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5 Tips for a Frugal Christmas - Balanced FI

5 Tips for a Frugal Christmas

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You can have a frugal Christmas if you carefully plan and shop around. Spending more doesn’t make you more loved, but spending wisely helps.

My husband and I both have divorced and remarried parents (our kids are lucky enough to have 7 grandparents). He has half-siblings, I have step-siblings. We have nieces and nephews on both sides of the family. Buying gifts for all of those people can really add up, so we have worked hard to find frugal Christmas gifts.

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1. Simplify your giving list

Pare down who you buy gifts for, but make sure to communicate with your families about the changes. Explain that this is coming from a place of financial security, not because you’ve become a miser or that you hate Christmas now. You can even share your financial goals if that’s comfortable, and maybe you’ll inspire someone else.

  • buy for immediate family only
  • buy for nieces/nephews/siblings/parents also
  • buy for nieces/nephews and draw names for other adults
  • draw names for one other family member
  • buy for nieces/nephews and purchase one white elephant gift for another adult (the “rules” vary, but usually it’s a gift that you buy for anyone in the group, that can be traded, and is often a joke or something odd)
  • share the cost of larger gifts for nieces/nephews with another aunt/uncle or grandparents

To easily draw names, I like DrawNames.com. You can even save your setup from year to year, so you’re not stuck purchasing for the same person two years in a row. It also lets you put restrictions on who people can draw (allowing me to do one draw with both my mom & stepmom, and not have to worry about that awkwardness), and it sends out reminder emails.

For my own kids, I love the idea of the 4 Gift Rule because it fits within my minimalist ideals, plus it’s a more frugal Christmas gift plan. Each child receives only 4 gifts: something they want, something they need, something to wear, and something to read.

2. Plan ahead & make a budget

For our immediate family, we buy 3-4 gifts for each child together, plus stocking-stuffers for all four of us. My husband usually breaks that “rule” and buys a few small things he thinks the girls will like too. In our marriage, we have been choosing our own gifts. Often we choose a more expensive item we wouldn’t buy ourselves (expensive meaning $200ish). This way we get exactly what we each want, and I don’t have to spend hours agonizing over which article of hunting clothing is really the best.

For our nieces and nephews, we budget $20 per child. We also usually consult with the child’s parents first too, so we are selecting a desired gift that won’t result in one of our kids receiving a retaliatory drum set next year. When we drew names for other adults, we had limits of $50 or $100, decided upon by the family.

Around November 1, I begin brainstorming ideas for my girls, nieces, and nephews. I should write it down, but it’s all in my head for now. This allows me to shop around and take advantage of sales since I already have an idea of what to purchase

3. Shop sales & look for cashback

Black Friday is now basically a two-week-long sale frenzy, so it’s pretty easy to find something you’d like to give on sale. You can sign up for emails from your favorite retailers and receive notifications of sales. Those emails can be distracting and hard to resist though, so I usually just check out a few favorite retailers and look for sales. Any small amount of googling will tell you what is on sale, either online or in-store, during this time.

I always check Rakuten for cashback and sales opportunities too. Once you sign up, just use the Rakuten website or browser extension to search for the store, brand, or specific item you’re looking for. You have to check out via Rakuten, but you can get up to 25% cashback (higher amounts are rare). You’re not paying extra; the retailers provide Rakuten with the cashback as an advertisement.

This year, I purchased Kiwi Co crates for a niece and 3 nephews. A sale was going on plus I got cashback from Rakuten, so I was able to give more than expected and stay within my budget.

4. Making something is the ultimate frugal Christmas gift

If you have a skill, use it! My husband and I can (or freeze) a lot of food from our garden. We also purchase fruit and can jellies and jams. Shelf-stable items like this are great, cheap gifts for local recipients.

You can also assemble some really cute dry-baked good mixes. Basically, you just put all the dry ingredients for a batch of cookies in a jar, slap on a ribbon & print out a recipe card. With a little effort, you can look creative and thoughtful.

If you can sew, knit, or crochet, consider making small items as gifts. My husband’s grandma knit little dish scrubber pads about 10 years ago for Christmas, and I still prefer those over any other scrubber I’ve used. She’s also given us afghans over the years, but those take a lot of time and yarn.

5. Give second-hand gifts

During normal times, we like to browse second-hand stores. We buy clothes for our kids there, if we can find them, but we’ve also purchased gifts. A couple of years ago, my nephew was obsessed with the solar system. We happened to find a huge book on the topic at Goodwill for $3, so we snagged that for his Christmas gift.

If you know someone who loves vintage clothing or expensive labels, thrift stores can be a great source. Also, check out sites like Poshmark and Thredup.

I have also re-gifted items I didn’t like or need. That sounds harsh, but I hate to waste perfectly good things. Obviously, you need to be careful who you re-gift to (i.e. not the original giver), but this can be done tastefully. Never give away dirty, worn out, or used items like candles or lotions.

Bonus tip: plan for next year’s frugal Christmas

While you’re buying gifts this year, save your receipts or track your spending somehow (which you should be doing anyway). Get an idea of how much you spent this year: does that really fit in your budget? Does it align with your goals?

Use this insight to plan for next year. Determine your Christmas budget for next year, then divide that amount by 12. That is how much you need to save each month to avoid going into debt buying gifts. If that amount isn’t reasonable, you probably need to cut your Christmas spending. Transfer that amount into a savings account each month and you’ll be able to breathe easily next holiday season.

Also, shop for next year’s decorations or gifts on December 26th. Everything will be on sale!

How do you save money while still being generous?

8 thoughts on “5 Tips for a Frugal Christmas”

  1. I love this. Most tips online about saving money around the holidays seem so cheap to me, but your tips are really focused on being affordable AND generous, so thank you!

  2. One thing I did this year was start shopping early so I spaced my expenses out which has been really helpful. I’m hoping to simplify our giving list next year. Thanks for sharing your tips!

  3. This is a fantastic list of frugal gifts. I agree that it’s important to plan Christmas on a budget, otherwise it can get very expensive.

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