Buddy is a seven-year-old boy living in a sprawling house in the rural South during the early 1930s. He is deeply devoted to his older cousin, whom he views as his equal and primary source of affection. Creative and sensitive, Buddy enjoys sharing stories from the local movie theater and dreams of tap dancing, while worrying over the financial anxieties and strict rules imposed by the other adults in his household.

Buddy's Friend is an unassuming woman in her sixties with shorn white hair and a delicate face tinted by the sun. Despite being dismissed as eccentric by the rest of her family, she possesses incredible physical endurance, a deep knowledge of the natural world, and boundless generosity. She finds joy in simple, everyday things and orchestrates magical Christmas traditions for herself and Buddy using creativity instead of money.

The Relatives are the unnamed extended family members who control the household and its finances. They act as a collective, wrathful chorus representing rigid societal propriety and religious judgment. Disapproving of joy and excess, they routinely neglect or actively scold Buddy and his friend for failing to conform to their strict standards.

Mr. Haha Jones is an imposing man with razor scars across his cheeks who runs a local establishment deemed sinful by the town's public opinion. Named ironically because he rarely laughs, his grim appearance initially terrifies Buddy. However, he quickly proves to be a charitable figure who recognizes the earnest effort of his two unusual customers.

Queenie is a tough little orange and white rat terrier who serves as the faithful companion to Buddy and his friend. Having survived distemper and two rattlesnake bites, she is a resilient and cherished member of their small, chosen family. She eagerly participates in all their seasonal traditions, from gathering nuts in the freezing grass to enjoying a drop of whiskey.