Our $400 Christmas Budget | How We're Spending Less on Christmas

This year, we’re not spending much on Christmas because we’re currently putting every extra dollar toward building our first home. Money has been pretty tight, so we settled on a small $400 Christmas budget.

And the $400 isn’t just for gifts—it’s for everything!

On the one hand, having such a small Christmas budget is a bit disappointing.

I kind of love spending extra money during the holiday season even though I’m typically a saver!

Giving is one of my favorite things about Christmas. I love picking out the perfect gift, wrapping it beautifully, and watching someone’s face light up as they open it.

It’s a blast!

But there will definitely be fewer gifts this year.

And that’s okay.

Some years are like that.

The upside to a small Christmas budget is that it encourages creativity and resourcefulness! (More on that in a minute…)

A $400 Christmas budget might seem impossibly low, but spending less can be done! Making a small budget work is all about choosing your priorities and letting some things go.

Before we jump into the numbers, I want to make sure you have a chance to download The Merry Little Christmas Planner!

I designed The Merry Little Christmas Planner to help you to get organized, cash-flow Christmas, and be present with your family all season long!

It has…

  • 30 pages of printables
  • beautiful wintery forest, watercolor illustrations
  • pages to keep you organized and one step ahead
  • emphasis on staying in-budget so you can stay out of debt

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Our $400 Christmas Budget | Spend Less on Christmas

Our $400 Christmas Budget

Here’s the breakdown of what we plan to spend on Christmas this year:

$260 — Christmas Gifts (Includes all the gifts for Benj, me, Jack, extended family, and friends.)

$40 — Fresh Christmas Tree (This is something that always makes Christmas feel like…well…Christmas to us!)

$15 — Stocking for Jack (We’d been using a tiny stocking we bought for Jack as a baby, so it’s time to upgrade!)

$36 — Christmas Cards, Letters, and Photos (We had to trim down our Christmas card list this year, but plan to add people back in next year.)

$22 — Stamps (Pricey, but necessary for mailing our Christmas cards!)

$27 — Misc. Expenses (This category covers little things like wrapping paper, tissue paper, tape, and minor unforeseen expenses.)

$400 — TOTAL

We usually spend around $600-$750 on Christmas, so this feels like quite a bit less!

$260 Christmas Gift Budget Breakdown

About two-thirds of our $400 Christmas budget is set aside for gifts.

Here’s the gift breakdown for family and friends:

$50 — Benj (My gift budget for Benj.)

$50 — Lauren (Benj’s gift budget for me.)

$50 — Jack (We pick out gifts for Jack together.)

$80 — Family (A few gifts for our parents, grandparents, etc. Normally we also do a fun gift exchange with Benj’s side of the family, but we decided to opt out this year.)

$30 — Friends (We love creating in the kitchen, so we’re planning to make some special treats for local friends.)

$260 — TOTAL

Our $400 Christmas Budget | Spend Less on Christmas

Getting Creative with Our $400 Christmas Budget

As you can see, those numbers are pretty tight!

Normally, we’d give ourselves more wiggle room. But this year, we’re trying to be especially resourceful and creative so that we can spend less.

For instance, our budget for Jack’s stocking stuffers is only $10. He’ll turn 3 just before Christmas, so he’s still pretty young and doesn’t expect much.

We started out by asking ourselves what we could give him for free before we starting thinking about gifts that cost money.

Here’s what we’re planning to put in his stocking (so far).

Jack’s Stocking:

  • $1 — a handful of coins
  • $1 — Trader Joe’s Peanut Butter Cups
  • $0 — a few mandarin oranges (We’ll be buying them anyway.)
  • $0 — a bag of homemade treats
  • $2 — a tin of Newman’s Own cinnamon mints
  • $1 — a new toothbrush (Dollar Tree)
  • $1 — a blank notebook for coloring on the go (Dollar Tree)
  • $0 — 2 Beanie Babies (I have a box of these from my childhood!)
  • $1 — play dough (Dollar Tree)
  • $1 — stickers (Dollar Tree)
  • $8 — TOTAL

Toddlers are super easy to please! Honestly, he’ll probably be the most excited about the mandarin oranges.

