The holiday season approaches with twinkling lights and festive music, but it often brings financial stress along with the holiday cheer. So below I’m sharing how to save money for the holidays!
Many families find themselves struggling with holiday debt when January rolls around.
A little planning now can transform your end-of-the-year celebrations into a stress-free holiday season. Creating a holiday fund isn’t just about avoiding credit card bills – it’s about preserving the holiday spirit while maintaining your financial goals.
Smart spending habits make a huge difference when higher prices seem to hit everywhere you look. From holiday gifts to holiday travel, the costs can quickly spiral out of control without clear spending limits in place.
This complete guide will walk you through the easiest ways to save money while keeping the magic alive.
Whether you’re planning thoughtful gifts or hosting a holiday party, we’ll help you create a realistic plan that prevents draining your emergency fund. The first step to a joyful season starts with understanding where your money needs to go.
Don’t celebrate Christmas?
If your family does ANY holiday gift-giving and/or party-throwing in December these saving money for Christmas strategies can still apply and will help your family. So just follow the same basic principals.
Planning & Budgeting for the Holidays
The holiday season is a great time to get organized and tackle your shopping list. Setting spending limits and planning thoughtful gifts can help prevent financial stress later on. This is the first step towards a stress-free holiday season and keeping your bank account happy!
1. Create a detailed gift-giving budget and shopping list before spending
The holiday season approaches, making it a great time to plan your gift-giving strategy. Start by setting a budget and creating a shopping list for thoughtful gifts that fit your financial goals. A little planning now can help you avoid holiday debt and keep your bank account healthy for the new year.
2. Develop a gift-giving philosophy to guide your spending decisions
Creating a gift-giving philosophy can really help you navigate the holiday season without stress. Focus on thoughtful gifts that bring joy to your family members while keeping an eye on your holiday expenses. Planning can save you from impulse buys and help you stick to your budget, making it a great way to enjoy the most wonderful time of the year.
3. Track all spending as you go – don’t wait until January
Tracking your spending during the holiday season is a great way to avoid financial stress later. By keeping an eye on your holiday purchases, you can spot impulse buys and stick to your shopping list. Plus, a little planning now can help you save much money for all those holiday gifts and family gatherings!
4. Start saving early – create a holiday fund starting in January
Starting a holiday fund in January can make a big difference when the season rolls around. With a little planning, you can set aside money each month, helping to cover those holiday expenses without breaking the bank. This easy way to save can help you enjoy the most wonderful time of the year without the stress of holiday debt.
5. Rein in other spending categories during the holiday season
The holiday season can be a great time to catch up with family and friends, but it can also lead to overspending. To keep your bank account healthy, take a closer look at your spending habits in other areas like groceries and utilities. A little planning and setting spending limits can help you stick to your financial goals while still enjoying the holiday cheer!
6. Cut expensive traditions that don’t hold special meaning
The holidays are a great time to focus on what truly matters. If certain traditions are just adding to your holiday expenses without bringing joy, it might be time to let them go. Instead, make room for quality time with family members and create new, meaningful moments that fit your budget.
7. Be proactive – avoid last-minute rushed shopping
Shopping for gifts can be fun, but waiting until the last minute can lead to stress. Make a gift list early and stick to your spending limits to avoid holiday debt. A little planning now can help you enjoy the holiday spirit without breaking the bank or rushing through your purchases.
8. Factor in all costs, including shipping, wrapping, and decorations
The holiday season approaches, and it’s a great time to think ahead. Remember to factor in costs like shipping, wrapping paper, and decorations when planning your gift list. A little planning can help you stick to your budget and avoid any financial stress later on!
How do I save money on a tight budget?
The key here is budgeting. A written budget you write out and stick to before the month begins. You want to know exactly where all of your hard-earned dollars are going, even if you don’t have a lot of them.
Once you begin to use a budget you’ll quickly identify if you have a spending problem, an income problem or are simply living beyond your means.
