How to Set a Christmas Budget

Believe it or not, Christmas is approaching and it is doing so fairly quickly. As of today, there are only 76 days until Christmas, and this means that you need to start considering setting a Christmas budget.

I’ve had some referral traffic to this website with the question “how to set a Christmas budget”, which is comical because I don’t have such a post yet. Until now. Budgeting can be difficult to wrap your head around on it’s own. Setting a Christmas budget can sound daunting, but it’s not as hard as it seems.

how to set a christmas budget

Photo via Flickr – Shedboy

You know that it’s important to set a Christmas budget, that much is evident by you being here. Here are a few considerations with respect to setting your budget:

Who is Hosting?

If you are hosting Christmas this year, your Christmas budget will be much higher than the years that you aren’t hosting. You need to budget for:

  • Decorations (if you don’t already have them)
  • Higher utility bills (if you have out of town guests)
  • Food, wine, and dessert

It’s true that hosts tend to spend more than guests, however, you will only see a significant increase if you have out-of-town guests. You can save money on hosting in-town guests by asking them to bring a bottle of wine, a dish, or by otherwise collaborating.

How Many People Do You Have to Buy For?

The way I set my gift giving budget is by looking at how many people I have to buy for, and dividing the maximum that I want to spend between them.

Note that you do not need to buy gifts for acquaintances. A card will do just fine for them, leaving you with enough money in your budget to either save, or spend more on the people you do have to buy for.

Example: I have to buy for my fiance, my mom and stepdad, my aunt, my brother, and my best friend. My best friend and I tend to cap the gifts we give each other at around $20. I have a $500 gift budget (that is what was left over after an allocation analysis of the three paycheque month of November). I therefore have $480 to spend on the family members.

Do You Have Office Parties?

Often, workplaces will have office parties during the holidays, which will require some expenditure. Some may have secret Santa, others may have a potluck, or a party that you must buy tickets for. Many have a combination of the three.

I budget about $100 for Christmas at the workplace, because I also buy cards and do some baking for my colleagues around Christmas. $100 more than does the job.


When you set a Christmas budget, don’t fall into this trap: many people end up budgeting only for gifts, but the holidays can be expensive in other ways as well. It’s not unusual for there to be an influx in invitations to parties, get togethers, and gift swaps. My alcohol and dining budget tends to go up considerably throughout the month of December, as I find myself bringing bottles of wine to friend’s houses, making gingerbread houses, and attending dinners for various charities (unless you have an alternate way of giving on a budget) and other events.

Remember: you don’t have to go to every single party you are invited to. Pick and choose based on what is left over with all of the other expenses in mind.


Christmas can be an expensive holiday, so the best way to ensure that you aren’t over spending is by following a budget. Be sure to set a Christmas budget soon!

18 thoughts on “How to Set a Christmas Budget

  1. Canadianbudgetbinder says:

    We draw names now so we only have to spend $200 for adult gifts and $20 per kid which is no biggie. We save money every month in our projected expenses account so the money is ready to go when it is needed throughout the year.

  2. Last year we did something completely different for Christmas; instead of buying gifts for relatives, we donated the same amount to a local toy drive. It was much more rewarding and in the end we shaved a bit off the total price tag (and we didn’t have to wrap the gifts!) This year we’re going to do something similar. I can’t say we set a budget for this, but every year we spend about the same amount.

  3. Wow, I can’t believe we are already preparing for Christmas and the holiday season! I love this time of year but it can be SO expensive too. Thanks for the early reminder to make a christmas budget. I like to shop with online black friday deals 🙂

  4. Holy cow – 76 days til Christmas?! That seems impossible! I’m glad I’m already in the habit of planning ahead, but I did think I had more time than that!

    This is a really smart post; it got my thinking about all that I need to do and get ready for.. because planning really does help save money, too! I love the idea you had for doing some baking for coworkers. That’s a great way to handle gifts for those sorts of relationships (giving some cookies or other homemade treats would work for neighbors or closer acquaintances, too, if you felt you had to get those folks a gift).

  5. We save money throughout the year for a Christmas gift fund. Usually around early November we will set a budget looking at who we need to buy for and decide how much is budgeted for that person. We use prior years as a guideline, making adjustments as necessary and overall making sure that we stay within the overall budget.

  6. Bella says:

    Thanks for the tips Daisy. After reading about everything I need to pay for, I feel like I should have started budgeting and saving for Christmas weeks ago. I think I’ll be asking to my family abut bringing a dish as well as a bottle of wine given my current finances and I had completely forgotten to consider the money I would need for work place parties! Eeek!

    • daisy says:

      Thanks for stopping by. I know! It’s a lot of expense around the holidays. I forgot to factor in workplace parties in my budgeting too, but then last year I realized how much they were eating up.

Leave a Reply

Your email address will not be published. Required fields are marked *