How to Set up a Christmas Budget
UpdatedMay 1, 2025
- Don't Christmas shop without a budget for each person on your list.
- Shop for the best deals on your gifts.
- Track your spending and don't exceed your budget.
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It’s easy to overspend on Christmas gifts. In fact, in 2018 people said they would spend an average of $1,0007.24 during the holiday season. To make sure you don’t go overboard on spending this year, it’s a good idea to set up a Christmas budget. Here’s how to do it.
1. Determine How Much You Have to Spend
Just because the average person spends over $1000 on gifts doesn’t mean you have to. What you spend should depend on how much cash you have.
If you’ve been saving up for Christmas gifts throughout the year, now’s the time to see how much you’ve been able to save. This will be your budget.
If you haven’t been saving, figure out how much money you have left over at the end of the month after your bills and other necessary expenses have been paid. This will be your budget.
Whatever you do, don’t take out a loan or fall back on credit cards to pay for Christmas gifts. The last thing you want is to add to your debt this holiday season.
2. Decide How Much to Spend on Each Person
Once you know how much you have to spend, write it down on a piece of paper or enter it into Excel sheet on your computer. Underneath the total, make note of each person you need to buy a gift for this year. This could be family members, close friends, or even co-workers. Then, decide how much should you spend on each of them. If the total of how much you spend on each of these people is higher than you budget, reduce your budget for each person or remove people from your list altogether (or both).
Your total needs to equal or be less than your budget, ex:
| My Christmas Gift Budget: $400 | |
|---|---|
| Spouse | $100 |
| Kid | $125 |
| Parents | $75 |
| Best Friend | $50 |
| Boss | $25 |
| Misc. | $25 |
| Total | $400 |
You don’t have to buy something for every person you know, and you don’t need to spend a ton of money on those you care about. Remember, it’s the thought that counts, so be smart about your spending.
It’s always a good idea to pad your budget just in case you forget someone. For example, does your workplace do a Secret Santa? Do you have additional friends or relatives that you need to add to your list? Leave extra room in your budget for unexpected gifts.
3. Track Your Budget
Stick to your budget by keeping track of what you spend on Christmas gifts. Make sure that you only spend the amount you said you would for each person. Focus on gifts that will mean the most to your loved ones—not on the price tag. And remember: you don’t need to spend money just because it’s in your budget. If you can spend less, you’ll come out ahead in the long run.
4. Look for Deals
One great way to make sure you’re sticking to your budget and getting your loved ones what they really want is by looking for shopping deals. Whether you use coupons, find stuff on clearance, or brave the crowds on Black Friday, you can often find great gifts for less than you would normally pay.
5. Create DIY Gifts
Even though you added extra padding in your budget, there might still be some friends and family you forgot. But that doesn’t mean you should take money from your emergency fund or pull out a credit card. Instead, you could making your own gifts for anyone you may have forgotten along the way.
Cookies, homemade ornaments, and gift baskets are perfect, DIY-friendly gifts that your family and friends will love. And since you put time and effort into making them yourself, these gifts can feel even more special than those you buy online or at the store.
6. Don’t Forget about Holiday Cards
Everyone wants to feel appreciated and loved. A gift in a box is just one way to express that you care. But you don’t need money to show someone you love them. Sometimes the greatest gift you could give is a heartfelt card. It hardly costs anything, but it could mean the world to a friend or family member.
It’s the Thought That Counts
You might feel pressured to buy extravagant gifts for friends and family this holiday season, but a price tag isn’t what matters most. No matter what gift you give them, your friends and loved ones will care more about the fact that you were thinking about them and wanted to show them you care.
Debt relief stats and trends
We looked at a sample of data from Freedom Debt Relief of people seeking a debt relief program during November 2024. The data uncovers various trends and statistics about people seeking debt help.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In November 2024, people seeking debt relief had an average of 79% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Credit card debt - average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).
Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to November 2024 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $15,618.
Here's a quick look at the top five states based on average credit card balance.
| State | Average credit card balance | Average # of open credit card tradelines | Average credit limit | Average Credit Utilization |
|---|---|---|---|---|
| District of Columbia | $16,967 | 7 | $24,102 | 121% |
| Arkansas | $12,989 | 9 | $28,791 | 83% |
| Tennessee | $13,822 | 9 | $27,261 | 82% |
| New Mexico | $11,860 | 8 | $25,731 | 82% |
| Kentucky | $12,834 | 8 | $26,156 | 81% |
The statistics are based on all debt relief seekers with a credit card balance over $0.
Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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