Christmas Shopping That Won’t Break the Bank

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It’s easy to save money on Christmas shopping with a little bit of creativity and planning. Here are some tips to help you out.

It may only be September, but now is exactly the right time to be thinking about your Christmas shopping and holiday gift lists. By starting early, there is much money to be saved on your gift-giving. For years, it was a given in our family that Christmas gifts would have to be purchased via credit card.

With an already tight budget, it simply seemed there was no other option. But for the last couple of years (even before our epiphany that we should probably get out of debt), we’ve changed things up by finding ways to pay for our Christmas shopping with cash and to be more resourceful about how we purchase those gifts. We’ve also found ways to make extra money before the holidays so as to help stretch our budget. Here are some ways for you to make Christmas gift-giving a great deal for you and for your gift recipients.

1. Start your Christmas Shopping Savings Account Now


Many banks and/or credit unions still have some type of Christmas Club savings account.

If your bank doesn’t, a regular savings account or an envelope at home will still accomplish the same goal.  Just make sure you know the terms and conditions of your particular account. By setting aside a pre-determined amount of cash from each paycheck now (divide the amount you usually spend on gifts by 2 months so that you are cash-ready by mid-November), you’ll have plenty of cash available so that Christmas shopping doesn’t strain your budget or your nerves.

Some people even divide their Christmas gift budget by 12, so that they’ve got a full 12 months to prepare for the plethora of gift-giving cash that gets spent.  The important thing is that you prepare in advance, not waiting until the last minute to figure out where the gift money will come from.

2. Hit the Clearance Racks


Now is a great time to shop for summer clothes for next summer, or for gear for the summer sports enthusiast on your Christmas shopping list. It’s also a great time to hit garage sales and/or consignment/thrift stores and get great deals on good quality new or used equipment that’s suitable for gift-giving.

Make sure though, when your Christmas shopping includes browsing pre-owned items, that you make wise decisions with your frugality. For instance, a great deal on a used toy in good shape may be fine for your 3-year-old, but your brother may not appreciate it for your niece or nephew. It’s important to practice good gift-giving standards. If you like to shop on Amazon to save money, check out my hacks to save money on Amazon this Christmas to maximize your savings.

In addition to hitting the clearance racks, you can also get cash back after making purchases on Amazon, plus other sites. If you like to shop online, using a shopping portal like Ebates or Swagbucks gets you up to 7% cash back on many purchases, plus they give you $5 cash when you open an account.

3. Give of Your Time/Talents


Every Christmas, I give my stepdad gift certificates for haircuts throughout the year. I get to utilize my haircutting skills from my days as a licensed cosmetologist, I get to give him a gift without spending any cash, and my stepdad gets to save money on something he hates paying for.

It’s a win-win for both of us.  Another idea is to give a niece, nephew, grandchild or even your own child a gift certificate to spend the day together. You can then spend that time going to a park, bike riding, or numerous other things that are light on the pocketbook but full of great memories.

4.  Have a Plan and Keep an Eye Out


Be organized about your Christmas shopping; write down who you need to buy for, and how much you’ll spend on each person. Then, stick to that number.  Make a commitment to yourself that you won’t go over budget. If you start shopping early, you’ll be able to get a lot more for that budget number too.

I just got flip-flops for our youngest three kids (shhh!) for $1.18 a pair on the clearance rack. Score! It’s a gift that they need, but it doesn’t take much at all out of our pre-set Christmas gift budget, so it leaves more money for other gifts – a much needed blessing on a tight budget.

It’s easy to save money on Christmas shopping with a little bit of creativity and planning. Here are some tips to help you out.

5. Look for Ways to Save on other Christmas Expenses


Does your family always go out to eat for Christmas? Maybe you or someone else in your family could host a potluck instead. Have to travel to see family? How about driving or taking the bus instead of flying?  Or maybe you could fly out to see family after the holidays and get a cheaper ticket price.  Knowing the best tips for getting the cheapest flights can save you hundreds of dollars.

Christmas shopping doesn’t have to put a dent in your budget, and it doesn’t have to be a stressful event.  With a little planning and preparation, it can even be fun.  🙂


How do you save money on holiday or gift  shopping?


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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

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  • DC @ Young Adult Money says:

    Oh boy it’s about that time isn’t it? I think planning ahead is key, especially if you exchange gifts with a lot of people. Set a budget and stick to it! If you start looking for gifts now you can be patient and wait for the items on your list to be discounted. Great tips, Laurie!

  • Laurie @thefrugalfarmer says:

    So true, DC! Since we’ve started shopping early for Christmas presents, it’s so much more enjoyable, and we get great deals!

