Easy Step By Step Christmas Budget Guide – Get It Sorted


& FILED IN Christmas Planning 

*this post may contain affiliate links. They don't cost you a penny, but pay a commission to this site - Learn More

Having enough money at Christmas doesn’t have to be stressful. This step by step guide to create a Christmas budget will do all the hard work for you so you can enjoy the festivities instead of worrying about your budgeting.

How to create a Christmas budget you can actually afford

Free Christmas Tips eBook to Download

Every year in January I hear people stressed about having to start paying off Christmas and how hard it’s going to be.

It’s an expensive time for sure (the Bank of England states that we spend on average 29% more in December). But I want to give some tough love right here and now, and say that Christmas happens at the same time every year.

It shouldn’t be a surprise that it’s happening, and it should be something we can plan for – and budget for – ahead of time.

Yes – of course money may be tight for a lot of us – however – WHATEVER OUR BUDGET IS – we can make a good Christmas from what we have, if we budget properly.

Let’s try and get ahead of the game a little more, and turn the tables on having to pay for Christmas after the event.

Why not create a budget that helps to pay for things up front instead – so we can start each New Year with a clean slate.

Sounds good, right? Here are the steps to take to do just that…

How To Create A Christmas Budget

This is arguably the most crucial part of Christmas Planning – because there’s no point in making wish lists, and organising social events if you either won’t be able to afford them, or have to go into debt for them.

A Christmas fund is what’s needed, and these steps will get you there, so, let’s get started…

Piles of gold coins with fir cones on a black background

STEP 1 – Create a list of what you need to buy

Starting at the beginning, it makes sense to work out what you need to spend on Christmas. This is your starting point to creating a budget that will really work for you.

Brainstorm EVERYTHING that you will need to have in the run up to Christmas.

This is the most important number to know – you need to be shown the reality of what you are planning – and start from there.

The list can include things like: –

  • Presents (Loved ones, Office Secret Santa, etc…)
  • Cards
  • Postage
  • Wrapping
  • Christmas Food (Christmas dinner being the big one, of course!)
  • Entertaining (Gatherings, New Years Eve Parties etc…)
  • Clothes
  • Decorations (Christmas lights, Christmas Tree, etc…)
  • Travel
  • Charity Donations
  • General holiday spending

etc….. be ultra specific and don’t leave anything out (hidden Christmas expenses are a killer).

Also – write down what you want to spend on each thing – and be realistic!

Want a budget list that’s done for you (all you do is fill in the numbers) – check out the Christmas Planner – it has the perfect Christmas Budget page ready to help you keep on track.

Step Two – Check What You Already Have

If you’ve got things in the house already that can be used for any of the list you’ve created, then this amount can be taken out of the budget at this stage, because it’s already there.

For example –  Perhaps you have wrapping paper from last year that you therefore don’t have to buy etc… – take this off what you actually need to spend this.

Or you may have bought all your decorations last year and don’t need anymore – or you may have some presents in your gift drawer that could be the perfect gift for someone – and therefore can be taken off the present budget.

Lastly – maybe you can take advantage of shop loyalty points saved throughout the year, or saved gift card vouchers etc…

Really have a think about what you have, and be as specific as possible. I always find it amazing how many presents I’ve already bought that will be perfect for people over the year!

Step Three – What Money Do You Have Right Now?

Work out what you actually have right now in your savings/account to spend on the holiday season.

Have you been saving a little each month over the past year? (The ideal way, and I would definitely recommend this going forward – starting in January!), do you plan on using a chunk of your income just before Christmas? Are you working extra hours etc…?

Be realistic as to what money you will have to spend.

Ideally you want to spend what you have rather than go to credit cards (otherwise you will end up paying off Christmas after the event each year and will never be able to catch up).

TIP – If you find saving for Christmas difficult, then why not set up a separate bank account for future years, and get used to putting a little away each month. This can be a life saver as it’s so much easier to save a little every month instead of one large amount at the end of the year (or worse, having to find money each month to pay off a credit card bill for last year…)

Step Four – Work Out Whether Everything Is Really Important Or Not

So – you know what you need to spend money on, and what you actually HAVE to spend.

Now it’s time to sanity check a little.

You may have written lots of things you want down – but now it’s worth asking yourself if it’s vital to your Christmas to have these things or not.

Mark each item as IMPORTANT, NICE TO HAVE, or CAN LIVE WITHOUT – and also see whether the amount you want to spend on each can be reduced at all.

REMEMBER – Don’t be drawn in by all the ads and hype around Christmas. Most peoples memories of great Christmases aren’t about the stuff and the expense, but they’re about memories and traditions. Kids don’t really need a lot to be overjoyed on Christmas morning etc…

Now update your budget according to your priorities – and see what figure you come up with now….

