How to Have a Christmas Budget when You’re Broke

affording Christmas when you're brokeIt may be called the most wonderful time of the year, but when you don’t have money, the holiday season can cause anxiety and heartache. This is especially true when you have kids. No parent wants to disappoint their kids on Christmas morning. When you’re struggling to make ends meet, it can seem like there’s just no other alternative. Here are some ideas on how to work with a small or nonexistent Christmas budget:

Start a small Christmas budget now

It’s not too late to budget for Christmas. If you don’t already have a basic budget that you use to keep tabs on all of your monthly expenses, start one now. Right down all of your bills and monthly expenses, and break down your income.



Knowing where your money goes is a crucial step in managing it well. You may not have much, if anything left over after paying your bills. The important thing is that you are aware of how your money is being spent. If it’s possible, start setting aside a few dollars from each check so that you will have some money to spend on gifts.

Don’t discount the dollar store

The dollar store offers a huge variety of items that are of surprising good quality. You can find toys, crafts, and art supplies for younger children. For teens, you could create themed gift baskets, like a manicure or spa set, or car supplies. In fact, you can make gifts for just about anyone on a tiny budget. Here are some of my favorite ideas for DIY gift baskets. Get creative and think about the kinds of things that you’d enjoy receiving.

Do examine any toys that you’re considering closely though, since many are flimsy and have small parts. Personally, I would avoid anything that looks too cheap. Dollar Tree often gets in items with licensed characters like Paw Patrol, Trolls, Disney princesses, etc., so be on the lookout for those. Be picky, and if you aren’t sure about the quality or safety, stick with things like puzzles, coloring books, crayons, etc.

Shop secondhand

Young kids truly do not care at all about receiving brand new toys. They simply want something colorful and fun to play with. I’ve gotten so many great toys from thrift shops and yard sales over the years, and I’ve wrapped them up and given them to my kids. They would never know the difference!

You may be amazed at what you can find at yard sales and thrift stores. I’ve gotten books, yard toys, dolls, and more. Many times, people simply want to get items out of their homes, so they’re willing to let them go for cheap. A tiny gift budget can really stretch a long way at the right sales.

Make them a gift

If buying gifts is just simply out of reach for you this year, consider making a small gift for your kids. Something as simple as an ornament with their name and the year on it could be so special to them. You want to make them feel special and loved, and a handmade item that you took time to create for them will do the trick. Browse Pinterest for other ideas, and you’ll likely be able to find something very simple and extremely affordable.

Change the focus

The primary focus on the holidays should not and does not have to be on giving and receiving presents. Every family has their own beliefs and their own reasons to celebrate, so remember yours. Teach your children that the holidays are for enjoying time together with loved ones, no matter what. You don’t need a lot of money, a big tree, and a huge pile of gifts to have a great Christmas.

It’s so tough, because we want to spoil our kids and give them all of the materials things that they want. However, material things just aren’t important. By shifting your focus, you can help to shift theirs, too.

Christmas budget cookie baking

Plan special activities

Come up with some ideas for activities that you can do together. Spend an afternoon or an evening baking and decorating cookies. Drive or walk around your neighborhood to look at the lights and decorations. Watch a few holiday movies while sipping on hot cocoa. You can find a 10 pack of Swiss Miss at the Dollar Tree.

Find out if there are any free events in your area, like a town Christmas tree lighting, a holiday parade, or a free lights display. When you have younger kids, these types of activities can be made to feel particularly special. Simple, little ordinary things can really mean so much to our children. No Christmas budget is needed when you find free stuff!

We’re lucky that in our area, several of the towns have tree lighting ceremonies with an appearance by Santa. I can also think of quite a few public lights displays, one being in a local park, and another at a historic shopping and dining spot. It doesn’t cost us anything to go to these, except for gas in the car.

Ultimately, it’s about memories made

When they grow up, your kids aren’t going to remember all of the gifts that they received. They are going to remember the quality time that you spent together, and the wonderful memories that you make. A lack of a Christmas budget doesn’t have to mean that the holiday is cancelled this year. Focus on quality time with them, and enjoying an experience together. That matters so much more than any material items you could buy them.

About Lauren

Lauren May is a freelance writer and full-time mom living her best life on a budget.

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