  • Froogalist @ says:

    You have made some good points here (though it was rather shocking to wake up to a post about Christmas shopping this morning).

    Giving of your time/talents is also a great way to make a gift very personal (which for me, at least, are the most meaningful and cherished gifts to receive). My mother is a terrific knitter, for example, and she has customized a lot of knitwear for my daughter based upon my daughters interests (e.g. ladybugs, butterflies, etc.).

    Having a plan is also very important. Make a budget and stick to it; this way you can spend without guilt or fear of January’s upcoming credit card bill.

    • Laurie @thefrugalfarmer says:

      Great reminder, Froogalist! We love homemade gifts too. My mom made me a doll one year (long after I was grown) that is a cherished gift to this day. If you have talents in this area, it’s a great way not only to save money on gifts, but to give a gift from the heart.

  • kelly @stayingonbudget says:

    Yes, the earlier you plan, the better! Christmas is always December 25th–but it always sneaks up without a plan.

  • Matt Becker says:

    I’m terrible at shopping ahead but I think having a dedicated savings account is really the best idea. We actually have a general “gifts” account that we put money into every single month, and all of our spending on gifts throughout the years comes out of that account. It both makes sure that we have the cash available and it sets a limit on what we spend based on a conscious budgeting decision.

    • Laurie @thefrugalfarmer says:

      That’s a great plan, Matt. I know having money set aside for gifts has made shopping SO much easier for us – no more stress over worrying about spending at Christmas time – the budget is set and the money is there.

  • Pauline says:

    You are early Laurie! I save by doing the gift or doing a nice card myself, cards are really expensive! I also am not usually with my family on Christmas so I can buy stuff during the sales and then give them later 🙂

    • Chantal says:

      Many years ago my husband’s family agreed to my suggestion that we only give gifts to children. Everyone gave a big sigh of relief; it is an enormous family! Now we all give a single check to our favorite charities–no one knows who gives what or where to = honor system.

      My family now consists only of my daughter and her two children and husband and a sister in England and two nieces in Australia, with a great nephew out there also.. I send her American candies she enjoys (Hershey’s kisses and others) and she sends me a yearly pocket diary (England excels in these) The child gets an “American” present.

      My husband and I now eat out at our favorite, expensive, Christmas brunch buffet. This is our present to each other. We are retired and although we still decorate our house and have a small, real tree we don’t need the hassle of the whole cookery bit. We do often have guests at Christmas, staying for a few days, but they know they will be looking after themselves most of the time. Twice our college student nephew came down from Boston (he lives too far way to make it home) and he actually cooked the full Christmas Dinner both occasions–lovely young man.

      Christmas cards are bought in the post Christmas sales each year, except for a handful which I design and paint myself. The ones waiting ready to be sent cost all of $6.50 for 80 + cards. We both write a long letter to be enclosed with those of our friends and family members we are not otherwise in touch with. Not one of those dreadful round robin letters either. I have 9 such personal letters to write and am already started.

      We don’t think of Christmas as a spending time at all. Writing this email I realize we are pretty structured, although I wouldn’t have thought so off the top of my head.

      • Laurie @thefrugalfarmer says:

        Boy, you’ve really got this down to a science, Chantal! I love the idea of a nice Christmas brunch for you and your husband, and your gift giving plan sounds wonderfully fun and frugal at the same time. Thanks for sharing your tips. 🙂

    • Laurie @thefrugalfarmer says:

      That’s a great idea, Pauline! Homemade cards are my favorite. And with you giving your gifts after Christmas, you can hit the clearance sales; score!

  • Holly@ClubThrifty says:

    Great tips, Laurie!

    I buy some of my kid’s Christmas presents at garage sales and keep them stashed away until Christmas. I also get some of their presents off of craigslist.

    • Laurie @thefrugalfarmer says:

      That’s a great idea, Holly. There’s SO much money to be saved that way, and kids in general really are very happy with their gifts either way.

  • Stefanie @ The Broke and Beautiful Life says:

    I break every paycheck into percentages and deposit each percentage into a different “account”. One is the “giving account”. I pay into it all year and take out whenever I give a gift (weddings, birthdays, mother’s day, donations, etc) Luckily, Christmas is at the end of the year so I know exactly what my budget will be (whatever is in my account…or less). I put in 5% of each paycheck to the giving account, but even putting aside 1 or 2 percent can add up over the course of a year.

    • Laurie @thefrugalfarmer says:

      Love that idea about the percentages, Stefanie. What a great way to have a plan and stick to it; thanks for sharing your wisdom. 🙂

  • Mike Collins says:

    We’ve already got a few Christmas presents hidden away in the attic. We’re always on the lookout and when we see a sale that’s too good to be true we grab it.

