It may be the most wonderful time of the year, but the holiday season is also typically the most expensive time of year, and that can make it the most stressful time of year too.

I think most of us can agree that what was once a celebration of Christ and Yuletide and a holiday centred around family traditions and goodwill to all men has now been exploited, capitalized upon and turned into the most commercial holiday on Earth. And it seems to get more commercial and cost more money every year! Or is it just me?

Personally, I usually start planning for the following Christmas on Boxing Day because I know if I don’t shop, plan and prepare all year, there’s no way we could afford a modern Christmas with all the jingle bells and whistles without going massively into debt. I take advantage of Boxing Week sales and start stocking up for the following year right away. 

Throughout the year, I shop for gifts when I find things on sale, preserve food in the summertime to put away for the many holiday parties and dinners that abound this time of year. I also start making Christmas gifts well ahead of time so that I don’t have to spend a whole bunch money on gifts and supplies all at once when the season hits.

And yet, every year, despite my best efforts, we still end up blowing our budget. It just always seems that there’s one last gift to buy or a few more ingredients or one more bottle of wine… or maybe two.

This year we’re tighter on funds than we’ve ever been after purchasing our first home and spending every penny we had and more on renovating and turning our garage into a rental (which is still ongoing and costing us money).

So I decided to brainstorm a list of frugal Christmas ideas that will help ensure we stay on budget while still having a fun-filled Christmas together with family.

I even made a free printable Holiday Budget Planner for me and you so no excuses!

I hope that you find comfort and inspiration in this list and in knowing that it is possible to celebrate Christmas and still make it magical and memorable without going broke or starting the new year at a massive deficit. 

Here’s how…

10 ways to have a frugal Christmas (and a happy, debt-free new year)

1. Set A Budget

The only way to stay on budget is to start by actually making a budget. As much as you might not want to do it, now is a good time to review your finances and decide on how much you can actually afford to spend this holiday season. 

If you’re married, do this with your partner and agree on spending limits for each other, for any children you have and for other family members and friends. Also budget for food and drinks for holiday dinners or parties you’re planning on hosting or attending as well as for travel costs and other holiday incidentals like outings and activities or perhaps a few humble decorations:)

Oh, and don’t forget about New Year’s Eve! This night can blow what’s left of your budget and then some if you decide to go out so set a spending limit now and stick to it.

Do your due diligence to only spend money you have in the bank and avoid using your credit card at all costs. If you do use your credit card for online purchases or to collect points, make sure you have money in the bank to pay it off in full so you don’t end up paying interest on your purchases.

And track your spending!!! (I need to take my own advice on this one).

Hey! Fancy that! I just so happen to have a freebie to help you do all of the above:

>> Click to download my FREE HOLIDAY BUDGET PLANNER <<

2. Make A List & Check It Twice

It’s easy to overspend when you’re trying to buy for everyone and their dog, so make a list of family members and friends (human and furry) you’re going to buy for and stick to it. 

First of all, decide on who you want to buy for when it comes to family and close friends. Maybe instead of everyone buying for everyone else, you can arrange a Secret Santa gift exchange and then each person is only responsible for one other person. This works especially well in large families where it’s just not possible to buy for every single person.

Next, limit gift-giving to a few extra special people. I’m sorry, but you do not have to buy something for every one of your co-workers or your hairdresser or your kid’s principal at school.

Sure, it’s nice to give to all of those people gifts if you can afford to (and it is possible to afford it if you follow the next step and make your own gifts), but you don’t need to buy gifts for everyone, and you certainly shouldn’t feel guilty about it.

We get sucked into believing that we need to buy presents for everyone we know because we’re bombarded with advertisements that perpetuate that message this time of year. Don’t be fooled by smart marketing ploys. 

Instead, make a batch of cookies for the office or sign up to volunteer at the school. But please, don’t blow your budget buying for your third cousin, twice removed. (Is that a thing?)

