7 Ways to Give Christmas Gifts on a Budget

The holidays are a very special time of year. But they can also be very expensive as many people feel the pressure to buy more than they should. According to the NRF (National Retail Federation), Americans spend around $998 on gifts, food, and other related items. Considering the median pre-tax weekly salary in the U.S. is $1,001, this means that it could be a struggle for many households.

Thankfully, the spirit of Christmas isn’t about who spends the most. You can make it just as thoughtful while also being mindful of your finances. To help you accomplish this, here are seven ways to give Christmas gifts on a budget.

1. Set Money Aside All Year Long

Saving up for Christmas isn’t something that should start in October or November. It can actually begin as soon as December 26th. Though that may seem way too far in advance, the logic is this: the more time you give yourself to build up your gift fund, the less you’ll have to put away each month.

Here’s an example. Suppose you need $1,000 for Christmas. You could try to squeeze an extra $500 out of your budget in October and November, but this might be tight if you’re already living paycheck to paycheck. Instead, try setting aside $20 per month all year ($20 x 50 weeks = $1,000).

An easy way to do this is to set up a separate bank account and then have money from your primary account transferred into it automatically. Keeping your Christmas fund in a totally unique account will help to keep it apart from the rest of your general savings or checking account, so you’ll be less tempted to dip into it. Some banks even offer special “Christmas clubs” for this very purpose.

Additionally, with interest rates on the rise, you may even be able to make a little extra money. A high-interest online savings account or CD (certificate of deposit) paying around 3 percent could yield an extra $30 for every $1,000 saved. That’s like getting one free gift! 

2. Shop Strategically

One of the worst ways to buy gifts for everyone on your list is to randomly go to several stores and pick out things you “think” they’ll like. Usually, you’ll end up spending more than you should per person, overpaying for the items, and probably not actually getting anything they actually want.

A better strategy would be to make a list. Start by writing down the name of every person you wish to buy gifts for. Put a dollar amount next to each name and add them up to make sure your purchases will be well within your overall budget. If you don’t already have a budget, try using a helpful app like Buxfer to monitor your finances and determine how much you can allocate to gift-giving.

Something else that will help with your list is to write down one to two thoughtful ideas for each person. Yes, it will take more work to use this approach. But you’ll be far more specific with your purchases, and it will give you time to shop around for better prices or deals.

3. Get More Bang for Your Buck with Used

Although the stores are full of the latest and greatest items, there’s no unwritten rule that says gifts must always be brand new. In fact, if the person you’re buying for is comfortable with gently used items, then you may actually be able to get a higher-end model or better product.

Video games are a perfect example. Gamers have known for years that you can get items on eBay or other resale platforms for 25 to 50 percent off the sticker price. Oftentimes, these items are still in Excellent or Very Good condition, so there’s really no sacrifice in quality.

If you plan to buy something that’s expensive, it’s worth having a discussion if buying used is okay. If it is, then use this to your advantage to get the best gift your budget will allow.

4. Use Your Credit Card Rewards

Do you earn rewards points when you make purchases with your credit card? If so, then you might potentially be sitting on top of hundreds or even thousands of idle dollars that you could be putting toward presents.

What’s great about this strategy is that if you normally buy gift cards for people, then your credit card rewards are the perfect place to get them. Most credit card rewards programs have special affiliations with all of the major retailers. That means you might be able to get a $50 gift card for $40 of points.

Not only are you getting a good discount, but remember – these are just credit card points. They’re not actually taking any money out of your pocket.

5. Keep Your List Selective

It would be great to buy presents for everyone you know – family, friends, coworkers, etc. But it wouldn’t take long before your budget spirals out of control.

Instead, why not keep your list short and limited to just the people who mean the most to you? That way you won’t spend a lot of extra money and can focus on getting more intentional gifts for the ones you’ve chosen.

6. Skip the Adults

As adults, let’s be honest – most of us work and can financially support ourselves. While a nice present is always appreciated, it’s not really necessary.

For that reason, if you’d like to save some money, discuss skipping the exchanging of gifts among the adults. This will free up everyone to focus on buying things for the children and making Christmas special for them.

As an alternate suggestion, you could also have a Secret Santa instead of a gift exchange for the adults. That way everyone still gets the fun of opening one present without having to overdo it.

7. Give Your Time

Whoever said a gift needs to come from a store? Your time and talents can be just as valuable or more. 

For instance, maybe you know how to bake or fix things around the house. With your talents, you could make something or schedule some time to do a project together. While there might not be a box to open the tree, this present could be more meaningful and customized to them. Especially when it comes to fixing things around the house, you’d save that person hundreds of dollars by skipping the hiring of a professional.

Featured image credit: Pexels

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