    • Laurie @thefrugalfarmer says:

      We do the same thing, Mike. It saves a ton of cash, and helps so that we’re not making last minute purchases too.

  • Daisy @ Prairie Eco Thrifter says:

    I cannot believe Christmas is only 4 months away (less than! AHHH!). I haven’t started a savings account for it yet, because November is a 3 paycheque month so I’m going to use that (and thus, that will be my budget!).

    • Laurie @thefrugalfarmer says:

      We do something similar, Daisy. We put aside one of Rick’s extra checks (he gets paid every two weeks) and use that for gift giving. It’s a great relief on the budget!

  • J.R. (CNA Finance) says:

    The truth is, I don’t save for holiday shopping, I just save. I use to make my money grow and when something happens that I need money for, I just take it out and use it. It’s rare that I need to tap into my investments though.

  • MonicaOnMoney says:

    John- This is very timely for me because I JUST started thining about Christmas shopping. I can’t believe that it’s already September!!

    I hate last minute shopping and stress so I always shop online at Amazon during their amazing Black Friday Deals. I don’t like waiting in line for hours for the in-store deals and many of them are online for the same price!

    Another way to save money is to buy what friends and family really want (it it’s in your price range). Get to know what they want instead of buying something just to buy something.

    • Laurie @thefrugalfarmer says:

      That’s a great point, Monica. When my mom asks us what we want, we always give her a “needs” list to cut down on other spending during the year.

  • Michelle says:

    I love Christmas, and I am so happy that it’s getting closer and closer. I’m one of those people who is perfectly happy that Christmas stuff will be in the stores soon 🙂

    I haven’t started shopping yet, but I should make a list soon!

  • Andrew@LivingRichCheaply says:

    Wow…time flies. We only have a few months to go before the end of the year. When I saw Christmas in the title, I thought it was a repost from last year! But you’re right, it’s a good time to start thinking and planning…by budgeting and buying things that are a good price. I don’t really have too many presents to buy…just my wife and I give my parents cash (they are too hard to shop for and prefer it this way). Though I’m sure my wife will want to get something for our little one for his first Christmas.

    • Laurie @thefrugalfarmer says:

      Yes, Andrew, now that you’ve got a child, Christmas will take on a whole different meaning, meaning MONEY. 🙂 Kidding, of course, but as little ones get older, it can be difficult sometimes to not want to buy them lots. I agree too, Andrew, that time has flown by this year!

  • anna says:

    Great tips, Laurie, especially with hitting the clearance racks now – I tend to buy post-season since I don’t like paying retail. I usually just bake goods for loved ones and send them out, but have also gotten into the cycle of buying Christmas wraps/cards during the after-Xmas sales to use for the following year since I’m such a sucker for pretty wraps and shiny bows. 😉

    • Laurie @thefrugalfarmer says:

      Love the idea of doing baked goods for loved ones! In fact, with us learning how to can, we may just give out some home canned salsa if it tastes any good. 🙂 I pick up the wrap and bows after Christmas too; you just can’t beat that deal!

  • Shannon @ The Heavy Purse says:

    It seems early to be talking about Christmas but it will be here before you know it. And starting to save now for all this gifts is smart. Because kids are notorious for asking for things then not really wanting them once they get them, we have the girls make a huge list then weed it down by comparing items against one another. You can have this toy but not this one – which one would rather have until they have chosen about 10 toys. This is the list we share with family who buy them presents. This way they are (hopefully) spending their money on something they girls actually want. I hate wasting money so it really bothers me when I see toys case aside, knowing that we or whomever bought the toys could have used that money on other things.

    • Laurie @thefrugalfarmer says:

      Love that idea, Shannon! I agree about the wasting money on toys that get played with for 2 seconds and then disregarded. It’s so frustrating, and a plan like yours would largely eliminate that problem, I would imagine. Thanks for sharing your tips!

  • Debt Blag says:

    Interesting. I really try to limit my gifts. For all except my closest relatives, we’ve moved to gift circles, where you only have to buy for one person… After all, the cheapest gift is the one you *don’t* buy

    • Laurie @thefrugalfarmer says:

      More and more people are paring down, it seems, and that really does work well for a lot of families, including ours. We only do for nieces and nephews now, and it really does make things so much less stressful, doesn’t it? Thanks, Mario. 🙂

  • Mackenzie says:

    Starting early with Christmas shopping is key! I usually start my shopping during the summer. I’m a little late this year in starting, though 😉

    • Laurie @thefrugalfarmer says:

      Wow, that’s great, Mackenzie! We started last month, which is a little early for us, but I am loving that we’ve already got some stuff done!

