Having a Great Christmas on a Tight Budget

It’s the most wonderful—and most expensive—time of the year! And if you’re like so many others who are struggling to get out of debt, this season can cause a lot of stress and completely derail your money goals. But it doesn’t have to, and you can still have a meaningful holiday season while sticking to your budget and knocking out that debt.  

Listen, I’ve been there. At one point, my husband and I had $460,000 in debt, so I know the struggle firsthand. Back in the day, our Christmases looked a lot different than they do now that we’re debt-free. But that doesn’t mean they weren’t special or fun (because I’m going to make something fun no matter what). So here are my best tips for having a great Christmas on a tight budget.  

Actually have a budget 

Creating a fresh budget each month is one of the biggest keys to success on your debt-free journey, and it’s also the key to keeping your holiday spending in check. I suggest making a zero-based budget, which just means you give every dollar you earn an assignment. If you haven’t made a budget for this month yet, this is your sign to download a free budgeting app (I personally recommend EveryDollar) and write down exactly how much you’re spending on what—and stick to it.  

And as tempting as it might be, don’t take on more debt by charging something or paying in installments just so you can get the more expensive gifts that you or your family might want. Trust me, your January self will thank you! 

Don’t try to do “the most” 

If you look at your budget and realize all your usual holiday traditions will mess with the progress you’ve made, I’m giving you permission to do the least. I’m talking less Secret Santa exchanges, less side dishes, and less travel. Seriously. Sometimes doing the least will keep you the most on track with your money. 

This goes for gifts too. Now’s the time to think outside the box and remember that a great gift doesn’t have to be over the top. Can you give the gift of quality time? Can you put your baking skills to work? What about a sweet family photo in a nice frame that’s probably a lot more special to Grandma than a bunch of “stuff”?  

You and your spouse might even agree to only buy one or two things your kids want instead of their whole wish list and totally nix the gifts for the adults in your life. They are grown. They will survive. Amen. (And let’s be honest, the real ones will support your debt-free journey.)  

Set boundaries 

Set clear expectations and boundaries with your friends and family for this season and don’t be afraid to say no to anything that doesn’t line up with those boundaries. “No” and “not this year” are some of the most powerful words to have in your vocabulary when you’re getting out of debt, so use them often—just remember to use your Santa voice, not your Scrooge voice. 

Keep in mind that the sacrifices you’re making right now are setting you and your family up for major success in the future. And hey, you might just experience a little more peace, joy and rest when you slow down and scale back instead of running around trying to meet a million expectations. 

Celebrate milestones (but don’t go crazy!)  

Milestones matter. The Christmas season can be a great time to pause and reflect on all you’ve accomplished over the past year, but get creative and celebrate that progress without spending a ton. Have a Hallmark movie marathon with homemade hot chocolate, or drive around the neighborhood to look at Christmas lights. The goal is to enjoy the holiday and make memories without tanking your budget. 

At the end of the day, don’t lose sight of what the Christmas season is really about. (Hint: It’s not about who can give the best gift or throw the bougiest holiday party). It’s not wrong to spend money on nice stuff when it fits in the budget, but that stuff shouldn’t steal our focus away from what’s most important.