3. Make Your Own Gifts

If you want to make your dollar stretch and give gifts that are truly from the heart this season, make some of your own gifts. You can either make something really personalized for one special person that takes more time but less money (think hand-knit scarves and hats or wooden handcrafted signs or decorations), or you can do what I do and make a whole bunch of gifts in batches and have gifts for everyone on your list and then some.

And if you’re not “crafty,” I’ve got you covered. Because I’m not particularly crafty either. But I’ve learned to make a few easy gifts in the comfort of my own kitchen that require very few ingredients and pennies on the dollar of what they would cost if I bought them from the store. Here are just a few ideas for homemade Christmas gifts:

Peppermint Sugar Scrub

Essential Oil Rollerballs

Rosemary Hair Pomade

Oh, and don’t forget any extra homemade jams, jellies & preserves you have stored in your pantry. These make an excellent hostess gift around the holidays!

4. Plan Frugal or Free Family Activities to Celebrate the Season

There are so many fun things you can do for free or for the cost of a small charitable donation around this time of year. Plan a few frugal but festive family activities to help make the holiday season merry and bright. 

Some ideas include: 

• going ice skating or tobogganing
• attending community Christmas parties, parades and other holiday events that are free or by nominal donation
• going to visit Santa
• going to a tree farm (or out to the woods if you can) to cut down your own Christmas tree
• building a snowman
• having a snowball fight
• driving around to look at Christmas lights
• drinking hot chocolate and roasting marshmallows over a bonfire 
• playing games at home with family and friends
• going to church to listen to the choir sing Christmas carols
• going carolling in your neighbourhood
• volunteering for a local organization like a soup kitchen, animal shelter or children’s hospital

* Some added bonuses to volunteering are that you can teach your children a valuable lesson about giving without expecting anything in return, you bring Christmas cheer to others in need and it doesn’t need to cost you a thing but your time. Plus you get that warm fuzzy feeling that comes from giving selflessly:)

5. Stay Home

Nowadays many of us live far from our loved ones and families are split up all over the country (and even the world). Much as we may long for a simpler time, most of us don’t all share the same family homestead anymore, let alone the same town or even state. For this reason, travelling has become synonymous with the holidays for a lot of people, and it can break the bank before you can say Humbug!

Of course, Christmas is nothing if not spent with family, so it’s important to find a way to go the distance for those who matter most to you this time of year. However, if you and your immediate family are always the ones travelling out of state to spend Christmas at grandma and grandpa’s, maybe suggest that this year you’ll host Christmas and invite your extended family to come stay with you. (This is what we’re doing this year, and everyone was just fine with making the trip out to see us instead of the other way around).

An added bonus to staying home is that you get to spend Christmas morning in your own living room while your kids open presents under their own tree. There’s something special about waking up at home on Christmas morning, and personally, it’s a tradition that we’re committed to uphold most of the time now that we have a daughter of our own.

Another suggestion is to make plans to travel after Christmas when airfares and travel costs tend to go down. Christmas is one of the most expensive times of the year to travel, not to mention the busiest. Avoid the mad rush and the premium pricing and travel in January instead if possible.

6. Decorate Frugally

It can be really tempting to go all out with your decorating at Christmas time, and there’s certainly nothing wrong with that! However, it’s not necessary to go buy hundreds of dollars worth of decorations every year.

Start by decorating with what you already have. Then, fill in the gaps with frugal homemade decorations like snowflakes cut out of printer paper or popcorn garlands and items found in nature like holly, pine cones, cedar bows or these frugal handmade birdseed ornaments.

Build your Christmas decoration collection slowly over the years, acquiring just one or two new decorations each year. This will make each item more special as you reminisce about Christmases past as you pull your decorations out of their boxes each year. 

Bonus pro tip: save money on decorations by buying them after Christmas when they’re on sale and putting them away for the following year.

7. Shop From Your Home Pantry for Holiday Meals & Parties

When it comes to planning your holiday dinners, deserts and appetizer platters, start by taking an inventory of your pantry and freezer and figuring out what you already have on hand. 

