How Much to Spend on Holiday Gifts and Decorations (Without Going Overboard)
Let's be honest: holiday magic doesn't come cheap. December has a sneaky way of making your money go a long way, from twinkling lights to thoughtful gifts for teachers, neighbors, and kids. But that doesn't mean you have to stop being happy about Christmas. You can enjoy the holiday season and still reach your financial goals if you plan ahead.
Here's how to plan your holiday budget in Indiana without going overboard and still making it special for your family.
How much do people usually spend on the holidays?
The National Retail Federation says that in 2024, the average American family spent more than $875 on gifts, decorations, and holiday activities. It's easy for Indiana families with two incomes to reach or even go over that number without a plan.
You don't have to be average, though; you just have to be purposeful.
Step 1: Make a budget for your whole vacation
First, choose your total number. Think about your:
Money coming in
Costs every month
Bills coming up (hi, January)
Plans to travel (even short trips to Indiana)
A good rule of thumb? Your total holiday costs should be less than 1.5% of your yearly income after taxes.
For instance, if your family makes $120,000 a year, you should try to spend no more than $1,800 on gifts, decorations, food, and events.
Step 2: Put It Into Groups
Once you've decided how much money you want to spend on your whole vacation, split it up like this:
You can change things up based on your own values. For instance, if you have a big Friendsgiving every year, focus more on food.
Smart Christmas Gift Budget Tips
1. Write down what you want (like Santa).
Start with your close family, then add teachers, neighbors, coworkers, and others.
2. Set a limit on the number.
We use the "4 Gift Rule" for our kids:
Something they want, something they need, something to wear, and something to read.
3. Remember the gifts that are hidden.
Plan ahead for stocking stuffers, holiday cards, classroom parties, and Secret Santa exchanges. They add up quickly!
Planning for Decorations That Don't Look Cheap
It's easy to go overboard when you go to Target or buy new twinkle lights. You can still make your home feel festive without going overboard with a credit card if you have a budget of $300 to $400.
Low-Cost Holiday Decor for Your Indiana Home:
Buy things on sale after Christmas and use them again each year.
Make your own wreaths or centerpieces with pinecones or plants from your area.
Trade decorations with friends or neighbors.
Every year, buy one big item that will really stand out, like a wreath or statement garland.
Want to have a lot of lights without having to do the work? Indy Christmas Light Pros can set up a professional display for you so you can enjoy a glowing home without having to climb an icy ladder.
How to Plan Your Holiday Fun and Events
Indiana families have a lot of memories of holiday activities, like train rides at Conner Prairie and Christmas markets in Carmel.
Ways to Save:
Instead of trying to do everything, pick 2–3 signature experiences.
Check out the calendars for city parks or libraries to find free or cheap events in your area.
Instead of buying food on site, bring snacks and cocoa.
Put money in an envelope or on a prepaid card just for going out.
Last Thought: Pay Attention to the Feeling, Not the Stuff
Your kids won't remember how many gifts were under the tree at the end of the day, but they will remember baking cookies, driving through holiday lights, or the night you built a fort and watched Christmas movies with popcorn.
Planning a holiday budget in Indiana isn't about cutting back on fun; it's about spending money on the things that matter most. So pick a number, stick to your plan, and make this season one that your family will enjoy.
