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How We Save Hundreds of Dollars on Christmas Gifts

Guest post by Steph from The Cheapskate Cook

When my husband and I got married, we lived in a renovated shed and had a budget that matched. I was an avid Money Saving Mom® reader, and although we’ve moved out of the shed and added two kids to our family, I’m still learning how to save money… and I’m still an avid Money Saving Mom® reader.

Over the years on tight budgets, we’ve learned a lot about celebrating the holidays on a shoestring. Here are a few things that have worked for us:

1. Use a system for family gifts

We celebrate Christmas morning with my parents and siblings, and as the kids have grown up, started school, gotten jobs, or struggled to get jobs, we decided that instead of everyone getting gifts for everyone else, we would draw names.

We also pitch in to fill the stockings, so each person gets a larger gift for one person and a small stocking stuffer for each family member. That way we can enjoy shopping for each person but don’t have the pressure of buying large gifts for everyone.

2. Don’t feel like you need to buy gifts for everyone

For most years, Chris and I just decided not to get each other gifts. It was a tradition to travel to see family over the holidays, and so making the arrangements to do that was our gift to each other. And surprisingly, when we were surrounded by people we loved on Christmas morning and we knew we were intentional about making that happen, the gifts weren’t missed. (Although I admit the other gifts from family certainly helped!)

We’ve also been selective about gifts for our friends and general acquaintances.  Some years, it was wiser to not give those kinds of gifts. However, gifts like fresh bread (I love this Very-Little-Bother-Bread recipe) and honey butter can be fun, frugal, and even a welcome alternative to the cookies so many people have in abundance.

3. Host a cookie exchange or white elephant party

Invite several friends over for an evening of coffee, hot chocolate, and treats. For the cookie exchange party, each family brings a small plate of cookies and little bags filled with 2-4 cookies to add to the exchange. When guests leave, they grab a few bags of cookies to take home.

The white elephant party is a classic. Instead of purchasing a gift, wrap something you already have at home. Then each person chooses from the pile of gifts, and you never know what you’ll end up with.

4. Remember the point to all of this

Giving gifts is fun, and someday, if we continue to use our money wisely, we’ll be able to give even better gifts. But ultimately, this season isn’t just about that, as wonderful as generosity is.

It’s about remembering and celebrating the One who gave us the best gifts: the gift of a relationship with Him and the gift of salvation. And we can do that no matter what our budget is.

When Steph and her husband got married, they lived in a renovated shed and had a grocery budget that matched. As a passionate whole-foodie, Steph was determined to continue eating healthy, minimally-processed foods on their shoestring budget. So The Cheapskate Cook was born.

Photo Credit

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  • B says:

    We don’t swap gifts either. We make decisions on how to spend our money together whether it is a trip or something fun to do so we don’t feel the need to swap gifts for Christmas or our birthdays. However, I have a large family where the immediate and extended families get together each Christmas. Unfortunately, there is an “unofficial” expectations that you bring a gift for each person. With 20-30 people attending, it can really get out of hand, and while I use to try and by after Christmas sales and store up for the next year I eventually came to resent the idea of buying all these things with money that could go towards a bigger Christmas for my children or to pay off our home, etc. It isn’t that I don’t care about these people, but I see that everyone tries to have an expectation that is unrealistic. I tried to encourage them to draw names for children and adults, but they refused. As a result, we just quit attending the function. And, now it seems that more and more we don’t get together and I feel that my children are missing out on building relationships with their cousins. But, I am at a loss of what to do. Even a $5 gift for 30 people would run you $150, and what is the chance you could find that kind of deal for everyone?

    • Amy Zuck says:

      Have you thought about giving a family gift? One year I made gift baskets for the family with homemade mixes (biscuit, cookies, or brownies, jam etc.). I also thought about doing a “game” gift for each family since we like playing games. Maybe a board game and some treats (you could even buy treats in bulk and bag them with a nice ribbon or something). My husband and I both have somewhat big families (his does pick, but mine some people are starting to pick names finally yes!) So I feel your pain : /

      • B says:

        I have made “food” type gifts to share. I also love the mixes you get with the mason jars. I had thought about making some of those up and giving them at least to the families.