We have a ham in our freezer that I bought a couple months ago when it was on sale, so that’s the star of our Christmas dinner this year! We’ll also be using our jars of home-canned apple pie filling and home-canned pumpkin to make apple crumble and pumpkin pie for dessert. 

Our preserves will accompany appetizer platters and our home-canned cranberry sauce, sauerkraut and homegrown carrots we have in cold storage will accompany our Christmas ham. This leaves just a few fresh ingredients we’ll need to purchase closer to Christmas day.

Whether you grow or preserve your own food or not, it’s worth it to take stock of any food you already have on hand and use that as a starting point for holiday meals and parties. You’ll likely still need to buy a few things, but this can potentially cut your food costs exponentially this holiday season.

Click for more tips: How to Shop From Your Pantry Like A Pro.

Oh, and you can get my pantry and freezer inventory templates along with tons of other free printable in our Free Resource Library, so head on over there too!

8. Cash in Your Points

If you collect loyalty points at your local grocery store or drugstore, now’s a good time to cash them in for gifts and groceries. 

I save my points all year to spend at Christmas so I can basically pay nothing for Christmas dinner. Likewise, I save store points and get money off bigger ticket items or get stocking stuffers for free.

Look through your wallet and pull out any cards you have money or points on. Figure out exactly what you have and decide how you want to spend them. It’s useful to factor this into your budget! 

9. Stay In & Have A Games Night For New Year’s Eve

New Year’s Eve can be the coup de grâce when it comes to blowing your budget over the holidays. If you plan on going out on the town, this night can run you a few hundred dollars for a a new outfit, cover charge somewhere, dinner and drinks.

If you go to a party, the costs are a little bit less, but you might still end up spending on an outfit or on babysitting for your kids if it’s adults-only, and babysitting on New Year’s Eve can cost extra.

Instead, why not lay-low this New Year’s Eve and stay in. You can either have a games night just for your family or invite friends over to join the fun. (My hubby and I have made a tradition out of staying in on New Year’s Eve with a cheese platter, some champagne and a Monopoly board!)

If you have other people over, have everybody bring an appetizer to share and entertain potluck-style. Make sure everyone knows it’s a casual party so no need to dress up or get your hair done! 

Organize games and activities for the kids and adults alike like Uno, Trouble, Clue and Twister. If it’s adults-only, play poker, Pictionary, charades, Monopoly or Trivial Pursuit. For some raunchy adult fun, I highly recommend Cards Against Humanity. It’s always good for a laugh, but only play with adults who have a good sense of humour!

10. Focus On the New Year

Last but most certainly not least, think ahead to the new year and don’t get too caught up in the hype and gluttony of the holiday season. It’s really easy to overspend if you’ve got a one-track mind when it comes to Christmas and you’re willing to spend anything to have the “perfect” Christmas and get everybody on your list everything they want and more. But if you focus on starting this new year off with a bang (and a financial head start), it’s easier to keep your spending in check. 

Focus on the feeling you’ll get when your bills come due in January and you find you’ve got money to spare! Or at least the feeling you’ll get on New Year’s Day when you wake up after a games night at home without a hangover or the worry of checking your bank statement to find out how much you actually spent the night before.

… Okay. Maybe you’ll have a hangover. But after all of that saving, you’ve earned yourself a champagne toast 😉

Get Back To Your Roots (And Back In The Black)

Heading into the holidays, it’s all too easy to get caught up in the hype of spending money you don’t have on things you don’t really need. This year, make a plan to do things a little differently and have a frugal Christmas. Focus on spending time with loved ones and enjoying the magical things about Christmas that don’t cost a thing. Honestly, the holidays shouldn’t cost your firstborn child their college tuition!

So this year, let’s get back to our roots and celebrate Christmas for what it really is: A time of togetherness, celebration and peace on Earth (no arguing in the comments section on Christmas Day!!!)

And let’s celebrate the New Year with a positive balance in our bank accounts. You just can’t put a price tag on any of that.

For all the things you do need to put a price tag on, download my FREE Holiday Budget Planner and start saving for a happy, debt-free new year.

Fa la la la la la la la la!