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How to Budget for an All-Cash Christmas

Did you know Christmas used to be celebrated for 12 days? Imagine that holiday bill. Twelve long days of presents, feasting, stocking stuffers, figgy pudding, indigestion and tinsel. Seriously. Seven swans a-swimming sounds like no small expense.

Even though Christmas is technically now just the one day, your wallet might feel like it’s still 12. The multiple celebrations and costs can really add up. If you wait until December to prep your budget, you might feel like coal is your only option.

Avoid the coal. We’ve got six steps you can take to budget for an all-cash Christmas. That way, after all’s said and done on December 25, you’ll be sitting in a pile of wrapping paper and memories, not debt. Because the world may tell you charging all those gifts then paying them off well into March is normal—but buck the norm. After all, Rudolph was weird, and he saved Christmas.

1. List out the people on your nice list this year.

First, you need to think of everyone to buy for this year. Family, friends, co-workers, teachers, fifth cousins twice removed. Yes, it can get a little crazy.


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We suggest you trim not just the tree this year, but also your shopping list. Have conversations with family about drawing names instead of buying for everyone. Plan to say no when random work parties ask you to bring a classy $25 gift for Dirty Santa. Keep Santa clean and your bank account on track this year. Keep the list small(ish). Use our Christmas Present Planner to help. 

2. Brainstorm gift ideas and costs.

Once you know the people you’re getting gifts for, write out a couple things you can buy or make for each person. Yes. Make. Of course, we aren’t suggesting those macaroni picture frames your parents pretended to love getting from you when you were little. But if you have true skills to knit, paint, bake or build something people will actually love, then plan to get crafty this Christmas.

Supplies still cost cash though, so plan out how much you’ll need to spend on those or on the book, mug, family photo session, or whatever else you’re gifting each person. Then write down the ideas and estimated costs.

Side note: Even if you don’t exchange gifts for the holidays, consider using your Christmas savings to give to others. You can buy toys for foster children or a turkey for a family in need. And if you’re in the middle of paying off your debt, there are plenty of ways to spread Christmas cheer without spending a dime—like volunteering at a food bank or donating your gently-used items.

3. Add up all the planned amounts.

After you’ve made your list and checked it twice, it’s time to total up all the gift costs. This will be your Christmas savings goal. (Don’t forget to budget for extra shipping if you’re not planning on traveling this Christmas.) And remember, the best way to keep debt from decking your halls this year is to stick to this goal. When you’ve got a plan, you’re more likely to not overspend come December.

4. Set up a sinking fund.

Now that you know how much you need to save, set up a sinking fund in your EveryDollar budget. Here’s how:

  • First, find the Savings category in your budget.
  • Click Add Item and label your fund—something like Christmas Gifts 🎄. Then click Done.

  • Click on the Christmas savings line item you just created and select Make This a Fund. This lets you set your savings goal and keep track of how much you’ve saved so far. You can also add a due date and savings reminders to your fund.

5. Start saving each month.

With your fund all set up, it’s time to do some more math. Divide your total savings goal by the number of months left until the most wonderful day of the year. This is how much you’ll need to save each month.

Where do you get that Christmas cash? Well, the quickest ways are to cut back your spending in other areas, pick up a side hustle or extra hours at work, or sell something. But here are some more ideas for making extra money.

Remember, the extra work now means that when Christmas bells are ringing, you can truly enjoy them knowing you didn’t underplan or overspend.

6. Remember: Even Santa lives on a budget.

If the total you come up with in steps three or five of this list seem impossible, tweak! The only way Santa’s able to give gifts to every child in the world is by being budget-minded. We should follow suit.

Don’t feel like you have to prove anything to anyone with how much you spend on the holidays. Seriously. That’s not what Christmas is supposed to be about. Just ask the end-of-movie version of George Bailey, Ebenezer Scrooge or the Grinch. Christmas is about valuing each other, not stuff.

Make your gift-giving this year about celebrating the joy of the person, the season and togetherness. And remember, Elvis warned us that debt makes for a blue Christmas. (That's what the song was about, right?)

Want to be more intentional about saving, not just for holiday gift giving but for all those other things you’re wanting too? You can learn how to better manage your money all year-round—with Ramsey+. You get the premium version of EveryDollar to make budgeting a breeze, money courses like Financial Peace University, and the BabySteps app to track your progress. Try Ramsey+ today for free!

Already have Ramsey+? It could be the perfect gift for someone on your list this year.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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