10 Top Tips on How to save money at Christmas

This post was most recently updated on November 30th, 2021

This is the time of the year where all the spending seems to come at once. There are some simple tips and tricks that you can use to help keep the holiday season more affordable and to even save money at Christmas!

Whether you celebrate Christmas, Hanukkah, Yule or one of the many other end of year traditions , this can be an expensive time of the year for many of us.

How to save money at Christmas

Here are 10 things that we do in our family that greatly reduce the amount of money that we spend around Christmas time.

1) Save All Year Round

I know it sounds kinda nerdy, but being prepared with a nice little wad of cash when it comes to the end of the year, really is a great stress reducer.

To work out how much you need to get you comfortably through the Christmas shopping and other Christmas spending, add up how much you spent last year on extra food, outings and gifts and divide that number by 52. Now simply set up a separate bank account and an automatic payment in to it for each week, just to be sure you could round it up to the nearest $10 each week.

At the end of the year you will have a lovely little holiday buffer to dip into. You may choose to make this account a bonus saver where you earn extra interest, or like us, have it set up saving interest against our mortgage.

2) Reduce Your Gift List (and your gift budget)

How many people are you buying for? Do you REALLLLY need to buy Great Aunt Sue another set of bath salts or letter set?

Secret Santa

If you have lots of adults to buy for, maybe you could suggest a Secret Santa deal, and make it that you only have to buy for one person.

Lower budget

As a family we do homemade gifts for our parents, buy for only one of my 3 siblings (it is shared around), and get something for under $20 for each of the children cousins.

Keep gifts simple

Our own children get a small stocking of mostly treat food and hair ties/clips then their gifts from us are usually clothes, books and a practical something that they want – this year it is a sleeping bag each.

Avoid gift cards

While a gift card might seem like the easy option, often you can find a cheaper, appropriate gift for much less that what you would spend on a gift card or voucher.

Make vouchers

Alternatively make your own vouchers – for a cooked meal, babysitting, gardening or other such service. They cost you nothing but time, and are often very much appreciated by the person receiving the gift!

Buy during the sales

If you make a list ahead of time you can often do most of your holiday shopping before the Christmas season by making the most of clearance sales and other big sales. You can dip into your holiday budget to buy these things, knowing they will save you money later when the festive season arrives. Black Friday is the Friday immediately after Thanksgiving and it often has a huge number of really good sales, even in NZ where we don’t even celebrate Thanksgiving (though maybe we should, being thankful is always a good thing! Also PIE).

These little Christmas savings can really add up and substantially reduce your holiday spending.

3) Homemade or Second Hand

If your holiday gift list really is paired down as small as it can be already, suggest trying for homemade or second hand gifts.

I have a great list of frugal gift ideas , not all of them are super cheap if bought new, but many you can find at garage sales, or make them yourself.

Just be aware that the perfect holiday gift might actually cost more to make than it does to buy! If you are just doing a single item, but the time you buy all the resources to make said item, it often ends up more expensive. If, however, you are making a whole lot of the same item, it can be much cheaper to make your own.

Sometimes the perfect gift isn’t brand new. Hunt around, there are some really awesome vintage items that would suit even the most modern home.

If you are part of a secret santa or fun gift exchange, finding random or hilarious items at a second hand store or a handmade gift is an unique way to fill your obligations while still meeting your savings goal.

4) Be Picky About Events

Nobody NEEEDS to go to all the end of year functions. Choose your favorite ones and go to them only.

This is a very busy time, but it is also a very magical time. Slow down and try to enjoy it. Don’t waste the whole month running from one event to the next.

Spend time at home enjoying the ambience and your loved ones, go for a walk and look at the Christmas lights, or listen to a choir singing carols.

5) Develop Cheaper Traditions

Friends, family, partners and children don’t really want the expensive things. What they REALLY want is you, your love and your time.

Take a walk by the beach, or a drive to a mountain top.

Play board games together, or a sport on the lawn. Make special loaded popcorn and watch a Christmas movie together.

Roast marshmallows while listening to carols.

Take a box of food to people in need, or to the food bank. Make gingerbread houses , or serve a meal at the soup kitchen.

Stay up late and look at the stars.

Find a candle light service to attend.

These are all wonderful and fulfilling activities that usually don’t cost any extra money.

6) Make ‘Advent Calendars’ Activity-Based

Kids do not need more chocolate. They get enough sugar in their lives without starting the day with a handful of candy.

You can make your own advent calendar very easily. Set up a simple string with an envelope for each day. Fill the envelope with a card with each day’s activity on it.

All the activities above can all be included, as well at the kids end of year recitals, a special meal, making and handing out Christmas cards, visitors and crafts.

7) Be Prepared

If you are organized and plan ahead, you can avoid paying extra for convenience.

Buy your celebration food and items for Christmas dinner over the month or so before the holidays as they come on special.

However, be sure to only buy things you know you will use otherwise it will actually not save you money at all!

Plan ahead to make something like vanilla essence, whipped body butter or beeswax wraps as gifts and save money buying something for Christmas gifts.

8) Embrace the Potluck Meal

If you are hosting people at any point over the holiday season, make it potluck!

If you are too “Type A” to let people choose what they bring, and risk a whole table of potato chips and popcorn, then construct a list of ideas and put it on Google Drive so people can add their names next to it. You can also add links to recipes there.

This is a great way to make your Christmas budget go further as well as allowing others to feel like they are contributing and they are able to bring their favourite celebration dishes and foods.

9) Use Real Plates

I know that for big crowds plastic disposable dinnerware is easy. I get it, I do. But don’t be lazy, save the planet and your wallet and just wash the dishes.

It is so much nicer eating from a real plate, with real cutlery and drinking from actual glass. If you don’t have enough to make do from your place, ask a few others to bring some, or check out second-hand stores, garage sales or auction houses to grab some for super cheap.

At the end of the celebrations, wash them, pack them in a box and store them in the garage or attic until next time.

10) Take a Stay-cation

You don’t actually have to go away to be able to have a holiday. Stay at home. It saves you the travel cost (and stress!), accommodation is free, and you already have everything you need to eat. No house sitter to pay and no pet sitter to organize.

Holiday expenses can get out of control very quickly, staying at home ensures you don’t have to by duplicates for things you forgot to bring with you, and encourages you to eat at home rather than at a restaurant or a cafe.

Set a budget and make a list of things you love to do in you area. Choose some things that you have never done too. You can use your budget to pay for meals out, or treat food from the store that you can make at home, or to get in to an attraction that you want to see.

Put away your technology in another room for the week, and spend the time doing things together. If you really must check your technology, set a timer and when it goes off, it is all to go away again. Read here for some great tips for traveling with kids.

Bonus: Set yourself a savings challenge

Not many things feel better than meeting a savings goal. You could either use a jar with cash, or set up a Christmas savings account.

The idea is every time that you save money over the holiday period (pick some dates and stick to them) you put those savings into your jar or account, and see what you get at the end of the month.

If you budget $20 for a gift and the homemade gift only cost you $10, the additional $10 goes into your savings challenge stash. Instead of buying wrapping paper, make reusable gift bags from scrap fabric. Bake or harvest items to use as stocking stuffers. Find a wildling pine to use as a Christmas tree, and let your kids make the Christmas decorations at school.

All these little things can really add up, giving you a healthy little saving bonus at the end of the holidays.

So there you go, 10 ways you can save money over the holiday break. It might mean changing some of the things you do now, but you may well find a new tradition that you just love.

Check out these 25 fun and frugal family traditions.

What cheap or frugal things do you love to do to help make the holiday season more affordable?