If you still struggle with trying to budgeting money on a low income (click to read on my site), check out one of my most popular personal finance posts to give you more actionable tips to get back on track!
Not on a written monthly household budget?
It’s essential for the financial future of your family and essential for learning how to save money for the holidays.
I have a copy of my Budgeting Spreadsheet available at no charge.
It’s a simple, highly customizable, Excel spreadsheet and you can download it quickly and easily FOR FREE!
Shopping Strategies for Christmas Spending
Planning your holiday shopping can keep financial stress at bay. Start with a shopping list to avoid impulse buys and stick to your spending limits. This is a great way to give thoughtful gifts without breaking the bank this holiday season.
9. Shop early – look for sales throughout the year
As the holiday season approaches, it’s a great time to start planning your shopping list. Look out for sales like Black Friday and Cyber Monday; they offer some of the best deals on holiday gifts. A little planning now can lead to a stress-free holiday season and help keep those spending limits in check!
10. Compare prices using your phone while shopping
Shopping can get pricey, especially around the holiday season. Using your phone to compare prices is one of the easiest ways to save money and stick to your budget. It’s a great option for finding thoughtful gifts without adding extra financial stress.
11. Avoid shopping at malls to prevent impulse purchases and distractions
Shopping at malls can lead to impulse buys that hurt your bank account. With the holiday season approaching, it’s easy to get caught up in the holiday cheer and overspend on gifts or decorations. Instead, consider local markets or online options to stick to your shopping list and keep those holiday expenses in check.
12. Look for deals every day instead of focusing only on Black Friday/Cyber Monday
Instead of waiting for Black Friday or Cyber Monday, check for deals all year long. You can find great options that fit your budget and help you avoid holiday debt later. This way, you’ll spread out your holiday expenses and enjoy the holiday spirit without the last-minute rush!
13. Buy last year’s electronics models for significant savings
If you’re looking to save some cash, check out last year’s electronics models. Retailers often mark down older stock to make way for new arrivals, especially around Black Friday and Cyber Monday. This is a great time to bag a unique gift or upgrade your gadgets without breaking the bank!
14. Combine online orders to save on shipping costs
The holiday season approaches and many of us are busy with gift lists and shopping. One easy way to cut down on holiday expenses is by combining your online orders. This little planning can lead to big savings, making it a great option for anyone looking to stick to their budget this time of year.
15. Shop online to save time and gas money
Shopping online is a great way to save both time and money during the busy holiday season. It helps avoid impulse buys and lets you stick to your shopping list, making it easier to manage holiday expenses. Plus, you can relax at home while checking off gifts for family members without the stress of crowded stores.
16. Order early enough to avoid expensive rush shipping
Planning ahead for your holiday shopping can save you a lot of money. Ordering early helps you avoid those high shipping costs that pop up during the busy season. Plus, it gives you more time to find the unique gifts your loved ones will appreciate, making your holiday season more enjoyable.
17. Use old gift cards you haven’t spent yet
If you have gift cards lying around, now’s the time to put them to good use! With the holiday season approaching, these cards can help ease financial stress and keep your bank account healthy. Plus, they make for unique gifts that show you care without breaking the bank.
18. Take advantage of price-matching policies
Price-matching can be a great way to save money, especially during the busy holiday season. If you find a lower price at a competitor, let the store know and they might match it. This means you can get the unique gifts on your shopping list without overspending!
Gift-Giving Approaches for Christmas
This time of year often brings a mix of excitement and stress, especially when it comes to holiday shopping. Homemade gifts can be a great option to save money while showing thoughtfulness. With a little planning, you can make this holiday season a stress-free experience for everyone on your gift list!
19. Consider group gifts for bigger items
Group gifts can be a great way to tackle those big-ticket items without emptying your bank account. Pooling together with family or friends means you can all contribute, making it easier to snag that unique gift everyone wants. Plus, it adds to the holiday cheer when you wrap it up together!