  • E.M. says:

    I would love to start planning exactly what I’m going to buy for who now, but if I asked anyone in my family they would say it’s too early for them to know what they want. I might just try getting little things here and there when I see something I think they’ll like, but generally I like to get people things they need. I think I may go with the “it’s nice to just spend family time together” this year, since my parents will be visiting.

    • Laurie @thefrugalfarmer says:

      That happens sometimes with families, but just knowing you’ve got the money for the gifts set aside, even if you can’t buy them right now, is a great way to get as much planning done as possible. 🙂

  • Andy | Income by Example says:

    A gift I like to give to a significant other is tickets to an event, comedy show, etc. Doesn’t look like a way to save money, but in reality you give a gift for xmas while paying for a date all in one. If you got them a gift for them to keep like jewelry, you will have to pay for that AND a date coming up anyway. Why not kill 2 birds with one stone?

    • Laurie @thefrugalfarmer says:

      LOL, love that, Andy! Way to multi-task! Seriously, though, with a gift like that, they’ll have the great memory of the time spent together too. Wonderful idea. 🙂

  • Kyle | says:

    Love these tips Laurie. By buying gifts all year long as we find them on sale, I can honestly say that my wife and I have saved at least a $1000 over the past 15 years. Love the idea of giving time or talents as well.

  • Tanya @ Eat Laugh Purr says:

    Great tips, Laurie. After I moving to California from Minnesota, I rely heavily on Amazon. Often they run amazing sales on toys and for 2 nephews and 1 niece I spend more than $25 so I can get free shipping too. I ship everything to my parents home so that way I don’t have to lug anything on the plane. I also reevaluated the amount of money I was spending at Christmas too. I enjoy finding the “perfect” gift but I realized that I was spending more than I truly needed to. So I cut back and nobody complained or died. 🙂 I wasn’t branded a bad daughter, sister, aunt or friend either. LOL!

    • Laurie @thefrugalfarmer says:

      Isn’t that great, Tanya? You’re lucky that your family doesn’t put stock in the price of the gift, but instead of the love that’s behind it, because really, that’s what matters. 🙂

  • Christine Weadick says:

    I have started shopping…. the local bookstore closed the end of August and, much as I will miss visiting with Katie and Pudd, the biblio-cat, I did scoop a couple of books on clearance. I listen all year making mental notes on who would like what, the kids give me wish lists in November that I keep for birthdays the following year and because I always have a pretty good idea who wants what I can watch the sales year round and grab something good on sale. One year we were fixing up the house and hubby complained about how he would love one of those tool belts but they were SO expensive!!! I found one on sale in July and hid it until Christmas. I used to work retail and the last place I want to be is in a store in Dec!!! I also do a fair bit of baking, when the kids were in grade school the teachers all got a plate of home made goodies… I’ve talked to a couple since and they still remember those plates fondly…I still give baking as a gift. Back when the kids were small Canadian Tire stores here in Canada would have the toys as well as decorations on half price the day after Christmas….. I scored birthday gifts for the kids then….. Christmas shopping is not as painful if it’s spread out over a longer time frame, but if I have to do any shopping in Dec., I will have lists, by store and recipient in hand and I will be blowing through the stores as fast as I can find what I want and pay for it…….. Smart move is to not get in my way…….

    • Laurie @thefrugalfarmer says:

      LOL, I love your organized and thorough approach, Christine! You sound like me regarding the shopping in December, which is why I work so hard to have it done by Thanksgiving; for the sake of fellow shoppers. 🙂 Seriously, though, thanks much for all of the great tips – very helpful!

  • Kim@Eyesonthedollar says:

    We’ve been on the lookout for a bike for our daughter. I barely missed one on the local parent swap page on Facebook, but I’ll keep trying. I may be a scrooge, but I am so over adult gifts. Getting someone something because you think they will get you something just wears me out. I told my family a few years ago that I was only buying stuff for kids. My sister was on board, but my Mom and Dad still get stuff for everyone. I usually give them pictures. My inlaws still like gifts, and they aren’t my blood, so I can’t call that one off as easy. We usually just exchange gift cards. I would like it so much better if we just all donated $20 to a good cause, but that’s just me.

    • Laurie @thefrugalfarmer says:

      It seems more and more are going that route, Kim, of doing gifts just for the kids. That in and of itself is a huge money saver, and I love the idea of donating to a charity of choice. What a great way to make a difference!

  • Marissa@Thirtysixmonths says:

    Christmas is indeed just around the corner! Time flies so fast. I need to keep up. Like right now.

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