4 Tips for Cutting Back This Christmas

by Jamie Simmerman · 11 comments

Children with Christmas presents

One of the biggest changes our family has made over the years is cutting back on Christmas spending. When we first had kids, we felt it was necessary to fill the floor beneath the tree with gifts. It wasn’t unusual to spend between $200-500 on each kid for Christmas. A week after Christmas, most of those gifts, except for a select few, were largely forgotten about. We were satisfied because the tree was overflowing, even if the usefulness of the gifts was less than ideal.

In recent years, our attitude about money, and about Christmas, has changed. We’ve become much more frugal and strive to fully appreciate the material things we own. All the “stuff” under the tree is no longer as important. We set a budget and stay within it, despite the temptations to buy more the closer we get to Christmas. Instead of filling the space under the tree with gifts, we strive to fill the holiday season with memories. If you want or have to cut back this Christmas, here are a few tips to help you get started.

4 Tips for Cutting Back this Christmas

1. Instead of exchanging gifts with every one of your extended family members, try hosting a family get-together instead.

If money is really tight, or if you prefer to share costs, you can host a covered dish dinner where each family brings a favorite dish to share. You can make family crafts as keepsakes. (Christmas ornaments with the date, a framed family photo, or a family scrapbook including family genealogy are some ideas.) If you want to include a small gift, a package of Christmas cookies or candies for each family to take home would be great.

2. If your extended family includes many children, try setting up a Secret Santa-type shop at your family get-together.

Let the kids each pick out a small toy or treat to gift-wrap and give to another child in the family. This saves from buying a larger gift for each child and encourages the spirit of sharing and giving. The kids will likely have more fun choosing and wrapping a gift for someone else than they would getting a larger toy that they may not like.

3. When it comes to gift-giving for your spouse or significant other, try working out a plan to spend smarter.

Put money back into a savings account for a large purchase after the holidays (when items are cheaper), or buy something useful for you both to share, like a trip, sporting equipment, a gym membership, or a gas card for those nights when you just need to get away from home.

4. Think hard about alternatives for kids.

Buying for your own children can be hard. It’s tempting to buy them everything their hearts desire, but cutting back is about smart gift giving. Many families have opted to go with one large gift and one smaller gift, and they let the children pick out the items. You can buy one gift from a list, and one gift as a surprise. Or some families suggest you buy one gift they need, one gift they want, one gift they read, and one gift they wear. Even this four-gift approach is much more scaled-down than what many American families are used to.

You can be as creative with your Christmas spending as you like, but the idea is to spend less and make memories instead of collecting gifts.

What Christmas traditions do you participate in that would help others cut back this Christmas?

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  • Frugal Expat says:

    These are great ideas. Thanks for sharing.. Back home, Christmas will really drain your funds.. Glad you share these tips.

  • JM @ NJFCU says:

    This was beautiful to read, and the comments add more smiles. 🙂 Christmas really should be about family and quality time together and material gifts are just an added bonus. I should try your #2 idea though, Jamie – letting the kids participate and make them feel proud of themselves when they give gifts to their cousins.

  • Andrea Karim says:

    The Secret Santa-style gift exchange is what we always used when visiting extended family for the holidays. It was a smart way to make gift-giving equitable.

  • David @ Bankruptcy Canada says:

    Yes! We all need to cut back on spending this Christmas. It’s a practical move. be practical in buying gifts. Presents really need not be expensive for as long as the recipient likes the gift. You said it right. Be a smart gift-giver.

  • Barbara says:

    Experiences are what we exchange. Some of them are ones we give to our kids that allow them to take some of their friends with them as well – such as a horse and carriage ride for 6. Most of the kids these days have plenty of stuff and don’t need anymore. Experiences with friends and families will long remain in their memories. Swimming with the salmon was another experience gift we gave my nephew and his friend for a birthday. The fish were bigger than they were!

  • Kate says:

    Start out on Day One with your family that Christmas is not about GIMMEE. No matter what the television and internet incessantly yawp from Halloween until midnight on Christmas Eve, Christmas is about the Gift that God gave to the World — not the latest piece of electronic dreck that will be out of date before New Years Eve. My parents didn’t have a lot of money when we were growing up, and instead of setting up the Gimmee Gimmee Parade, they set up traditions, such as Midnight Church (from the time we were old enough to sit up — and yes, we also were taught to sit quietly and behave), Christmas stockings with sparklers (okay, they were illegal, but Mama knew where they were sold), and an orgy of cookie-baking and decorating, including a cookie house that was put out on Christmas Day for the birds to enjoy. I get my nephews and neices books, which I take great care in selecting — favourites in the last year have been “Monsters Eat Whiny Children” and “The Phantom Tollbooth.” My sisters and I always exchanged books, and the first question asked when one was unwrapped was “Did you read this?” and the answer was always Yes. The accent was always on the true meaning of Christmas. I think it is by far the better way.

  • M Meagher says:

    I’m really a terrible shopper so gift giving is hard at christmas. I also don’t have a lot of money. Now that my children are grown and my husband and I are empty-nesters, we value their time to help us around the house doing chores that we’d have to pay for if they didn’t help. We don’t need things, their gift of time is all we need. As for gifts for them? I give one son $150 to shop for everyone. He’s a frugal shopper and gets one gift for himself and one for his brother and sister, and if there’s money left over he gets something small for his dad and me.

  • Susan says:

    My husband and I put together a $25 stocking for each other to have Christmas morning. The rules are that everything has to fit in the stocking and the entire contents can be no more than $25. We then spend the day after Christmas together. We go for breakfast, shop for each other, or the house, have a nice lunch (big lunches are less expensive than big dinners!), and I get all of my Christmas serving dishes for the next year. Everything is 25, 50, and sometimes up to 75% off the day after Christmas. I do lots of baking during the holidays, and people have come to appreciate their “goodie boxes” moreso than storebought gifts. I can also shop for ingredients for baking when there are sales and when I have coupons.

  • Mary Reed says:

    We give each other experiences – when our daughter was small she got a certificate with one surprise adventure day each month. She always has said that was her favorite Christmas gift each year. Now she loves to give us surprise adventure days for gifts! On a Christmas vacation one year, we each gave everyone a surprise adventure day while on the trip and everyone had to plan the outing on their own. Our daughter had a budget, but she planned the whole day and it was wonderful! And she and her big sister, who is eighteen years older, planned our Christmas outing, too.

    • MoneyNing says:

      This is a great idea! I am loving experiences over stuff more and more because enjoying an experience together also means spending time with one another.

      Stuff usually just gives short term benefits but experiences can create memories that lasts a life time.

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