Skip to main content

How To Plan Your 2021 Christmas Budget

7 minute read

David Ning

By David Ning

As much as I love gift-giving and the holiday season in general, I often find that it sneaks up on me. If you’re anything like me, you often find yourself in mid-December scrambling to get presents bought, wrapped, and even mailed. That last minute scramble often means paying more for gifts than you intended, since you’re tight on time. Paying for premium shipping (so that the gifts arrive before the 25h) can hurt the wallet even more. In short, a Christmas budget is pretty important.

The thing is, Christmas shouldn’t be a surprise. It’s on the same day every year, after all. Even non-Christmas holiday celebrations (like Chanukah or Kwanzaa) fall around the same part of the calendar. If you get taken by surprise, you really only have yourself to blame. Truly frugal individuals can save some money by simply starting their holiday shipping earlier. Here are some good ways to start planning your Christmas budget long before the snow falls (or the Christmas tree goes up, for those living in warmer climates). You’ll feel less stressed — and gave a fatter wallet — by the time December comes and goes.

Start With a Budget

This is one of the biggest reasons why holiday shopping can get out of control. Rather than deciding ahead of time exactly how much they are able to spend, many gift-givers will simply look for the “perfect” gift and then swallow the hefty price tag. On top of that, some people start to feel gift-matching guilt. That’s what happens when you spend a lot on the “perfect gift” for one person, and then feel the need to match that amount for others. Some people just have an overwhelming need to keep things fair, apparently.

Instead, sit down ahead of time (like before Halloween) and jot down how much you can afford to spend in total. Decide how that money should be allocated per person. There’s no right or wrong answers here. Just make a budget, and then stick to it. If you do happen to find that “perfect gift” idea that’s more than your budget, you can still skip it. Make a mental note of what the item is, and then save up to buy it for that person’s birthday instead.

Find Extra Money in Your Paycheck

Do you ever feel like there just isn’t any extra money available for gift-giving and other holiday expenses? You aren’t alone. Many Americans claim they feel financially unprepared for the Christmas season. It’s one of the reasons that some would prefer to skip the entire ordeal.

However, most people have access to a bit of extra money they might not have even considered: their tax withholding.

According to Kiplinger, 75% of all workers receive a tax refund every Spring. The average refund is about $3,000. So by the time Autumn tolls around, most workers have already overpaid their taxes by about $2,000. So they can certainly afford to keep the extra grand that they would normally surrender to Uncle Sam — just to get it back in a few months.

In order to do this, you should file a new W-4 form through your Human Resources department. You’ll want to adjust the number of dependents you claim. After filing it, your next paycheck should reflect the lower withholdings. That should give you some extra cash to pay for Christmas without going into debt.

One additional word of warning though: If you don’t change it back at some point, you may end up paying less tax every paycheck. That’s great for monthly cash flow, but you could still owe taxes when you file again. Some financial experts claim you should try to make sure you never give the government an interest free loan of your money. After all, that’s all a tax refund is — extra money that you’ve given the government over 12 months, that they are now returning. On the other hand, some people really count on that extra boost to their budget every Spring. So plan accordingly.

Keep a List

Santa is a famous list-keeper. In fact, he checks it twice. Personally, I think he’s definitely onto something. How many times have you thought of a great gift for someone, only to forget what you came up with? This often leads to desperation gift buying or over purchasing.

Start a list of gift recipients now. Make a note of gift ideas as you think of them. Then, when you do pick one out and buy it, make a note of that too. You’ll be better prepared, buy more meaningful gifts, and won’t accidently buy more than you need. Keeping a list will also give you more time to shop around and compare prices.


Consider DIY Gifts

Do-it-yourself (DIY) gifts are really awesome. Not only are they a money saving option, they also show the recipient that you spent time making a meaningful gift for them. The only obstacle is that it may take some time to make, so you really need to start early.

DIY holiday gifts can allow you to provide something thoughtful to your loved ones without breaking the bank. Try these seven inexpensive DIY holiday gifts this year that my wife suggested.

Sugar Scrub

A couple of years ago, my wife received sugar scrub from our cousin. This was one of her most useful gifts she ever got, since she loves scented scrubs. When she looked into it, she was surprised at how easy it is to make. If you have coconut oil, sugar, and essential oils, you can make sugar scrub.

You can also use a little food color if you are going for a specific color, as when you make peppermint scrub. Put the scrub in an attractive jar to make a perfect gift. It’s fairly unique. since not everybody will be making their own gifts.

Flavored Butter

For something a little more unique, you can create different flavored butters. Garlic butter, honey butter, berry butter, and pear butter are all possibilities. Don’t forget that you can order molds and create an attractive look for the butter or just put it in an attractive jar.

The packaging is half the appeal of DIY holiday gifts, so don’t skimp on this detail. Don’t be surprised if you get many more compliments of how great your butter tasted just because the packaging is nicer!

Cookie in a Jar

One very popular DIY holiday gift is the cookie mix in a jar. There are numerous variations of this depending on the kind of cookies you want to give. With this, you get a Mason jar and layer the dry ingredients for cookies.

Then, you wrap a bow around it or cover the top with festive fabric. Make sure to print out the recipe on attractive paper.