    • Meg says:

      You know what? I think you should go!
      If you want to bring a homemade basket of goodies for each family, do so.

      If someone says something, say honestly, “We just can’t afford to give gifts to everyone, but I don’t want the kids to miss out on knowing their cousins.”

      If they judge you, then maybe the relationships aren’t worth preserving, But I’m guessing there will be at least some in the group in a similar boat who will feel relieved, and I have to believe that they would all rather have your presence than your presents.

      Take care!!

    • Lara says:

      So sorry that you felt you had to stop attending. I agree with the idea of the family gift. It would work well, and if you personalize it to each family (one loves chocolate, and another has this thing about cinnamon) You could have fun all year looking for recipe ideas…. It doesn’t have to be all food either… is there something that you or your family can do better than others?? My hubby is really good at cars, so he can ‘gift’ an oil change, or x hours working on a car….

      Don’t miss out on the family time. I come from a small family, and I am not close to my one and only cousin. My second cousins are a bit closer, but other than email, we don’t have too much contact any longer. DH is from a larger family, but he isn’t close to anyone there. As a result, our kids miss out on cousins… cause we just don’t see his family. Even without gifts, if you have to, attend.

    • Heather says:

      You can go, but send out the message ahead of time that you won’t be buying gifts for everyone, but will be bringing food to share, and that you don’t want others to give you gifts either. All expressed graciously, of course.
      And don’t feel that you have to explain your reasons either. Sometimes too much explanation opens the door for others to argue you down.

  • I completely understand the obligation to buy for many people, most of whom have a very different financial situation than yours. But I do think that if you are creative and look for amazing deals all year, you can buy for everyone for about $5. For example, the Target coffee deal this week gets you 3 bags of expensive coffee for less than $3.50 each! A few days ago I ordered 3 pairs of earrings for gifts that were Free on just paid $2 each for shipping! I know it can be hard but I hate to hear you say you feel relationships are suffering bc of this. That’s sad!

  • Sharon says:

    One of the ways we’ve found to save quite a bit on our Christmas budget for others (it’s ironic since we only by our children three presents eash–a toy, a book, a game/puzzle) is to have a theme. One year we did a GAMES theme and everyone on our list got a game–board game, card game, party game. If it was an entire family, we bought a game the whole family could play together. Another year, we did a BOOK theme (a favorite of ours). Everyone got a book–cookbook, craft books, children’s book, etc. We went to thrift stores and garage sales, used book stores and hunted on-line. The gifts were personal and special because they were “handpicked” and really didn’t cost more than a $2 a piece. For instance, the deal from last week for 10 chilren’s book for $14.99. That could be a gift for 10 different children–$1.50 each, not bad at all. (And they were classics so more the better).

    Anyway, for us, the themes have worked very well and helped us stay in budget.

    • Sharon, themes sound like a really fun idea!!! Sounds like it would keep everything simple and organized too. I thought of giving family members games this year – got any suggestions from when you did it?

      • Jenna says:

        This is actually what we are doing this year. For families with younger kids, we purchase Memory or Candyland. Families with school aged children will get Uno. Couples or families with older children are getting Apple to Apples travel cards, or Would you Rather? game.

        • Great suggestions, Jenna! Thanks!

          • Sharon says:

            We liked “Catch Phrase” for families with older kids. Also, “Imagine If . . .,” and “Apples to Apples.” Another one others seem to like quite a bit is “Settlers of Cataan.” I *think* that’s spelled correctly. It’s a strategy game (people who like Risk really like it).

            For card games, “Target” was a good one.

            Also, oldies-but-goodies, like “Sequence” and “Yatzee”–which kids can play too.

            You can get junior versions of many, many games these days to accomodate younger children. The previous person gave you some great suggestions for younger kids too.

            It’s also fun just to head to and look through the games. Find something different and interesting that looks like fun. Make sure to read the reviews as that will help you lots when choosing. If you get something out of the ordinary, you can pretty much assume no one has it.

            The year we did this, we also made up fun little gift tags on the computer with a picture of our family on it and a little poem about playing games (I don’t have the poem anymore though).

