How to Have a Great Holiday on a Limited Budget

a row of empty Christmas stockings

Financial difficulties have far-reaching impacts that can be especially painful during the holiday season. It's understandable why so many people—particularly those with children— push their financial issues to the side during the holiday season and spend like nothing's changed.

Unfortunately, ignoring your financial limitations even for a few short months can have implications that last far into the New Year. But sticking with a budget means that you and your family may have to face some changes and, as we all know, change can be scary.

No one wants to disappointment their children, particularly during the holidays. But pretending that things are just the same as they've always been will often just make things so much worse in the long run.

So how do you tell your children that this holiday season will have to be leaner?  

Set Expectations

Communicate openly with kids about money, in simple terms that they can comprehend. While a young child doesn’t need to know all of the details about your financial situation, they should understand basic benefits of budgeting and saving money.

Don’t forget to talk about all the ways your family is fortunate. The point isn't to shame them for feeling disappointment, but rather to focus on the positives. After all, one secret of financial success is to appreciate the things that you already have (so dust off those old forgotten favorite toys and keepsakes from holidays past!)

Focus on Activities and Creating Memories

When you're a kid, it can be really easy to think that a good holiday begins and ends with a big pile of presents. So in a leaner than normal year, it's important to take the focus off the gifts and on to experiences.

There are a lot of inexpensive ways to celebrate the holidays such as caroling, taking a drive to see your town’s holiday lights, watching a favorite holiday movie, spending time with friends, and volunteering to wrap gifts or participate in other religious or charitable events. Even something as simple as sipping hot cocoa by the fire can make the holidays feel special.

One idea: create an Advent calendar of family events and activities, so that every day you'll something new (and unexpected) to look forward to.

Pick Quality Over Quantity

Many people feel that the number of gifts is important, but that mentality could cause you to waste money on things that won’t last past the New Year. A restricted budget, on the other hand, requires you to make thoughtful choices.

If your family likes to create and exchange wish lists, talk about what each of you wants the most. If you tend to stuff stockings with small, cheap trinkets (because who doesn't love an overflowing stocking?), swap out the little impulse purchases for handmade treats or reclaimed items. Remember that one treasured gift is worth more than five forgettable gifts.

Make Fun the Priority

It's going to an odd, slightly different than normal holiday season, so have fun and lean into the strangeness. If you’re worried that the kids won’t have enough to unwrap, gift wrap needed everyday items like new toothbrushes and slippers. Instead of stacking all the presents under the tree, set up a treasure hunt and make them solve clues to find their hidden presents. Eat candy canes before breakfast. Have a caroling competition. Reenact the best scenes from your favorite holiday movies. Put a Santa hat on the family dog.

Create something unique and memorable, and there's a very good chance that your kids will hardly notice that you're spending less.

Give the Kids a Say

Let the kids decide what the family will have for breakfast Christmas morning or what board game you'll be playing that afternoon. Give them a say in where the decorations go. Giving children control lets them know that you respect their opinions and that is a wonderful gift in and of itself.

Finally, make sure to examine your own attitudes about money and resolve not to feel guilty for not giving your children everything they want. Instead, be proud that you are teaching them a valuable lesson about money management that will benefit them for a lifetime.

If you need some extra help figuring out how to make the most of your money or pay down lingering credit card debt, MMI offers free financial counseling 24/7, online and over the phone. Our experts can help you review your budget and discover ways to save money and accelerate your debt repayment.

Tagged in Christmas, Holidays, Advice for families, Budget tips

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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