Seven Budget Saving Tips for the Upcoming Holiday

Family sitting on couch together with gift and a card

The holiday season is perfect for unwinding and spending quality time with your family — but it’s also an expensive time of the year.

According to the National Retail Federation, “the average American spends a little more than $1,000 between gifts, goodies and travel during the holiday season.” For many, this time of the year kills a budget, yet it doesn’t have to.

Are you looking for a better way to shop? Here are a few tips to keep your finances on track and avoid post-holiday money blues.

1. Set a Spending Limit or Budget
Some shoppers get into trouble because they don’t create a spending plan or financially prepare for the holiday season. Shopping without a plan is one of the fastest ways to overspend. So before stepping foot inside a store, take a look at your budget to see how much you can realistically afford to spend this year. From here, commit to spending up to a certain amount — and don’t spend a penny more.

A lot of other expenses can creep up during the holidays, such as the cost of decorations, parties, travel expenses, and more. Therefore, make sure you prepare for all expenses (not just gifts).

Keep in mind, too, staying in budget might involve cutting a few people from your list.

2. Shop Online
You’ll not only avoid crowds when shopping online, it’ll also be easier to stay on budget.

Online shopping might not be fun for those who enjoy the hustle and bustle of a crowded mall. However, staying away from physical stores can eliminate aimless browsing, which increases the temptation to buy impulsively. Instead, you can focus attention on your list.

Plus, online shopping makes it easier and faster to compare prices and find the best deal. Join a retailer’s email list and you’ll periodically receive discount codes and coupons to help you save money.

3. Use Cash
Post-holiday debt can get the new year off to a rocky start. Depending on the amount of debt incurred during the holidays, it might take months or years to pay off balances. And let’s not forget, debt means you end up paying a lot more for items.

To avoid digging yourself into a hole, commit to only using cash when shopping for gifts.
Using a credit card or debit card might be easier and more convenient, but there’s also the risk of overspending.

The benefit of cash, though, is that you can only spend what you bring into a store — and once the cash is gone, it’s gone.
If you’re not comfortable carrying cash, use a prepaid debit card. You can load your holiday cash onto the card, and then use this card for all your purchases.

4. Do a No-Spend Month
To avoid using credit this holiday season, commit to a no-spend month during October and November. The money saved over the course of two months can help cover most of your holiday expenses.

This involves only spending money on necessities, which are items you need in order to live. Necessary expenses include housing, utilities, insurance payments, minimum debt payments, food, etc. Unnecessary expenses, on the other hand, include dining out, miscellaneous shopping, entertainment, and recreation.

A no-spend month is an excellent way to reign in spending. It also opens your eyes to bad money habits, possibly encouraging you to adjust how you spend money.

After a month of only buying the things you need, you might realize that you have more disposable income than previously thought.

5. Gift of Service
There’s no rule that says you have to give a tangible gift during the holiday season. If money is tight, get creative and offer practical assistance instead. Think of your loved ones and how you can personalize a gift to meet their unique needs.

For example, does a family member or friend appear overwhelmed? If so, offer to babysit so they can enjoy some alone time or couple time. Are you a great cook or baker? If so, give homemade pies or cakes as a gift, or prepare a meal for a family.

6. Send Greeting Cards
You don’t have to spend a lot of money to let others know you’re thinking about them, so take a different approach this year. Instead of gifts, send greeting cards to those on your list.

7. Cash in Your Rewards Points
If you have unused credit card rewards, redeem these for small denomination gift cards. For example, do you know a few coffee lovers? You might have enough points for $5 or $10 gift cards to Starbucks or another coffeehouse.

Final Word
The holiday season can be a budget-buster, so it’s important that you keep spending on track. Between careful planning and a few sacrifices, it’s possible to save enough cash to cover your expenses — without going into debt.


We’re here to help. Anytime.

Have questions? Contact us for neighborly advice.

Sign up for our free newsletter

Our monthly newsletter sends mortgage news, market updates and financial tips right to your inbox.