Step Five – Work Out Whether You Can Afford The Christmas You Want Right Now

To do this, you just need to use your overall budget figure (what you worked out in Step FOUR) and take away the amounts from Steps 2 and 3.

If this number is positive, then you already have enough to be able to pay for your Christmas without reaching your spending limit – WELL DONE! – you can simply go ahead and spend as you need to. Go to STEP 7…


If it’s a negative number, then there’s some work still to be done (because you know you have prioritised and made the budget as low as possible in step four – so you need to work out ways to minimize it still further)

Go to Step 6…

Step Six – Tweak Your Budget

If you don’t have enough money to pay for the Christmas you want to budget for, then some tweaks (big or small) need to be made.

First off, what is the negative number from STEP 5? – this is the amount you need to find – and there are 2 ways of doing this: –


  • Maybe you can do some overtime
  • Maybe you can take on more clients if you work for yourself
  • Maybe you can sell some of the stuff you no longer need (clothes, DVDs etc…)
  • Go for a no spend month – a month where you only spend on essentials – it’s amazing how much you can save just by doing this and it’s only for a short time. (For example – stop takeouts, that daily coffee shop visit, eat from the freezer and pantry, have nights in rather than evenings out etc…).


  • Decide what is absolutely crucial, and what can be taken away. In step 5 you did some prioritizing – can you go still further?
  • Make presents, spend a little less on everyone, Don’t send cards, borrow an outfit for a party from a friend instead of buying a new one etc…

Related: Christmas Money Saving Tips To Make Your Budget Stretch Further

Sit down and really brainstorm what you can do from these ideas that will work for you and your life – and the time you have available.

Whatever works for you is the right way – and you could always do a bit of both if you prefer!

Step Seven – Stick To Your Budget

Whether your budget worked straight away for what you have saved, or whether you needed to tweak it, you should now be at the stage where you have a budget that works for you and your finances.

The numbers should match between what you have saved, and what you need/want to spend.


But don’t stop there…

The most crucial part of making your budget work is to STICK TO THE BUDGET as much as you possibly can.

Please don’t be tempted to overspend – your future self will thank you for staying within the boundaries you’ve set!

TIP – If you do find that you have budgeted totally wrong for one area of the budget, then find the extra money from another area of it. Overall you should be spending the right total.

Christmas Quote

How To Make Sure Your Budget Gets Better Each Year


You won’t have any nasty bills come in, you can see where you may have to juggle things around a little, and you can start to prepare accordingly.

Remember, Christmas really IS only a few days in an entire year. We all put so much pressure on ourselves to do everything amazingly, to buy the best presents, to decorate like a magazine, and to host amazing parties – but really it all comes down to spending time with those you want to, and enjoying it.

Everything else is just dressing!

Balance what you can, don’t go overboard, and you will find that when January rolls around you can smile safe in the knowledge that you won’t have any credit card bills to pay off.

The biggest tip I have for you going forward, for years to come – is to keep track of your ACTUAL spending from previous years.

This will help you be realistic for next year as well (and help you know exactly what you should ideally be saving each month from January in order to pay for it easily! – just divide the total by 12).

How to create a Christmas budget you can actually afford

So there you have it. How to create a Christmas Budget that can take the stress away this year (and for years to come).

It’s the one thing that most of us dislike doing, but it’s what makes the most difference to how much we can enjoy the festivities once they come around.

Yes, creating that budget really does make things easier, and less stressful if you can work your spending around what you actually can afford rather than worrying about debt come January… Who wants to be paying off a credit card for months after the event?

And if you want to make the most of your money this Christmas, why not take a look at the Christmas Money Saving Tips next.


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

This article was written by Chrissy

Hi - I'm Chrissy... Having run my own business for 12 years as a Professional Organiser and Interior Designer, I know what works (and what doesn't!) when it comes to setting up a home that works both functionally and aesthetically. Now you can mostly find me in a coffee shop or at home, working full time on (which I setup back in 2011) sharing all my tips and ideas. My mission is to help you create a home that you love to live in every day...


7 Main Causes Of Christmas Stress – And What To Do About It
How to Make Your Home Smell Like Christmas – 10 Ways!
22 Heart Warming Christmas Quotes To Give That Festive Mood
43 Inspirational Christmas Quotes For Family & Loved Ones

Are You Wasting Time Or Energy On The Wrong Things?

Don't Miss A Thing!

Get motivation, tips and exclusive offers straight to your inbox when you subscribe below and become a VIP today. I can't wait to welcome you!

Thanks as always for the website and emails, rather like a weekly Home Life Coach to motivate me.

Jenny R

You probably hear this a lot, but we all feel the same gratitude for your uncanny ability to say the right thing at the right time. Thank You!

Teresa W

This is the longest I've ever stayed subscribed to an email list. I think you have great ideas, and you are surely an encouragement to many.

Elize S