Dreading Christmas because of the cost? You’re not the only one, but don’t despair. You don’t have to ruin yourself to enjoy Christmas.

Lots of budgeting articles talk about lists of who you give to and how much you should spend. But, before thinking about costs, think about what you want from Christmas. Most people just want a great family day. You can have this even on a tight budget.

You’ve heard of the good enough mother? She knows caring for children doesn’t have to involve expensive after-school activities every day. Well, Christmas can be like that too – sane, enjoyable and not financially ruinous.

Here are some tips on how to have a happy, budget-friendly Christmas…

• DIY gifts

This is an old Kiwi tradition worth reviving. Lots of people love DIY gifts as they are so personal. You’ve gone to the trouble of making me something? Wonderful. A recent example I came across was a gift for wedding guests but it would be great for Christmas too: little pots of home-style lemon curd labelled with each person’s name. Other similar Christmas gifts could be homemade cookies or pate, or my favourite: Italian Siena nut cake that keeps for months.

• Delaying the cost

You can do this by giving people vouchers for an activity – just right for who already have enough stuff but would love to terrify themselves sky diving for example. You can also put off paying for this until after Christmas.

• Give time not money

Your time can be a gift of too. Babysitting vouchers for new parents, so they can have a night out, is one idea. Your imagination can provide others. Handy with computers? How about a computer repair or teach you voucher?

• Cutting the cost of presents

Do this with Boxing Day vouchers. Give personal voucher that promise to buy the gift after Christmas in the sales when it’s $200 cheaper. Buy a few small holding gifts for the day to keep the kids happy.

• Kids like to do things

This means gifts that engage them in activities last longest, so think Lego-type toys (there are cheaper options than Lego itself). These and craft-type toys will keep the children happy for hours and aren’t too pricey. And the smallest child? They usually prefer the box their present came in.

• Op-shop gifts

Recycled fashion is now very fashionable and some teens are talented op-shop hounds. Take your favourite hound along and set her loose, then buy her thank-you coffee. You’ll save heaps and have some beautiful one-of-kind gifts. A tip: out of town op-shops are best as they haven’t been thoroughly picked over.

• You don’t have to give to everyone

Not everyone wants or needs a gift. People can also be embarrassed if they can’t afford to buy a gift back. That’s why the $10 office Secret Santa is such a good idea. So have a chat with the family and ban or put limits on gift giving.

• Don’t upscale food

While it’s tempting to upscale because Christmas is treat time, you can’t always tell the difference between own-brand supermarket food and more expensive brands. And budget Pak ‘n Save has some of the best deli food around. For fresh fruit and vegetables, farmers’ markets are great value – big boxes of blueberries, which will be in season soon, for similar prices to tiny supermarket punnets.

• Cheap drinks taste the same

Ditto for drinks. Expensive booze doesn’t always taste much better than more modest buys. Look for wine glut offers – good wines at cheap prices. The Australian wine glut continues. Take advantage of it.

• If you do have to borrow…

Should the budget still blow out, go to the bank not a payday lender. Their rates for unsecured loans are much lower.

I found one online payday lender offering $500 for 24 days – then you pay back a whopping $702.50. That’s an interest rate of 40 per cent. A similar unsecured bank loan would cost you around $30 – rather than the $200 on the payday loan. This figure is based on an average interest rate of 12 per cent over 12 months, which means you pay only one per cent interest if you pay the money back in 24 days. The interest would be around $5, the other $25 is the fee.

My budget choices

So, what do I do? I make pate. Every year. Because it’s easy. Chicken livers are very cheap but no one thinks about that because the result is so delicious. I also started making Italian Siena cakes a while back. These are not so cheap as nuts are pricey – but the shop version is eye-wateringly costly. The perfect present for those who already have too much stuff already.

I am also big on Christmas stockings. My daughters adore them. Chocolates from Trade Aid (the Third World needs a Christmas too) tiny stationery items from the $2 shop and books and lace from the op shops, they love it all.

Disclaimer

Johanna is a financial and technology journalist who thinks women need to know more about the Big Picture when it comes to money. Her Kate & Whio blog is intended to help and to educate, but the information contained in it should not be taken as specific financial advice. You are responsible for your own money decisions.