How to Have a Meaningful Christmas on a Budget with Young Kids

If the thought of Christmas on a budget fills you with Grinch-like tendencies, don’t fear! I’m here to tell you that you CAN have a beautiful, meaningful Christmas with your family while sticking to a budget. Yes, even a tight one! And yes, even with young kids!

Our family has never been the “deck the halls with extravagance” kind of family, but some years we’ve needed to be more mindful of our expenses than others.

This year is one of those years.

As I’m sure you know if you’re reading this, the rising cost of living has put many households under financial strain. For our family, we’ve had a few added layers of change this year: we welcomed a new baby, moved internationally, and my husband changed careers, which also meant a significant decrease in our annual income.

So when I say that we’re keeping Christmas on a budget this year, I really do mean a pretty small budget.

But I’ve long believed—and tried to live out in our family—that meaningfulness and intentionality aren’t tied to the cost of something. The joy of Christmas is by no means correlated with how much money we spend.

Of course, there are some things that will require money. But overall, I’m choosing to lean into the opportunity for creativity and the challenge of making a meaningful Christmas on a budget happen in our home.

Because when my children to look back on this Christmas, I want them to remember the things we did, not the things they got. How we implemented our favorite family traditions, despite living in a new country and a new hemisphere. How we spent time together doing the things we love doing at Christmas. And how we journeyed through Advent together and celebrated BIG during Christmas Tide.

My hope is that, even on a smaller budget, we can create a Christmas that leaves all of us looking back and thinking, “That was one of the best Christmases.”

My Strategy for Keeping Christmas on a Budget

So, how exactly do I plan to pull off a fun, memorable Christmas on a budget? My strategy is actually pretty simple:

Decide in advance what matters most. Spend intentionally on those things. And then get creative with everything else.

I’m not trying to make Christmas a cheap as humanly possible. But I’m also not going to make a purchase just because it is Christmas and I feel like I “should.”

What I’m planning to do is look at our family’s Christmas as a whole and ask myself, “What actually makes Christmas feel special to us?”

There will be a few things that are worth spending money on. And there will be plenty of things that either don’t need to cost much (if anything) at all, or that we’ll opt to skip this year.

My goal isn’t to create a Christmas season that looks impressive to anyone from the outside. What I’m shooting for is to make Christmas feel meaningful, joyful, and special for our family, without spending money that we don’t have.

And with young children especially, I think we have a lot more freedom to do this than we even realize!

Start with the Christmas You Want to Have

Before I buy anything, I’m stopping and thinking about what actually matters to our family.

Every family has their own unique traditions or desires. I’ve written about our family Christmas traditions elsewhere, and they have evolved a little over the years, but in general, the things that really matter to our family at Christmas include:

• Playing Christmas music
• Doing something to observe advent and the 12 days of Christmas tide
• Opening some kind of gifts
• Eating certain food (cheese fondue is a specific menu item, along with something cinnamon-y for Christmas breakfast)
• Putting up a few decorations (and I do mean, an absolute minimum amount!)
• Spending time together as a family, particularly outside

Fortunately, none of these Christmas traditions HAVE to be expensive investments!

If you are facing Christmas on a budget, I encourage you to take a few minutes to think about what are the 4-6 things that make Christmas feel like Christmas for your family. What is the thing that makes it really feel like Christmas is officially starting?

A lot of the time, you’ll find you can achieve the “Christmas feeling” inexpensively with a little creativity.

Let Your Young Children’s Interests Guide Your Plans

If your kids are anything like my kids, they do like to receive Christmas gifts. In fact, my oldest two children started presenting me with their Christmas wish-list in October this year, eager to let me know what new toys or clothing items they’d like to receive for Christmas.

I will plan to spend some money on Christmas gifts, but I also tried to look at those lists creatively to see how I could save money.

For example, none of my kids asked for an expensive steam train ride that is popular in our area. None of them requested going to “The Nutcracker” or any special ticket-required show.

Instead, what their lists included were things like, “Things for the doll kingdom,” “My own tallow balm,” and “New Underwear and Dresses.”

Now, I realize my children might be a bit unique, in some ways, but truly, I don’t think kids need as much of a “to-do” as we might want to accomplish for them.

I’d love to take my kids to see the Christmas lights that are put up at our local zoo, but they haven’t even expressed an interest.

So instead, I can let my children take the lead. From their lists, I can tell that receiving SOME gifts is going to be important to them. I also will prioritize making some memories with them as a family, but I don’t need to break the bank trying to give them an assortment of costly Christmas events if that isn’t actually of interest to them this year.

