Sixteen Strategies for a Frugal and Wonderful Christmas

Like it or not, Christmas is less than six weeks away. If your family is anything like our family, the weeks around Christmas are jam-packed with events with friends and extended family members, wrapping and exchanging and opening gifts, preparing and eating meals, and generally fighting off the winter blues with a huge dose of Christmas cheer.

The problem, of course, is that it can be really expensive. The little expenses during all of this really add up, which can result in some very difficult and stressful moments as the holidays pass through.

I’m not going to argue for or against philosophical changes to the season. Some families I know have certainly taken a very different approach to the holidays, such as giving each other only handmade gifts or restricting all gifts given or received to the $10 limit. Others skip the big Christmas dinner altogether and have a very simple meal.

Instead, I’m going to look at smaller tweaks that anyone can make to their Christmas planning that won’t involve radical changes or sacrifices, but can really add up to significant savings.

Here are sixteen things I’ll be doing over the next six weeks to reduce the financial impact of the holiday season. I’ve sorted them by timeframe, as you can get started on the “before December” strategies right now and then move on to the other ones as the days roll by. Most of these strategies work well for Chanukah planning as well, and some work for other winter holidays celebrated by other cultures.

Before December

Yes, Christmas is weeks away. You might not even want to think about it yet, but a little bit of advance planning right now can save you a bundle of money by the time Christmas passes!

Assemble Your Gift List (If You Haven’t Already)

Ideally, you’ve had this assembled for a while. I usually start with my own list right after the previous Christmas, so my belief is that the earlier you get started, the better.

For me, a Christmas list is composed of more than just a listing of the people I need to buy for. It also includes some brainstorming. I try to come up with several things that the person on my list might like, and I add to that (and remove from that) as the days go by. I usually keep this list in Evernote so that I can access it easily. I also identify a spending cap for each person, which is usually lower than how much I would spend on them “last minute.”

All year long, I watch for sales on any of those items. Early in the year, I’m mostly interested in the “home run” sales – 80% or 90% off sales on things that I know they’d like. Each year, I find a few of them on this type of deep discount.

As the season approaches, I pull back on my desired discounts. Right now, I’m looking for 50% off (or better) sales, a level that will last through Black Friday. After that, I’ll pull back further and, when it gets really close, I’ll bump up the spending cap on each person a little bit so that the big sale items don’t outshine the other gifts.

Let’s say, for example, that I intend to spend $20 on my niece. On my list, I’ll indicate I’m willing to spend $12 on her and then I’ll start looking for the home run discounts. After Black Friday, I’ll bump the dollar amount up to $15 as the sales will become less and less likely.

The most important part, though, isn’t the sales. It’s the brainstorming. Having a bunch of ideas for each person that I’ve actually thought about and I’m sure they’ll like makes shopping much, much easier.

Start Making Gifts

I like receiving homemade Christmas gifts, particularly food ones. I have most of the things that I need, so it turns out that the gifts I enjoy the most are either unexpected surprises or homemade/unique items. I’d rather get a pre-measured soup mix with instructions in a nice jar or a bundle of homemade cookies or a six pack of someone’s homebrewed beer than pretty much anything under $20 or so. It means they put time into the gift – and, to me, that’s worth more than whatever the price tag says.

Each year, then, I try to make some homemade gifts, particularly for the people on my list who will appreciate them. In past years, Sarah and I have made photo cubes,

cookie bundles, ornaments, personalized stationery (probably my favorite, honestly), crocheted items, soup kits, jellies and jams, homebrewed beer, homemade soap, and vanilla extract, among other items. Each of those links goes to a previous post explaining exactly how we made these things and showing exactly how they turned out.

Most homemade gifts require some lead time. You need time to assemble the materials and actually put the items together, so get started now rather than later. Most of the gifts described above can be assembled starting this very weekend.

Schedule Alternate Christmas Celebrations

Holiday travel during the peak periods – the week around Thanksgiving and the three weeks surrounding Christmas and New Years – is incredibly expensive if traveling by air. That’s just the fact. I price-checked some of the flights our family would take if we were flying to see some of our extended family and it was painful. I am very glad we don’t have to fly.

If we did, however, the first thing I’d do is discuss an alternate Christmas gathering plan. Perhaps we could all gather for a weekend in early December instead of at Christmas. This would cut our flying costs roughly in half (based on what I could observe for flights).

This would leave us free to celebrate Christmas at home while also enjoying a family gathering at much lower prices.