(NOTE: If you’re looking for some $1 toddler stocking stuffer ideas, check out this post: 40 Dollar Tree Toddler Stocking Stuffer Ideas)

Spending $10 on stocking stuffers leaves us with $40 for the rest of his gifts.

My dream was to buy him a toddler table and chair set because I know he’d absolutely love having a table that was his size. However, it was going to cost his entire Christmas gift budget, so I figured it would have to wait.

But then God provided us with 3 toddler-sized chairs for free!

Our next-door neighbor recently moved away and put them out with their trash! We couldn’t believe it because they’re in beautiful condition!

Now we just need to find him a table. We’ll either buy one used and refinish it or make one from scratch. (Unless, of course, we find one sitting on the curb. ;)

You get the idea: resourcefulness, creativity, patience.

Giving Gifts People Actually Want

Gift-giving at Christmastime can be a bit tricky. How many of us really need more stuff sitting on our shelves and cluttering up our closets?

There are 4 main categories of gifts I like to give (and receive, for that matter). Some gifts will fit into multiple categories!

1. Practical Gifts (kitchen utensils, small appliances, a leather bag, supplies for a favorite hobby, luggage or packing cubes, reusable produce bags, etc.)

2. Consumable Gifts (dark chocolate, high-end coffee, specialty teas, natural bath products, soy candles, gourmet foods, cute journals, etc.)

3. Meaningful Gifts (personalized gifts, hand-painted or hand-drawn artwork, framed photos, photo books, games that encourage family time, etc.)

4. Experiences (cooking or art classes, gift cards to favorite restaurants, a gym or workout class membership, aquarium tickets, zoo or botanical garden memberships, movie tickets, etc.)

When you consider the recipient’s hobbies, interests, likes, and dislikes, you can more easily come up with a gift they’ll be truly excited about.

Don’t forget—giving your time and talent can really bless someone else. Maybe you’re a fantastic cook, a pro at decluttering and organizing, or a trustworthy babysitter.

People often appreciate intangible gifts most of all because they meet a need and don’t require closet space.

Our $400 Christmas Budget | Spend Less on Christmas

Considering Other People’s Expectations

Let’s get something straight.

Your spending should align with your priorities. 

It’s perfectly fine to spend less on Christmas some years, and more on others.

Please don’t go into debt because of other people’s expectations! Saying “no” can make you feel like a grinch, but that doesn’t make you one!

Do the best you can with the resources you have.

There are plenty of creative gifts you can give that are inexpensive or don’t cost a dime.

If you need to tell your family that you’d prefer to not exchange gifts this year—or that you’ll be giving homemade gifts instead—there’s no shame in that!

But DO tell them ahead of time so that there aren’t any surprises on Christmas day.

Doing a gift exchange with extended family is a great way to help keep Christmas spending under control. Giving one really nice gift is usually more cost-effective—and simpler—than trying to find a bunch of small gifts for everyone!

Have everyone randomly draw names out of a hat—or you can use a Secret Santa generator. Create guidelines and set a price range for how much each person should spend.

This idea works especially well for larger families like my husband’s. Now that there are several married couples and lots of grandkids, it’s impossible to give everyone a gift. We do our gift exchange Secret Santa style, which adds a fun element of surprise!

Christmas Giving and Donations

You might be wondering, “What about giving to those in need?”

We didn’t include giving in our $400 Christmas budget because we like to keep track of giving in a separate budget category.

Donating to Samaritan’s Purse, Operation Christmas Child, and local causes are a few of our favorites.

Plus, donating our time and performing acts of kindness don’t cost a dime!

Focus on What Matters

When we keep our focus on what Christmas is truly about—what really matters—everything else tends to fall into place.

If we’re worried about impressing people or if we’re chasing perfection, we’ll wind up feeling frustrated and disappointed.

Ask me how I know.

Gifts are an expression of love, but they certainly don’t measure it!

As a family, we try to keep Christmas focused on the birth of Jesus—as well as things like spending quality time together and keeping fun traditions alive!

Those things matter to us most of all.

If you have any questions on how we’re making our $400 Christmas budget work this year, let me know down below! I’d be happy to answer them!

And don’t forget to download your copy of The Merry Little Christmas Planner!