20. Make homemade presents
Homemade gifts are a great way to spread holiday cheer without breaking the bank. You can use items from garage sales or your craft supplies to create thoughtful gifts that family members will love. This time of year, a little planning can go a long way in keeping holiday spending within your limits and making the season more special.
21. Give time and experiences instead of physical gifts
This holiday season, think about giving experiences instead of material things. Spending quality time with family members can create lasting memories without the stress of holiday expenses. It’s a great option to celebrate and spread holiday cheer without breaking the bank!
22. Try DIY gifts like baked goods or crafts
Making homemade gifts is a great way to save money during the holiday season. Baked goods like cookies or simple crafts can show thoughtful care without breaking the bank. Plus, they often create lasting memories and quality time with family members, making the holidays even more special.
23. Consider Secret Santa or gift exchanges for large groups
Secret Santa is a fun way to spread holiday cheer without breaking the bank. It allows everyone to enjoy thoughtful gifts while keeping holiday expenses in check. With a little planning, you can make it a great time for everyone involved!
24. Get thrifty with stocking stuffers – use dollar stores
Shopping at dollar stores is a fantastic way to find stocking stuffers without breaking the bank. You can fill those stockings with fun, thoughtful gifts that won’t drain your holiday fund. With a little planning, you’ll keep your spending limits in check while still spreading holiday cheer!
25. Make thoughtful donations to charity in someone’s name
Donating to charity in someone’s name is a great option for gift-giving. It brings holiday cheer while helping those in need, showing that you care beyond material things. This thoughtful gift can lighten the holiday expenses for your gift recipients and create a lasting impact.
26. Be a sentimental spender – focus on meaningful gifts vs. random items
This time of year, it’s easy to get caught up in holiday shopping and end up with impulse buys that lack thought. Instead, focus on thoughtful gifts that reflect the personalities of your gift recipients. Creating a shopping list can help you stick to your financial goals and keep your holiday spending in check, making for a stress-free holiday season.
Creative Cost-Cutting for Christmas Spending
The holiday season approaches, and it’s a great time to get creative with your gift list. Instead of splurging on high costs, consider homemade gifts or thoughtful gift cards that show you care without breaking the bank. A little planning can lead to holiday savings and a stress-free holiday season!
27. Wrap gifts creatively using alternative materials
Getting creative with gift wrapping is a fun way to add some holiday cheer while saving money. Using materials like old newspapers or fabric scraps can give your presents a unique touch without adding to holiday expenses. Plus, this easy way to wrap gifts can help you stick to your budget and keep your holiday spending in check!
28. Buy holiday supplies early (wrapping paper, cards, decorations)
The holiday season approaches, and it’s a great time to stock up on supplies like wrapping paper and holiday cards. Buying these items early can save you a lot of money and help you avoid the stress of last-minute shopping. Plus, having everything ready adds to the holiday cheer and makes it easier to focus on quality time with family and friends.
29. Purchase holiday decor right after the holidays for next year
After the holiday season, many stores offer great deals on decorations. It’s a smart way to save money for next year while adding to your holiday cheer. Start your shopping list early and enjoy the unique gifts you can find at lower prices!
30. Use cash instead of cards to better track spending
Using cash can be a great way to manage your holiday spending. When you have a set amount, it’s easier to stick to your shopping list and avoid those impulse buys. Plus, seeing the cash leave your hands can really help you understand just how much money you’re spending this time of year.
31. Save money on traditions by hosting virtual gatherings
Virtual gatherings can be a great way to stay connected without spending a lot of money. You can host a holiday party online and still enjoy quality time with family and friends, no matter where they are. This approach not only saves on travel costs but also helps avoid holiday debt while keeping the holiday spirit alive.
32. Skip random gift exchanges at work or social groups
Random gift exchanges might sound fun, but they can also lead to stress and worry about spending limits. Instead, consider thoughtful gifts that actually fit your gift recipients’ interests, which can make the holiday season more enjoyable. A little planning goes a long way, whether it’s homemade gifts or simply sticking to a holiday shopping list.