Plan Your Travel Outside the Normal Times

If you absolutely can’t get your family to reschedule things, plan some alternate travel. Consider flying on Christmas Day, or take a redeye flight so that you depart very late and arrive in the early morning. The flights during those times are substantially cheaper because people generally don’t want to fly during those times.

If you’re willing to be flexible, though, such flights can save you a bundle. Here’s an example from a few holidays back: a friend of mine worked late on Christmas Eve on the East Coast, caught an extremely cheap and extremely early flight on Christmas Day, and arrived at the family gathering on the West Coast not very long after people started waking up. He claimed to have saved $300 on the flight.

Discuss Alternative Gift Giving

Let’s face it – gift giving can be expensive, but it can also be a valuable touchstone for the holiday season for many people. Given that dilemma, why not plan an alternative gift giving plan?

Agree to make homemade gifts. Agree to gifts that are $10 or less. Agree to give each other non-physical items, such as babysitting services or particular professional skills.

Whatever you decide to do, it will cut back on the financial difficulties of the season while still leaving the door open to thoughtful, memorable gifts.


Thanksgiving is over and the holiday season is upon us! There are countless ways to reduce your spending in the weeks leading up to Christmas without going “cheap.”

Make Your Own Christmas Decorations

Each year, we spend at least a week in early December making countless Christmas decorations for our home. We make snowflakes, trees, pictures, and countless other things and decorate our home with them. All of us get involved in it, as Sarah and I make more complex things like three-dimensional paper snowflakes and the youngest one colors pictures.

Each year, we end up saving a decoration or two that we all particularly liked, usually laminating it so that we can use it over and over again. Some of our decorations are “classics,” in other words.

This costs us perhaps $5 a year in art supplies, mostly paper. It makes our house look different each year, too.

Don’t have children? Try making more challenging things. You can make an amazing 3D paper snowflakes out of a few sheets of paper. You can make an amazing table topper by finding some pinecones in the woods, brushing just a touch of white paint on them, and then arranging them with a string of $0.99 greenery from the craft store. Keep it simple and it has a lot more beauty and impact.

Wrap Gifts Frugally

You don’t need to cover your presents in shiny, expensive wrapping paper. Just don’t. The paper is going to be tossed aside as soon as the package is opened anyway.

Instead, go for minimal wrapping. Wrap your gifts in discount paper, blank newspaper, or whatever else you have on hand. I’ve wrapped gifts in pretty magazine covers before, taking several covers and taping them together to make a “sheet” of paper. For kids, I’ve wrapped gifts in the comic pages from the newspaper.

I’d rather spend $12 on an item and a nickel on the wrapping materials than $10 on an item and $4 on the wrapping materials. Not only does the recipient get a (potentially) better gift, I save money.

Keep Track of All Receipts

Whenever you purchase any gift, save that receipt. Most items that you give as gifts can be returned with the original receipt if needed. Without a receipt, you’re likely returning it for store credit (at best) or stuck trying to sell it on eBay (at worst).

I usually keep a “Christmas” envelope that has all of the receipts from that holiday season in it. As I buy items, I stick a receipt in that envelope (or a note indicating the website I bought it from). That envelope has saved me more than once.

It’s a simple thing that doesn’t cost you a dime but can end up saving you (or your friends or family) a lot of money.

Plan Your Meals

It can actually make a ton of sense to plan out all of your holiday meals a couple weeks in advance. Have some idea of what you’re going to serve to your houseguests for every meal that they’re present, particularly the “big” meals.

The further out you plan, the easier (and cheaper) it all becomes. You can create shopping lists from your detailed meal plans. You can watch for bargains on particular items in the weeks leading up to the big events. You can borrow things like slow cookers to make the meal prep more manageable. It all becomes easier (and cheaper) if you give it plenty of lead time.

At the same time, start researching recipes and other tactics for handling the leftovers that the holiday season often generates. Sure, Thanksgiving is practically synonymous with mountains of leftovers, but many families have pretty big meals at Christmas as well, causing another flood of leftovers. Know what you’re going to do with them – both in terms of storage and in terms of actual meal plans – can turn those leftovers into “free” meals.

The Week Before

The final week – and weekend – before Christmas is upon us. Here are two great ideas for preparing for your big celebrations.

Ship Your Christmas Items

If you’re traveling by air to a holiday destination, ship your gifts and other items in a big box or two and trust UPS to get them there.

For starters, this prevents you from having to pay big fees for each extra piece of luggage you have during air travel. This alone will blow the cost of shipping by UPS out of the water. You can ship a big box via UPS with tons of items in it for far less than it costs to check two bags. You can ship more than just gifts, too – ship most of your clothes!