Scented Candles

You can also make scented candles. You can find most of what you need at your favorite craft store. With some wax, the right wicks, and a decorative jar, it’s possible to create a candle that will smell great and make a perfect gift.

And while you are at it, why not make a few more so you can use at home as well?

Brownie or Cake in a Mug

Another fun DIY holiday gift is a brownie in a mug or a cake in a mug. It’s possible to offer dry ingredients inside a fun mug.

All the recipient has to do is add a couple other ingredients and pop it in the microwave to get a single-serving treat (make sure to include the appropriate instructions). Always test these out before you give them away too. Yum!

DIY Dry Erase Board

Another inexpensive and creative DIY gift is a dry erase board. For example, you can use a picture frame as a basis for a great board.

What you need to do is buy a picture frame, but put a piece of colored paper in the frame to provide a background instead of a photo. Then the glass in the front will act as the backing of the dry erase board. Get a chunky frame and you can decorate it with ribbon, buttons, or other items to make it look cute.


Decorative Cooking Utensils

Add a little pizzazz to wooden cooking utensils and they can become a great gift. Choose a color of paint that the recipient will like and then dip the handles of the utensils in paint.

Then tie the set together with a bow and you have an attractive and practical gift for the cook in your life. If you really want to be fancy, you can even paint a pattern on each handle.

Spread Out Your Shopping

One of the many reasons why families will wake up to a January credit card hangover is because they do all of their holiday shopping at once. If you are prepared ahead of time, you can purchase one or a couple of gifts every week in the last few months leading up to Christmas. That will allow you to fit purchases into your budget rather than make one, large expenditure.

In addition, spreading out your shopping means you will have more time during the holiday season to actually enjoy yourself. You won’t be stressed as you bake cookies, set up the tree, and visit with friends and family.

The Bottom Line

Planning is the key to controlling your budget. Making sure that you have a plan in place for the coming holiday season is an excellent way to make sure you end the year right.

I know it seems really early to think about the year-end holiday but the sooner you start, the more time you have to prepare and the less stress you’ll have in a few weeks. Start now!

David Ning

Experienced Finance Writer

David is a published author, entrepreneur and a proud dad. He firmly believes that anyone can build a solid financial foundation as long as they are willing to learn. He runs, where he discusses every day money issues to encourage the masses to think about their finances more often.


Frugal Living: It’s A State of Mind (Not Just What You Buy) Budgeting

Frugal Living: It’s A State of Mind (Not Just What You Buy)

Being frugal isn’t so much about what you buy. Really, it’s more of a state of mind. A different way of living. Too often, we get caught up in penny pinching in a way that isn’t healthy for our finances – or our sanity. If you’ve been trying (and failing) to get your budget balanced […]

Read More about Frugal Living: It’s A State of Mind (Not Just What You Buy)

8 minute read

Why Your Budget Keeps Failing (And How To Fix It) Young couple worrying about bills and budgeting Budgeting

Why Your Budget Keeps Failing (And How To Fix It)

We all know that one of the cornerstones of financial success is getting the details right. Even with good intentions and managing the general money basics like we should, the reality is that we can still fail, financially speaking. One of the main reasons is simply human psychology, when our brains convince us to defy […]

Read More about Why Your Budget Keeps Failing (And How To Fix It)

7 minute read

Stop Living Paycheck to Paycheck With These Helpful Tips paycheck arriving on payday Budgeting

Stop Living Paycheck to Paycheck With These Helpful Tips

Living paycheck to paycheck is not an unusual situation. Many Americans live in that reality every single day of their lives. Modern life is expensive. For most families, it’s easy for a string of bad luck to force their finances into the red. If you’re one of the many Americans who worry about paying their […]

Read More about Stop Living Paycheck to Paycheck With These Helpful Tips

8 minute read

Effective Ways To Practice Self-Care on a Budget Budgeting

Effective Ways To Practice Self-Care on a Budget

Self-care is defined by the World Health Organization as “the ability of individuals, families and communities to promote health with or without the support of a healthcare provider.” More broadly, self-care is described as an individual nurturing their spiritual, emotional, and physical health. It’s an important part of keeping your mental health in a healthy […]

Read More about Effective Ways To Practice Self-Care on a Budget

7 minute read

Important Financial Advice Every New Parent Should Follow Budgeting

Important Financial Advice Every New Parent Should Follow

Becoming a parent will totally change your life in so many ways. If there wasn’t enough enough for brand new parents to worry about, the financial decisions alone can be daunting. Making the transition from a couple to a family can have lasting repercussions on your budgets. Taking the time to put your financial ducks […]

Read More about Important Financial Advice Every New Parent Should Follow

9 minute read

Don’t Fall For These Expensive Tricks When Dining Out Restaurant Bill Budgeting

Don’t Fall For These Expensive Tricks When Dining Out

People love going out to eat. Unfortunately, the pandemic has shut down restaurants everywhere, for the most part. That’s keeping everyone out of these establishments for now. While we wait, most of are finding that we really miss the whole experience. Not only does someone else take care of the cooking and the cleanup, but […]

Read More about Don’t Fall For These Expensive Tricks When Dining Out

5 minute read

See all in Budgeting