33. Consider regifting appropriate items thoughtfully
Regifting can be a great way to save money during the holiday season. If you have items that are new and in great condition, they might make a unique gift for someone on your list. Just be sure to think about the gift recipients and choose wisely to keep the holiday spirit alive!
34. Get creative with cards – send digital greetings or make your own
This time of year is perfect for sending out holiday cards that spread some cheer. With a little planning, you can create unique designs or digital greetings that your family and friends will love. It’s a fun way to share your holiday spirit without much money or hassle!
Travel & Social Gatherings During the Holidays
The holiday season approaches and it’s the perfect time to make cherished memories with loved ones. Whether it’s hitting the slopes, enjoying a picnic, or gathering around a campfire, there are plenty of ways to celebrate together. These moments of joy capture the essence of the most wonderful time of the year!
35. Book holiday travel well in advance
Planning your holiday travel early can save you a lot of stress and money. By booking flights and accommodations well in advance, you can snag the best deals and avoid the high costs that often come with last-minute planning. Plus, you’ll have more time to focus on enjoying quality time with family and friends during the most wonderful time of the year.
36. Plan group activities instead of excessive gift-giving
Instead of stressing over holiday shopping and high costs, why not plan some fun group activities? This is a great way to create memories without breaking the bank. Whether it’s a holiday party or a snowball fight, spending quality time together can bring more cheer than material gifts!
37. Consider splitting costs for family gatherings
When the holiday season approaches, family gatherings can get pricey. Splitting costs helps everyone enjoy quality time without the stress of holiday expenses. This easy way to manage spending limits keeps the holiday spirit alive!
38. Select specific friends for activities vs. buying for everyone
This time of year can put a strain on your bank account, especially with holiday spending. Instead of buying gifts for everyone, consider choosing activities with specific friends or family members. It’s a great way to celebrate without falling into financial stress or impulse buys!
39. Look for travel deals and discounts year-round
The new year is a great time to start looking for travel deals and discounts. Websites often offer fantastic rates for international flights and holiday travel, especially as the holiday season approaches. With a little planning and patience, you can find the best deal and make the most of your holiday fund.
Final Thoughts
Starting your holiday fund early is one of the easiest ways to ensure a stress-free holiday season. Creating a shopping list and sticking to spending limits helps avoid those tempting impulse buys.
Remember that holiday cheer isn’t measured in material things. Homemade gifts and quality time often mean more to gift recipients than expensive holiday purchases. Consider sending thoughtful holiday cards or organizing a potluck holiday party instead of stretching your debit card to its limits.
Gift cards make a great option when you find the best deal, and they help you stick to your financial goals. Planning ahead for everything from wrapping paper to holiday travel prevents that dreaded holiday debt from following you into the new year.
With these strategies in place, you can focus on what truly matters this time of year. Keep your gift list reasonable, embrace unique gift ideas, and remember that making memories matters more than making purchases. Your future self will thank you when January arrives.
Frequently Asked Questions
What is the average Christmas budget?
The average Christmas budget varies significantly among American households, with most families spending between $800 to $1,200 on holiday expenses. Large family gatherings and high costs for gifts often lead to increased discretionary spending during this most wonderful time of the year.
Your holiday budgeting tip should focus on what’s comfortable for your specific situation.
A single person might budget $500, while families may need to plan for more than $1,000 to cover everything. The key is choosing an amount that won’t strain your finances or require paying off debt next year.
Remember that going into debt isn’t a good idea, no matter how festive the season. Set a realistic budget based on your income and savings, not what others are spending.
What is a Christmas account?
I go deeper into why you not only need a Christmas club savings account but also 4 other bank accounts in a previous post about why you need Multiple Bank Accounts for Budgeting (click to read on my site) and not just checking and savings.
