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Christmas Budgeting

budgeting christmas christmas budget christmas shopping shopping Nov 27, 2021
santa holding a bag of cash

7 minute read

By Bethany Rees

If you haven’t started already, it’s time to shop for those Christmas presents. 

Since it is the shopping season, I thought I would share with you how we do our Christmas budget in our house. Everybody has their own way of doing things, but it’s nice to share ideas too.  So remember that the ideas below are not necessarily the right way by any’s just our way. And I’ve adapted “our way” a ton since the beginning of our marriage when we were trying to figure out money and family obligations (like, do I need to buy a gift for that second cousin I never see?). But for the past 16 years, we’ve been settled on how we do Christmas budgeting, and it works for us. It also somewhat has parallels to some scenes in one of our favorite Christmas movies, Christmas Vacation.  I just thought I’d share. 

But first you need to know a little bit about my paradigm for gift giving: 

Gift giving is my lowest love language so it means that I don’t naturally show love through gifts (take a free test here to see what your love language is). My love language is affirmation so I’d rather show you love by talking you to death with compliments than buying you a gift. Because of this, I’ve always struggled to know what to get people. And while I may resemble Aunt Bethany, I have not wrapped up a cat or a jello mold as a gift...yet.

Sidebar: If gift giving is your love language, you are the most thoughtful person in the room at Christmas because you thought deeply about your loved one in order to find the perfect gift...I salute you!

I should also let you know that I’m cheap. Jason is frugal, but I’m cheap...there is a difference. Ask any of my brothers; not only does it tend to be a present they would not want, but it isn’t a quality product either. I’m not cheap in a jerk kind of way, it’s just really hard for me to know what nice things are. I mean, all of my clothes come from Wal-Mart and Ross (best discount clothing store ever!). I wouldn’t know a name brand if it hit me in the face. 


OK, back to how we do Christmas shopping: 

How do I pay for the gifts? 

Jason and I never want to write a check we can't cash.

So we have not had a credit card in about a decade; we pay cash for everything. Jason and I have been doing the “Financial Peace” thing since 2006ish, and we work hard to live beneath our means. So every paycheck we put a set amount of money into our digital Christmas envelope so it builds year round. Every November, I pull out the money so I can pay cash for all Christmas gifts.  With Covid I moved to more online shopping so I actually deposited the money in our checking account to still pay “cash” online. 

Sidebar: Listen to this amazing song by Dee-1 about paying off student loans.


How do I budget?

I create a cap of spending for every person. Nerd alert here! I have a spreadsheet with all the names of people I buy gifts for plus those “extra” purchases like new ornaments, wrapping paper, etc. In my spreadsheet it also accounts for the total tax I should pay based on my budgeted total number. Pre-calculating tax before I spend a dime keeps me from over spending my total budget. For example, if my Christmas budget was $100, then tax would be $8 of that; so my “real” budget is $92. I then assign a cap to every person until my total equals my overall budget (e.g. $92). 

I print out my budget list so it also acts as my shopping list. As I buy things, I write down the item and their price by the person’s name. Every once in a while, I go back to my digital spreadsheet and type in the numbers so my spreadsheet formula will recalculate my balance. (I used to not be a nerd with finances...but it’s just another example of how I’m becoming more like my husband). 


Who do I buy for? 

I’m too old to allow guilt to cause me to overspend. I spend money on my closest family and friends only. Anyone else will get those words of affirmation I told you about earlier. I spend the most money on our two kids and a student in the community (our church does a Christmas Give where you adopt a student in the area). I spend the next most on my parents because I want to get them something nice...or as Cousin Eddie would say...

In Jason’s family we don’t buy gifts for each other because we spend our money on a destination trip instead (this comes out of our vacation envelope). Back to my family, for adult siblings we do the “Dirty Santa” game every year where I buy a gift to represent me and Jason in the game. For kids, I buy gifts until you are out of high school/college or married (it depends on which comes first). We also buy gifts for our grandparents. 

When it comes to co-workers, I make something homemade and package it up. These are probably my favorite because it took the most time and it was definitely made with love! For teachers, when the kids were little I usually bought a $5 Sonic or Starbucks gift card. As they have gotten older, I give the kids a total budget for teachers and make them shop. So now teachers’ gifts vary. 


How do I roll with the punches? 

Prices for what you want to get a person don’t always align with their cap budget, so you have to roll with the punches and allow for flexibility. So when buying I do look for deals which means I may under-spend a few dollars on some people, but then over spend a few dollars on others. Remember that I log the actual price of each gift. This buffer helps me roll with the punches (e.g. I budgeted $20 for a nephew but the cool Nerf gun was $25...that’s OK because I saved $10 on my dad’s hunting my nephew’s cap can go up $5). 


What do we buy for our kids? 

This has morphed over the years. When our kids were under 5, we would budget one number but only spend a fraction of it...we put the remaining money in their savings account. For example, babies don’t really need anything and toddlers love the boxes more than the actual presents. So when our kids were babies, they got: a few clothes they needed, 1-2 toys, and their stocking items. About ⅔ of their budgeted money was put into their savings account. When they were toddlers we bought one big toy, maybe three small toys, and their stocking items. About ⅓ of their budgeted money went to their savings. 

I can’t remember when we started our latest “thing” with their presents, but we’ve been doing it for at least 5 or 6 years now. We are minimalist and don’t want a bunch of “stuff.” We’d rather spend our money on experiences with our kids. For this reason we put in boundaries that keep them from asking and us from buying too much stuff that they’ll never play with or use. So our kids get four gifts and a stocking (usually with candy). We follow a rhyme that gives us all boundaries for the four gifts: 

Something you want, something you need, something to wear, something to read

The want is always the biggest expense..especially when they started wanting electronics. 

We try to get creative with all the categories. For example, you wear sunglasses, headphones, purses, fake nails, etc. The reading one can be fun too: cookbooks, science experiments, art how to’s, how to blow stuff up, etc. Last year our entire family needed a basketball goal so it was a combined gift. 

Sidebar: What about really expensive electronics like PlayStation and cell phones you ask...we buy those around big birthdays (10, 13, 16, etc) and they are always refurbished so we get a better deal. If our kids want anything big like that after their birthday we strike the “pay half deal,” as in they have to work to save half and we’ll throw in the other half. Our kids are now really good at working, budgeting, and being frugal (yes frugal...they aren’t cheap like their mamma). 

Well, that’s our Christmas shopping habits in a nutshell. It ain’t perfect but it fits with who we are as a family.  I hope you enjoy your time finding that perfect gift but always remember the real reason for the season: the gift of Jesus Christ as our savior. 

Know Better. Do Better. Live Better. Budget for Christmas.

Rocks before Sand!



“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.”

~Luke 14:28-30

Theme Song: 

National Lampoons Christmas Vacation Soundtrack - Main Title

Reference Used:

  • Chapman, Gary D. The Five Love Languages. Chicago: Northfield Pub, 2010. 
  • National Lampoon’s Christmas Vacation. Directed by Jeremiah S. Chechik, Hughes Entertainment, 1989.
  • Ramsey, Dave, and Sharon Ramsey. Financial Peace Revisited. New York: Viking, 2003.
  • Holy Bible, New International Version®, NIV® Copyright ©1973, 1978, 1984, 2011 by Biblica, Inc.® Used by permission. All rights reserved worldwide.

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