There’s also the fact that your UPS-shipped items are more likely to arrive at the destination without being lost if you give them plenty of lead time. You’ll also not have to deal with checking luggage when you’re at the airport, which can be an extra hassle both at check-in and when you’re waiting for your bags after the flight. You get to skip all of that.

If I ever fly by air again for Christmas, I am going to ship everything I need to take by UPS… and I’ll ship it all back home, too.

Prep Food Items So You Don’t Rely on Convenience Foods

Most big holiday meals can be a real trick to pull off. It can be really tempting to rely on convenience foods that are both more expensive and less appealing than the real thing.

You can avoid all of that by starting prep a few days in advance. Make as much as you can in the two or three days before the big meal, leaving you only with final assembly and actual cooking on the big day.

This will make your meal cheaper. It will also make your meal tastier and (probably) healthier. It will also make the day itself less stressful.

Christmas Day

It’s the big day! Wait, how can you save money on the big day besides simply executing on your food plans, which we discussed earlier? There are actually a couple of things you can do.

Save Gift Packaging That Has Other Uses

If a gift came in a sturdy box, hang onto that box. We tend to keep a couple dozen boxes of various sizes in our garage all the time so that we can just reuse them for our shipping needs. Christmas can be a treasure trove of those boxes if you keep your eyes open. If we ever have too many boxes to deal with – well, that’s what recycling is for.

We also tend to hold onto wrapping paper. Why? It makes for great firestarter, whether loosely held or tightly compressed. It’s far better than just tossing it into the trash, after all. I save this kind of paper in a box out in the garage, shoved in there waiting for our next campfire.

I’d estimate that about half of the Christmas refuse I see has another genuinely useful purpose.

Save Warranties, Manuals, and Receipts

If you get a new item with a manual or a warranty, hold onto it. We have a cabinet that has nothing but manuals and warranties in it.

Why is this useful? If you can’t figure out why an item is not working, that manual can be invaluable. Sure, sometimes you can find it online, but most of the time it’s just easier to dig through that cabinet with manuals and warranties.

A manual can quite often help you to troubleshoot a seemingly broken device. I recall one toy that my son had that didn’t seem to do anything at all. It would occasionally make an odd noise and that was about it. We tried everything – replacing the batteries, hitting the buttons, and so on, but nothing worked. We were ready to give up on it, but then I dug out the manual. It turns out that the toy had somehow been put in some kind of “debug” mode, so I used the button combination suggested to restart it. Instantly, it works!

The Week After

Isn’t Christmas done at this point? All that should be left is enjoying the new stuff, shuddering at the bills, and eating the leftovers, right? Actually, this is the prime time to take care of a few key things that will save you money later on.

Start Your Gift List for Next Year

You have your list from this year. Just carry over every person from that list to your new list that you still wish to get a gift for. Then, start on that brainstorming process again. What items would that person like as a gift?

The advantage with starting so early is that you have an entire year to shop for bargains. I spend ten months out of the year watching for “going out of business” sales and other huge stock-clearing discounts to find gifts for people.

In my ideal world, most of my Christmas shopping is done when December rolls around.

Buy Next Year’s Supplies

In the days after Christmas, stores put enormous discounts on items like bows, ribbons, wrapping paper, Christmas lights, artificial trees, and other decorations. Take advantage of this and buy the items you’ll need for next year at a deep discount.

All you need to do is stow them away with the other Christmas items as you put them in storage so that you’ll have them in hand next year. We have a few Christmas boxes under the basement stairs – that’s the perfect place for all of this stuff.

I find that December 28th is pretty much the prime day for buying this stuff. The discounts are pretty good on that day, but they haven’t started returning the inventory yet. A few days after that, the inventory is gone.

Save a Dollar (or Two) a Day

Depressed by how much you spent on Christmas? Start saving now for next Christmas. Just save a dollar a day – $7 a week, in other words. Stick it in a savings account and you’ll have about $350 by the time the next holiday shopping season rolls around. Make it $2 a day and you’ll have $700.

You can make this automatic. Most banks will help you set up an automatic transfer from checking to savings each week so that you can have $7 or $14 or $20 a week moved from checking to savings without having to think about it.

Then, when next December rolls around, you have a bunch of cash to spend on gifts without any real negative repercussions on your life.

Final Thoughts

The holiday season can be overwhelming, but if you start working in advance, planning carefully, looking for bargains, and asking yourself what you really need to spend money on, you can cut out a lot of spending without taking even one iota away from your holiday celebrations.

Get started now with whatever preparations you need to make for whatever celebrations you’ll have this holiday season. Your wallet will thank you.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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