  • Michelle says:

    B- we’ve been there too. There have been years where I was the only one not bringing gifts, because I simply couldnt, and I simply couldnt let it bother me (too much, anyways). We are in a better place now, so when we attend large family functions, instead of purchasing little trinkets for each individual and/or child, we buy “family gifts” that will service an entire family. We’ve gotten board games, snow cone makers, movies, gift cards (from, etc. – anything that will be appreciated by an entire family.

    • B says:

      Thanks for the ideas. My heart’s desire is to spend time with my family and extended family just counting our blessings, eating, fellowshipping, and not worrying about all the gift giving. I even wish maybe they would just buy for the children. Another thing I use to do is make lots of goodies such as cakes, cookies, candies, etc and divide them up into nice containers to give. I am not sure how well received even though alot of time and heart when into it.

    • We’ve received gift cards. They’re usually to unique places I never would’ve tried, but I’m always really happy with the restaurant. Our gift cards were just a sheet of printed paper – are there any more “gift looking” options on

  • I love the bread idea! You’re so right that it’s a good switch from cookies.

    We’ve tried a lot of money saving ideas over the years, and I’m grateful our extended family is willing to mix it up! Some things we’ve tried:
    1. A homemade Christmas – each and every gift made by hand. I gave families sets of frozen dinners and cinnamon rolls.
    2. Set a limit – $50 for the whole family. Everyone was VERY creative with how they stretched the funds.
    3. Purchase a family photo package. We have excellent photographers in our area; we hired one to come do extended family photos.
    4. Give back. We made plans one year to spend the day baking together. When we finished, we took cookies to our local police and fire stations to say thanks. As our gift to each other, we purchased livestock through a charitable organization’s Christmas gift catalog… because nothing says Christmas quite like cattle lowing. 😉

    • Haha, I’ve done that charitable catalog gift before. It’s pretty fun, but I wonder if it’s more fun for me to do than for the person who receives it. I’m wondering if maybe when our kids get older we can have them pick out something from that catalog for us to give instead of them getting another gift from me and my husband. Thoughts? You think that might be fun?

      • Amanda says:

        I agree; we’ve set a budget for the gift catalog and are cutting out pictures of every item within that budget to create a collage. The collage will go inside of our daughter’s stocking for her to pick something out Christmas morning. As she grows, we’ll probably nix the collage and help her identify items that fall within the budget from the whole catalog… lots of great lessons! 🙂 We’re using Gospel for Asia’s catalog– it’s awesome.

  • L says:

    I wish other EXTENDED family members would understand to NOT spend, especially as we all get older. There are so many people that have nothing, and here we are spending yet again on another sweater or blanket for one of the extended family that they possibly don’t even want or will ever use. Wasteful! I would rather spend that money on a family in need.

    • B says:

      I agree. I often tell my husband that around the holidays so many people will buy things for people that they don’t need or want with money they don’t have and the recipient may truly need just the basics..yet its another this or that. It really breaks my heart b/c I know that many people struggle to “get Christmas” for their loved ones. Nothing would warm my heart more than to give to a charity in their honor, take food and toys to a family truly in need, or commit to volunteering around the holidays in lieu of gifts.

    • I heard of one family that decided after the kids had grown up instead of exchanging gifts with each other, they pooled their resources and sponsored and family in need for Christmas. Sounded like a great Christmas tradition!

    • MrsWJAA says:

      Have you considered giving gifts to charities in the name of the family members and just give the family member a printed certificate stating that fact?
      You could easily customize this gift by giving to a cause that means something to the reciever, such as a donation to the animal shelter for the animal lover, or donate to (fill in type) cancer research for the cancer survivor, etc.
      These donations do not always have to be made in cash, some could be made by donating your time (senior center, soup kitchen, animal shelter, etc.)
      Then, you are giving to a family in need in honor of the person that the gift is for. Best of both worlds:)

  • Holly says:

    My Husband’s family does a gift exchange every year at Christmas. Everyone brings one gift ($5.00 or less) and we draw numbers and exchange them that way. It is a lot of fun, especially when gifts can be taken and passed around.

    • I know one family that did that and played the “dirty santa” game along with it (as people choose a gift from the pile, they can decide to take a wrapped gift or take a gift that someone else has already unwrapped. The person they take that gift from can then choose an unwrapped gift or take someone else’s, etc.). There was always some absurd gift that no one wanted but people got stuck with anyway. There was a lot of laughter involved.

