t have to spend a fortune—just spend what you can afford.
Ready to get started? Here’s how to use EveryDollar to make sure your Christmas spending stays in check. So, before we go any further, hear this: You don’t have to spend that much. You have nothing to prove to anyone with your decorations, gifts and fancy food spread. That’s not the point of the holidays. It just isn’t. Free yourself from feeling pressured to spend any particular amount and focus on what you’re able to afford—and on living the true joys of the season!
With the next few steps, you’ll learn how to set a spending limit you can afford, set up everything inside your free EveryDollar budget, and then stick to your plan. Ready? Let’s do this.
1. Plan how much you’ll spend this year
Decide how much you can put toward Christmas. Look at what’s left after the essentials in your monthly budget. Add up what you’ll need for gifts, food, travel, and fun. Stick to this number. No debt allowed—don’t let holiday spending follow you into spring.
2. Create a Christmas budget category in EveryDollar
Sign in to your EveryDollar account on your desktop computer. Scroll down and click “Add Group” to set up a Christmas category. Get creative—call it “Santa’s Stash,” “Festive Finances,” or just “Christmas Spending.”
3. Make budget lines for gifts, food, decor and all things holiday
List each person you’re buying for and what you’ll spend—kids, parents, friends, even your office Secret Santa. Add budget lines for holiday meals, travel, and any other seasonal extras. Use a printable Christmas Present Planner to get organized, then plug your numbers into EveryDollar.
At this point, every dollar you’ll spend is attached to someone’s name, just like categories in a normal budget. You can always start with our printable Christmas Present Planner. Just make sure you put everything in EveryDollar too!
- Gifts for Family: $250
- Friends and Teachers: $60
- Food for Parties: $75
- Decorations: $30
- Travel: $45
4. Track your spending as you go
Want to know how you don’t overspend? You track your expenses. Every. Single. One. That’s right: Keep up with all that spending as you go. Log in to your budget, and click on the Transactions icon. Next, click the blue plus sign. Then, record the expense! (Or check out that premium version of EveryDollar, which includes bank connectivity so your transactions stream into your budget. Automatically. You just drag and drop them to the right line!)
5. Move amounts around when needed
If you budgeted $25 on gifts for Aunt Jordan but hit a few sales and got everything you need for only $15, then take that extra $10 and put it to good use. You can buy Aunt Jordan another gift or add that amount to another budget line where you might need a little more wiggle room—like your 6-year-old’s Christmas list that seems to get longer and longer. By. The. Minute.
That’s the beauty of your Christmas budget—this thing’s not set in stone. You can change up the planned amounts after you put them in there. Just make sure you don’t overspend the total amount you planned for Christmas—or your budget as a whole!
Save Money Through the Year With a Christmas Fund
We’ve talked a lot about your Christmas budget, but now it’s time to talk about a Christmas fund (yep—they’re two different things). Think of a Christmas fund like a savings account you set up for all your Christmas needs. This is where you’ll stash the money you’re saving for Christmas and watch it grow as the season gets closer.
Short on time this year? No worries. Start a fund for next year and make holiday money stress a thing of the past. Review what you spent last Christmas, and set a goal. Did you go overboard on gifts? Did you travel more than expected? Adjust your goal as needed, then set up your fund.
How to Set Up a Christmas Fund
How Do You Get the Cash for Christmas?
Okay, you’ve got that budget set, and you know you need to find extra cash for Christmas this year. How can you make it happen? Ask yourself these four questions:
What Budget Lines Can You Tweak?
Don’t know where to start? Try buying generic at the grocery store, using coupon apps, meal planning, drinking homemade coffee, or carpooling to work. Don’t forget scaling back on things like restaurants, clothing, personal spending, gourmet hot cocoa and entertainment too.
How Can You Boost Your Income?
We mentioned it earlier, but if you need some more money to hit your Christmas budget goal, get out there and increase your income.
You could sell baked goods, take on extra hours at work, or even start a side hustle. Make some money quick by selling things online, try cashing out rewards from money-making apps.
What Christmas Traditions Can You Skip?
Psst, guess what? You don’t have to do elaborate pranks with your Elf on the Shelf this year. Or fancy Christmas card photo sessions. Or a Clark Griswold-style Christmas lights display. The kids will survive, we promise.
You can save money this year by cutting out traditions that you don’t truly have to do. Be open and honest about your budget as you try to figure out which traditions to cut and which to keep.
How Can You Cut Down on the Cost of Gifts?
Shop sales. Use coupons. Go for DIY homemade gifts instead of buying gifts at the store. Give out baked goods for gifts. Skip all the random gift exchanges. Instead of presents for every extended family member, just draw names and buy only one gift for the person you get.
Will Making a Christmas Budget Really Save Money?
Yes! You’ll find your Christmas shopping experience is much merrier and brighter when you can check everyone off while sticking to your budget, instead of spending first and worrying about the fallout later.
Having a budget is the quickest way to make your money goals a reality. Saving for Christmas? You should budget. Trying to get out of debt? You should budget. Saving for retirement? You should budget. Already a millionaire? Guess what—you should still budget.
Saving money for Christmas with your budget doesn’t have to be complicated. With our free budgeting tool, EveryDollar, you can create Christmas funds and track gift buying for everyone on your list.
Follow these steps to set up your budget so you can have a holly jolly, well-budgeted, debt-free Christmas and a happy new year.
