How to Save Money for Christmas Shopping [UPDATED]

More than 40 percent of people in the U.S. plan to go into debt during the holiday season, according to a U.S. News report. You do not have to be one of them, though. 

You can save money for Christmas shopping by setting aside $80 per month or saving one or two of your paychecks from months with five weeks. You can also use Christmas gift-buying tips to save money on the cost of each gift so you can buy more presents.

To learn how to be an expert gift-giver, look at this guide. It includes step-by-step instructions to help you save for Christmas shopping so you never run out of money before you buy a gift for everyone on your list. 

How Do You Save Money for Christmas Shopping? 

Buying gifts during the holidays is one of the best parts of the season. Running out of money to buy gifts or going into debt to cover everyone on your list is not. So, follow these steps to save money for shopping. 

1. Create a List of All the Gifts You Want to Buy in January

Planning to buy Christmas gifts in January might sound early. However, the earlier you plan, the more time you have to save. So, start by writing out a list of everyone you want to buy gifts for the next year. 

2. Decide on a Budget

Next, you need to decide on a total budget. The average American spends between $800 and $950 on Christmas gifts yearly. However, you should look at your finances to determine how much you can comfortably spend buying gifts. 

christmas budget

3. Set a Limit for Each Gift

Once your budget is set, you can decide how much you want to spend on each gift. If you do not think you can buy for everyone on your list, consider suggesting a gift exchange where each person buys one nice gift for someone in their family.

By doing a gift exchange, everyone gets a gift they want, and you do not have to buy a gift for everyone. Many larger families do this because it gets expensive to buy everyone something.  

4. Buy Gifts Throughout the Year

Once you set your budget, you can start buying gifts. Buying presents throughout the year allows you to buy things when they are on sale. When you find a good deal, purchase it and save it until Christmas. 

presents for Christmas

5. Cut Back on Expenses

There are probably a few things you can give up to save more money. You can get your morning coffee from a gas station instead of Starbucks. Or, make your breakfast and lunch at home instead of going out to eat. 

Set aside the money you would normally spend in a Christmas shopping fund. To discourage you from spending it, take it out of the bank and put it up in your closet or transfer it to a separate account that you do not use for spending. 

6. Save a Paycheck or Two from Months with Five Weeks

Each year, some months have five weeks instead of four. That means you receive an extra paycheck a couple of times per year. You will receive an additional week of pay for four months if paid weekly. If you receive your pay bi-weekly, you receive two additional checks throughout the year. 

Save money for Christmas

To save money for Christmas presents, set a week or two of pay aside when you receive an additional check. 

Tips to Save Money on Christmas Shopping

In addition to saving money throughout the year to cover your Christmas gift buying, you can also use tips to help you save money on the cost of each present. Here are a few tips: 

  1. Instead of buying gifts in the store, do an online search for the best price and order your gifts. 
  2. Buy gifts in bulk from Costco or Sam’s. 
  3. Look for presents at Marshall’s, Homegoods, Ross, or other discount stores. 
  4. Use coupons or cash-back offers. 
  5. Make gifts for some people instead of buying a gift for everyone. 

cookies decorated for Christmas

Final Advice on How to Save Money for Christmas Shopping

If you know how to save money for Christmas shopping, you do not have to go into debt like millions of Americans. While it is nice to buy presents for people, your friends and family should understand if you cannot buy a gift for everyone. 

If you can’t buy something for everyone, show your appreciation for the people in your life by giving them a card with a heartfelt message or baking them cookies. 

By spending less on Christmas shopping and saving your money, you can spoil yourself and others more later in life. So, do not feel bad about sticking to your Christmas budget. If you do go into debt during the holidays, use the 10/20 rule to get out of debt quickly. 

For other finance topics like why houses are so expensive, how to fill out a check, and jobs for early birds, read the other guides on