Spend Your Money on What Matters

This is where I’m getting REALLY intentional about how to navigate our Christmas on a budget.

First, we decide how to allocate our Christmas fund. My husband and I set money aside throughout the year, so by the time Christmas approaches, we know what we have available to spend.

Since food is one of the most important elements of Christmas for us, I like to allocate a certain dollar amount of our Christmas budget to go toward food.

For us, since we like to have cheese fondue as a special meal leading up to Christmas, and that requires some speciality cheeses, I plan to budget enough to cover the cheeses from our Christmas fund.

Second, our family also likes to give gifts, so we allocate a certain amount of our Christmas budget to be for giving gifts to other family members or friends who feel like family. I make up a list of who I’d like to give a Christmas gift to this year, and then I think through how much I want to spend on the gifts I plan to give to family or friends.

This year, I’m leaning into homemade gifts: vanilla (our most expensive gift), beef tallow balm, fabric buntings, plum butter, and homemade bread. The vanilla requires a bit of upfront investment in bottles, alcohol, and vanilla beans, but the other gifts cost relatively little to make. We’ll bundle these as family or household gifts, with each bundle costing us around $14.

Finally, what is left of our allocated Christmas budget, I put toward gifts for our children. The gifts I give our kids will be a combination of some individual gifts, as well as family-group gifts.

I love to dream up gift ideas all year long, and I keep my ideas in a running list on the notes app of my phone. I won’t be able to buy all the gifts I’ve thought of, but I will be able to prioritize 2-3 for each person, and then I’ll get creative to see if I can make some homemade gifts for each person that they will enjoy.

Let Everything Else be Simple to Keep Your Christmas on a Budget

Once you’ve decided where your Christmas budget will go, you can get creative with everything else. This is where simplicity really shines!

Here are a few ways our family is keeping things simple this year:

Rather than attending an expensive Christmas show or event, we’ll find a neighborhood with beautiful Christmas lights. I’ll make hot tea or cocoa, pop some popcorn, pack everything into thermoses and bags, and we’ll spend an evening walking together and enjoying the free displays.

We’ll also embrace simple decorations. We may harvest a tree from my parents’ property, or make a paper tree to hang on the wall. Paper chains, homemade buntings, and evergreen branches collected outdoors can make our home feel festive without a big decorating budget. And my kids will enjoy participating in these kid-friendly activities, too.

And when it comes to gifts, I’ll follow my usual minimalist approach to wrapping. Rather than purchasing matching wrapping paper and bows, I’ll use paper bags or fabric I already have, along with jute twine and natural materials (likely collected by my decorating-loving kids) to dress up the gifts.

These are just a few examples of how we’re approaching Christmas this year. The goal isn’t to make every part of the season free, or to avoid spending money altogether. It’s to recognize that we don’t have to spend money on everything to make Christmas feel special.

Sometimes, the simplest ideas are the ones our children enjoy the most.

When You Need to Cut Costs to Keep Your Christmas on a Budget:

If you need some specific ideas for how to keep your spending in-check with free or inexpensive ideas for celebrating Christmas without breaking the bank, I’ve created a simple PDF guide: 10 Tips for Cutting the Cost of Christmas.

In it, I cover ideas for free family memory making, how to decorate for the holidays for free or almost free, and inexpensive swaps you can make to stay within your budget. You can get it below:

A Meaningful Christmas Doesn’t Have to Be an Expensive Christmas

At its heart, Christmas is about celebrating the birth of Jesus—God coming to dwell among us, demonstrating His love for us, and making a way for us to be reconciled to Him.

While it’s wonderful to enjoy special gifts, meals, and traditions as we celebrate, Christmas doesn’t have to become a burden on our budgets or something we go into debt to accomplish.

This year, our family’s Christmas may look a little different than it has in the past. But I’m choosing to see that as an opportunity to be creative, to focus on what matters most to us, and to be content with what we have.

Because I don’t want my children to remember Christmas by how much we spent. I want them to remember the traditions we shared, the food we enjoyed, the songs we sang, and the time we spent together as a family.

With a little intentionality and creativity, you can create a beautiful, meaningful Christmas for your family without spending beyond your means.

You don’t have to give your children an extravagant Christmas to give them a Christmas worth remembering.

Let me know in the comments below if you’ll be keeping Christmas on a budget this year! I’d love to hear what your plan is and if this post has been helpful!