Is there anything better than celebrating the holiday season with family and giving to others? However, in the season’s excitement, losing track of spending is also easy. In fact, according to the 2024 Deloitte holiday retail survey, respondents expect to spend $1,778 (+8% year-over-year) this holiday season after expressing record holiday spending intentions in 2023.
Obviously, holiday spending can strain your budget, like the Grinch stealing every Christmas present and decoration in Whoville. Buying gifts, traveling, attending parties, and decorating can get expensive quickly.
The good news is that you can enjoy your holiday with some planning and mindfulness without breaking the bank. So, let’s use these tips to help you keep your holiday spending in check.
1. Plan your budget realistically.
A clear, realistic budget is the foundation of responsible holiday spending. To start, determine where you’ll spend your money this holiday season. A few examples would be gifts, decorations, food, travel, and any events you’ll attend. You should also assign a maximum amount to each category to align your overall budget with what you can comfortably afford.
Keep in mind that your budget isn’t set in stone, but it will help you make better spending decisions.
Pro tip: Consider setting up a small emergency fund in your holiday budget for unexpected expenses.
2. Make a gift List and check it twice.
One of the biggest budget busters during the holidays is impulse shopping. How can you prevent this? Put together a list of everyone you want to purchase gifts for. Ideally, each person should be given a specific idea and a price limit.
This will help you stay within your budget and stay focused, especially when you are tempted by holiday sales.
Pro tip: With family and friends, you might want to consider “Secret Santa” gift exchanges or setting a spending limit.
3. Think outside the box when it comes to gift-giving.
Spending a lot on gifts isn’t always necessary. Homemade gifts, baked goods, and customized experiences are all alternatives you can consider. Besides saving you money, these can also make the gift more meaningful.
Below are some ideas that are thoughtful and memorable;
- Crafting
- Baking
- Scrapbooking
- Creating coupon books for services like babysitting, cleaning, or a home-cooked meal.
Pro tip: A group gift can also be a great way to pool resources and have a more significant impact without overstretching individual budgets.
4. Shop smart and early.
Shopping strategically can help you snag great deals during holiday sales. Rather than buying everything at once, start early and look for sales on specific items. Use price comparison apps or browser extensions like ShopSavvy, BuyVia, or Price.com to check for deals and monitor prices over time.
Pro tip: Do not fall victim to “deals” that encourage overspending, such as BOGO. Regardless of the discount, only purchase what’s on your list.
5. Take steps to avoid credit card debt.
Credit cards can be tempting during the holidays — especially if you get cashback or rewards points. Still, 28% of credit card users still owe money from last year’s holiday season. To maintain financial health, however, one must use money wisely.
When using credit, aim to pay off your balance in full each month to avoid interest charges. Alternatively, you can use a debit card or cash instead of a credit card to stay within your budget.
Pro tip: Some people use prepaid cards preloaded with their holiday budget to prevent overspending.
6. Host on a budget.
The cost of food and decorations can quickly add up if you’re hosting a holiday party. But how can you keep costs down? Simplify the menu or ask guests to bring a dish for a potluck-style meal. You can also save on annual expenses using items you already have or DIYing decorations.
Pro tip: Organize a “decor swap” among friends or family to keep your decorations fresh and festive without buying new ones every year.
7. Think carefully about your travel plans.
In a recent Bankrate survey, 83 percent of holiday travelers are looking for ways to save money on travel. As such, when planning your holiday travel, check out options early for the best rates.
For instance, you might consider traveling on off-peak days. Additionally, you can use reward points if you have accumulated them. Another option is to stay with family or friends to reduce lodging expenses.
To get the best price, compare sites like Google.com/travel/hotels before booking accommodations. Don’t forget that sometimes, calling the hotel directly can result in a better rate.
Pro tip: You may want to consider holding your main celebration when travel is not as busy.
8. Limit impulse purchases.
During the holidays, you can easily spend more money on holiday-themed items, festive décor, and extra treats. To combat this problem, a “cooling-off” period should be added before any impulse purchases are made.
If you shop online, leave the items in your cart and wait 24 hours before purchasing them to ensure they still feel vital to you.
Pro tip. If non-essential items tempt you, create a wishlist and revisit it after the holidays. In most cases, the urge to buy will pass.
9. Focus on meaningful experiences.
Don’t forget that the holidays are not about spending but connecting with others. Some ideas would be;
- Explore free holiday events in your area, like tree lightning or Christmas parades.
- Host a holiday movie night and game days.
- Plan game nights with loved ones.
- Bake cookies together.
- Volunteer together at a soup kitchen, visit the elderly, or create a giving box.
Most of the time, these moments are more memorable than any item, and they don’t cost much—if anything at all.
Pro tip: Make these experiences and holiday traditions more meaningful. For example, decorate your home together on the Saturday following Thanksgiving.
Putting a Bow on It
When you plan ahead and stay within your budget, holiday spending can be enjoyable and stress-free. With these tips, you can create a meaningful, festive season without sacrificing your finances.
FAQs
What are some tips for saving money on holiday gifts?
- DIY gifts. It is possible to give thoughtful and cost-effective homemade gifts.
- Secret Santa or gift exchanges. Keep the number of gifts you need to buy to a minimum.
- Shop early. Often, early-bird shoppers find better deals and avoid last-minute price hikes.
- Use coupon codes and cashback apps. Take advantage of cashback and discount offers.
- Shop secondhand. You might want to purchase gently used items at thrift stores or on online marketplaces.
How can I avoid overspending on holiday meals and parties?
- Plan your menu. Preplan your menu so you don’t spend more than you can afford and avoid impulse purchases at the grocery store.
- Cook at home. Costs can be significantly reduced by hosting a potluck or cooking at home.
- Shop smart. Look for sales and coupons when shopping for groceries or party supplies.
- Portion control. Don’t waste food by overindulging.
How can I avoid overspending on holiday travel?
- Book early. Often, lower prices can be obtained by booking early.
- Be flexible. You may want to consider alternative dates and locations for your trip.
- Pack light. Don’t pay for checked baggage.
- Use travel rewards. Take advantage of credit card points or airline miles.
What can I do to manage holiday debt effectively?
- Create a repayment plan. You can manage your debt by breaking it down into manageable payments.
- Consolidate your debt. Get a lower interest rate by combining multiple debts into one loan.
- Don’t take on additional debt. Avoid using credit cards for purchases that aren’t essential.
- Contact your creditors and negotiate. Get in touch with your creditors if you are having trouble paying them.
How can I reduce holiday stress and enjoy the season?
- Be realistic in your expectations. Don’t aim for perfection.
- Practice mindfulness. Don’t forget to relax and de-stress.
- Limit your social commitments. Make sure you prioritize the events that are most important to you.
- Make quality time a priority. Rather than focusing on material possessions, spend time with loved ones.
Image Credit: Kaboompics.com; Pexels
