Christmas is my absolute favorite time of year, as giving gifts is one of my love languages. The one thing I try to avoid, however, is overspending. I create a budget, save throughout the year, and then shop early so I have time to find the best deals. If you aren’t sure how much to set aside for the Christmas season, you can start by taking a look at the average Christmas budget.
What is the Average Christmas Budget?
According to Investopedia, Americans spend approximately $998 on Christmas-related items. This figure is broken down into the following categories:
- $650: Christmas gifts for family, friends, and co-workers
- $230 on food and decorations
- $117 on non-gift items for self and family (think ugly Christmas sweaters and Advent calendars)
Of course, your overall budget is affected by how many people you have in your family, how many close friends are in your circle, and how many co-workers you feel obligated to buy for.
Here at Five Bags of Gold, we are big on setting a Christmas budget and then not going over it. Let’s take a look at each of the categories in the average Christmas budget list above and see if we can find ways to save.
Christmas Gifts for Family, Friends, and Co-Workers
When it comes to Christmas gifts for my family, I start with my kids. I have two girls (and now a son-in-law). I allow them to request one big item each. After that, the gifts I give are thoughtful, but budget-friendly.
I don’t buy my extended family anything expensive. I consider their interests, hobbies, and career fields when trying to find an affordable gift that shows I care. For example, one year I got each family member a Christmas ornament that could be personalized with their name. My dad loves music, so I got him a guitar ornament. My sister is a nurse, so I got her nurse ornament. You get the idea.
To get the best price on Christmas gifts, consider keeping your eye open all year. I am in a sales/deals group on Facebook that has really netted me some amazing gifts. I got my youngest one of those real life baby dolls for just $14.99 (typical cost ranges from $50 to $150). My sister loves to do diamond paintings and I was able to score one for her for just $2!
Don’t forget discount stores, both in-person and online. Last year I found the most adorable mugs from the movie “Elf” for $5 at T.J. Maxx. These made excellent gifts for my daughter’s teacher and bus driver. Mugs are great because you can fill them with candy or homemade treats. The Lakeside Collection is one of my favorite online shops for getting great deals. I ordered some pocket knives for my brother-in-laws for under $10.
When it comes to co-workers, I always encourage putting names into a hat and having each person in the office draw a name. Then you’re only spending money for one gift, instead of feeling obligated to buy a whole host of gifts. If you still feel the need to give something to everyone, bake some cookies or holiday breads and gift those.
Food and Decorations
The average Christmas budget of $230 for food and decorations seems high to me, and I have a big family (I only have two kids but I have six sisters who all have significant others and children). Unless you are just starting out with your first house, you most likely already have a box of decorations.
The only time I ever buy more Christmas decorations is immediately after Christmas when the decorations are 75% off. You’ll have to wait till the following year to use them, but the savings is worth it. If you follow this method, you shouldn’t need to spend more than $30.
When it comes to the food, consider having your Christmas dinner be a pot-luck event. Keep an eye on your grocery stores promotions, as ours always gives a free turkey if you’ve spent around $400 in groceries throughout the previous month. Since I spend $100 a week on groceries, I always qualify for the free turkey. Last year, I gave that turkey away because we prefer to have a big Christmas breakfast instead (which is also cheaper than a dinner).
You should be able to keep your food budget for Christmas under $100. Combine the $100 for food with the $30 for deocations and that’s $100 less than the average Christmas budget for this category.
Non-Gift Items for Self and Family
There aren’t too many non-gift items that you really need to buy for yourself and you family. You could count your Christmas tree as part of the decorations or as a non-gift item for your family. I personally have an artificial tree, so this doesn’t cost me a dime. When my daughter moved into my garage apartment while finishing up her degree, I found her an artificial tree at Goodwill for $30, so don’t forget to check your local thrift stores.
Other possible items that fall within this category include an ugly sweater if you have a party to attend and an advent calendar. You shouldn’t have any trouble finding these sweaters at a second-hand store for around $3 or $5. We’ve purchased our advent calendars from the local dollar store for $1, but you’ll find grocery and department stores sell them for $5-$10.
So, if you bought a tree for $30, a sweater for $5 and an advent calendar for $10, you’d have spent a total of $45, which is much less than the $117 average.
Determine how much you need for gifts, food, decorations and other holiday items. Begin setting aside money each month until you have that amound saved. Keep your eye out for deals all year long to enjoy big savings. By the time Christmas rolls around, you’ll be prepared and the stress that normally comes with the holiday will be non-existant.