The Complete Guide to Christmas on a Budget for Moms

Christmas on a Budget

Christmas and the holiday season is full of so much joy but, it can also be full of so much financial stress. Without knowing how to save money at Christmas or how to have a fun Christmas on a budget, us moms can feel overwhelmed and stressed.

Last Christmas was a hard one for us. My husband had been out of work for 5 months, we had just had a new baby, and I was battling Postpartum Anxiety and Depression. We were on government assistance and barely had money to eat or pay our bills.

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But that didn’t mean we didn’t have an amazing holiday. We sat down at our family budget meeting and determined what our needs were for the holidays. As we talked about events and things that we had previously spent money on, we knew this year would be one where we would have to say “no” to some things, get creative about other things, and just replace some traditions with more frugal ones.

The #1 thing that allowed us to be able to not feel like the Grinch and enjoy the memories was the budget that we created and STUCK TO all season. This was a 100% cash budget that requires some creativity and, for me, to get smart about how I could bring in extra cash during the months leading up to it.

Once you look deeply at your budgets, you’ll be able to see where you can make some cuts in order to save for Christmas and beyond. Start with printing out last month’s bank and credit statements and use highlighters to color-code your spending (for example, make purple eating out and green kid’s stuff). This will give you a bigger picture where you can cut things out.

Instead of spending $10 a week on Starbucks, take that money you’d spend and put it in an envelope for holiday spending. If you were putting your Starbucks on your credit card… STOP. There is no point in finding ways to make extra money if you’re just going to use credit cards. You’re just taking that money from yourself right away. I know how hard the credit card mindset can be, and believe me, I constantly work on my money mindset, but you CAN make these changes if you’re serious!

Why you need a budget for the holidays?

It is so easy to overspend during the holidays. You have gifts to buy, events to attend, and parties to host, and soon your debit or credit cards can become your best friend. Come January, you’ll check out your bank statement and realized you’ve spent over $1,000 on things that you don’t even remember buying.

You need to go into the holidays with a budget in mind so that you are not full of regrets later on. If it’s within your means to spend a little more extravagantly, then go for it! But, if you need to be smart and frugal about where your money goes, that’s okay too!

The key here is that you develop your budget in advance, determine how much you want to spend that you can cash flow and stick to it! It is incredibly easy to not fully plan out your spending and then double your budget that last week before Christmas because you are just impulse and last-minute shopping!

Using a Cash Budget Envelope System

It is SO easy to overspend when you don’t have a budget OR you choose to use cards instead of cash. By creating a budget and using a cash system for all of your holiday spendings, you can prevent overspending, stay on all of your predetermined budgets, and feel a ton less stress.

We use a cash system for all of our budgets and financial organization. We used to use credit and debit cards ALL the time but the problem was that we really had no clue what we were actually spending. Our bank statements were often a transaction or two off, we would forget to write down the little purchases and we went too quickly into our wallets to pay with a credit card if we thought we ‘needed’ something.

If you and your family commit to a cash Christmas, you have to make sure you’re all willing to stick to it. This also might mean that the way you previously have spent will need to get altered. If you can’t afford to cash flow the $500 fancy watch for your husband then maybe this year, you come up with an alternative gift (that I’m sure he’ll love just as much) at half the cost.

Really think about what your holiday needs and wants are and don’t feel like you have to spend a ton ‘just because’ it’s the holidays. When it comes to gifts for the kids, we follow a 4 gift system and make sure our gifts are thoughtful and practical without going overboard. There is no need to overspend on toys that are most likely not going to get opened anyway (or forgotten about in a week or two).

Create a Christmas Budget Worksheet

The first step you need in creating a budget for Christmas that fits you and your family’s needs is to create a simple chart to track all of your estimated spending and actual spending. I use Trello to do this and it’s a lifesaver!

On Trello you can create lists of who and what you are spending this season, save links for deals and items you need to buy, and track what you’ve actually spent. This will help you start to save and stay on track when it comes to spending.

Using a Trello board makes it super easy because you can link all of your holiday stuff in one place. If you see a link on Etsy for a gift you love, come across a coupon code for something you need, or want to look at your budgets and shopping lists when you’re out at the store, you can just check it out on your mobile phone and BAM, it’s all in one place! You can learn more about Trello and how it makes my mom’s life easier over in my Trello course!

Simple Budget Categories

When thinking about what areas you want to budget for, the best thing to do is braindump all of the areas you know that you’ve spent money in the past. Do you have to buy gifts for each of your kids’ teachers? Does your job have a holiday party that you need to pay for a sitter and an Uber? Do you host Christmas dinner?

Start by writing down all of the areas you know that you need to save for. This will allow you to start figuring out how much is in your means to spend (because remember, the goal is a CASH Christmas!) and where you can start looking for deals!

By having it organized, you’ll also just get a better bird’s eye view of all that is coming up and something that maybe you should say no too. Now that you know what’s coming in advance you can search Groupon for deals on memories and events or start to look for sales for gifts you might need.

How to use the Envelope System

After you determine how much you plan to spend in each area, it’s time to start saving putting cash aside. I suggest creating an envelope for each area so that you can separate the cash.

You can follow my 12-week system to start saving cash each week and putting it in your envelopes. You can also start finding other ways to get cash (like selling things on Facebook Marketplace or using Apps and, as it comes in, put it in envelopes instead of your wallet! This way that money won’t get mindlessly spent on Starbucks but intentionally spent on what you need.

The key to the cash system is making sure that all of the envelopes are labeled and you don’t borrow from another one! If you go overboard on buying baking items for cookies, you can’t take from the ‘holiday events’ envelope! This just means you’ll have to be strategic, find some coupons, or say no to something.

If you want some extra help getting your budget together for the holidays, and beyond than make sure you sign up for the Kick Your Debt to the Curb Challenge! In 5 days, I’ll show you how you can save up to $500 (yes in just 5 days!) and start to get your finances under control!