  • Kelley says:

    Such good ideas. Its hard not to give gifts to everyone.. but when you dont have the money you gotta make cuts. Great advice!

  • Kelley, the great thing about times like these is that it gives you a base line to remind yourself how thankful you are. Someday we’ll look back on the giftless Christmases and feel even happier knowing that we can give each other gifts now – and that we don’t “need” gifts to show each other love.

  • Jessica says:

    I have large family on my dad’s side, my mom’s side, my husband’s mom’s side, and my husband’s dad’s side… not to mention any stepparents and their relatives… Let’s just say there’s lots of family : ) For most family that live far away we just send a Christmas card with letter and picture of the family. For the family who we celebrate locally with we have done different themes each year. One year everyone bought gifts and gave it to a family in need. Most years we draw names. This year we are playing the dice game and we cannot spend more than $10 per gift.
    All year long I look for great deals. After Christmas, lots of watches, jewerly sets, etc go on clearance. I have bought $20.00 watches for $3. I save in a big plastic bin all the beauty items (male and female) that I get for free or less than a $1 after coupons and then I do beauty gift baskets (I get the baskets from Goodwill when they have their color ticket sale that makes them 1.49). Then when Christmas comes I have very little to actually do. Also I use the Walgreens photo deals when they have the free 8×10’s to get my parents pics of my girls and then I buy frames either at a secondhand store or Walmart.

    When you first start couponing, it takes awhile to get your system in place but eventually you find your groove. It’s like that when you want to save money on Xmas gifts too. Through the years you will find a system that works for you. I have three 66quart bins filled with gifts for birthdays and christmas. Whenever I see a great deal, I add it to the bin. If you’re crafty or want to be even more frugal you can make a dessert (cookies, bars, etc) and put it in a tin and wrap it up. Find a recipe to make your own caramel popcorn, buy a tin, and voila. Create your own cookbook of your most trusty recipes as a gift. One year my mom gifted to everyone a snowflake ornament that she crocheted, then starched and in the center of the snowflake was a hole large enough to put my brother and I’s school picture.

    Something not yet mentioned either is that it’s okay to come up with a good gift idea and do that gift every year. I have a friend who does the beauty set for her sisters every year. It’s nice to know, ‘oh hey, I know my sister will get me x,y,z and I don’t need to go out and buy that’. In my family I always send my aunt and uncle a box of chocolates. I don’t have to pay a lot for shipping and it’s something the whole family can enjoy. Or a different aunt always sends out a calendar that she gets made with pictures from the family reunion. I love knowing that I don’t have to buy a calendar and I always enjoy seeing the new pictures and reminiscing about the good memories.

    But I wholeheartedly agree with Steph on her last point there; Christmas is not about giving and receiving gifts. It is about celebrating the birth of Jesus! What a wonderful and amazing gift that God gave us!

    • Jessica, you’re right about it being nice to “rely” on some gifts every year. Like the inevitable razor heads and deodorant in the Christmas stocking – as I got older and started paying for those myself, I started *really* appreciating them, lol!

  • Grace says:

    We saved up points from Discover Rewards and got “free” giftcards to give for Christmas. For example, we got a $50 Pizza Hut gift card for “free” and we are sticking it with a homemade treat and giving it as a family gift. Cheapest way to do Christmas and all we did is use a credit card all year.

    • My family has done that before. My parents use a credit card almost exclusively for direct withdrawal-type purchases so they aren’t as tempted to over-spend on it but still get the benefits of free gift cards. Makes some fun free Starbucks stops!

  • Spendwisemom says:

    Great ideas. We set up a budget for everything: food, gifts, tree, parties, etc. and pay cash for everything. It is so nice not to have any bills to pay after the holiday. If we have less to spend one year, we just adjust the budget and do the best we can with what we have.

  • Anne says:

    We also do the name exchange in our family (11 kids, all adults now, some with families). The cousin situation is starting to get out of hand, so we’ve discussed having the cousins exchange names, too. I still try to get something small for all my siblings, though, just little gifts (all less than $5).

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