A Christmas account is a separate savings account specifically designed for holiday expenses. Many American households use this easy way to set aside money throughout the year, ensuring they have enough for end of the year celebrations.
Unlike regular savings that might tempt you to dip in for discretionary spending, a dedicated Christmas account helps you resist using the funds for other purposes. It’s a great time to start one in January, setting up automatic transfers each month.
This holiday budgeting tip helps prevent the stress of scrambling for funds when December arrives. Some banks even offer special interest rates or bonuses for these seasonal savings accounts.
Do banks still have Christmas Clubs?
Yes, many American households still use Christmas Club accounts, though they’re not as common as they were decades ago. According to the Credit Union National Association (CUNA), only 9% of people in America use a Christmas club savings account.
These special savings accounts remain a good idea for those wanting to set aside money for end of the year expenses.
Local credit unions and community banks are more likely to offer Christmas Clubs than large national banks. Most Club accounts work similarly to regular savings accounts but with a designated payout date before the holiday season. You can usually start one next year by visiting your local bank.
As a holiday budgeting tip, consider that while Christmas Clubs might offer lower interest rates than regular savings accounts, their structured saving approach helps many people stay committed to their holiday savings goals.
How can I save money for Christmas all year?
Saving money for Christmas throughout the year requires a simple but consistent strategy. Start by dividing your total holiday budget by 11 months, then set up automatic transfers to a dedicated savings account each payday.
Look for easy ways to build your fund, like saving spare change or banking any unexpected income. Setting up alerts on money-saving apps can help you spot deals year-round, letting you buy gifts when prices drop rather than during peak season.
Consider creative approaches like selling unused items or picking up occasional side gigs. Even saving just $20 weekly adds up to over $1,000 by December, making holiday shopping much less stressful.
How many people use credit cards on holiday spending?
Recent surveys show that roughly 65% of Americans use credit cards for their holiday purchases. This high percentage often leads to significant January debt, with the average person carrying over $1,200 in holiday credit card charges.
Most shoppers plan to use credit cards for at least part of their holiday spending, even if they have some savings set aside. Nearly one-third of credit card users take three months or longer to pay off their holiday debt, often paying substantial interest charges.
The trend of charging holiday expenses continues to grow, despite financial experts warning against this practice. Many people cite convenience and reward points as their reason for using credit, though cash spending typically leads to lower overall holiday expenses.
Need to spend more than you have?
Rather than go into debt, why not check out one of my most popular posts about 53 Ways to Earn Extra Money on the side? Just click that link to read it on my site.
Many don’t even require you to leave your house!
Why is going into debt for Christmas spending bad?
Let’s look at how debt robs you of your Christmas cheer!
Statistics courtesy of ValuePenguin. Credit Card interest figures courtesy of Bankrate.com’s calculator.
- The average credit card interest rate is currently about 16% (according to CreditCards.com)
- Let’s assume that your family only charges $800 for Christmas spending to that credit card
- Over 38% of households use credit cards already
- The average household carries upwards of $6,000 in credit card debt already (and that figure, on average, is much higher if you live on the east or west coasts in the US)
- So if you charge an additional $800 on top of the likely $6,000 you already have, your average minimum monthly payment could be as high as $442.
- Paying only minimum payments, it will take about 81 months to pay off the total debt (and that, of course, is ONLY if you quit charging new purchases)
- 81 months is almost 7 years!
- In that 7 years, you will not only repay the original $6,800 you borrowed but an additional $1,724 in interest!
- Putting aside the amount you charged, just investing that $1,724 instead of paying it for the privilege of borrowing money could earn you upwards of $3,359! (factored using an average of 10% growth over 7 years – compound interest calculator courtesy of moneychimp.com). You would almost double your money!
Of course, interest rates vary and are not guaranteed, so your actual results could be different – my point is to get you to realize just how bad an idea it is to use credit cards and what taking the same money and using it in a different way could do for you and your family!
Imagine what you could do with an extra $3,359!
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