How Can I Budget for the Holidays?

The holidays are a time for glad tidings and cheer. The holiday gatherings, festivities, and celebrations provide excitement and anticipation.  

Budgeting for the holidays helps you experience the joy of this festive season. Controlling your spending and staying within your means enable you to create memories with family and friends without financial stress.

The following strategies can help you budget for the holidays.

1.  Review Last Year’s Holiday Expenses

Consider your previous holiday spending to help set expectations for this year’s spending:

• Review your credit card receipts or bank statements to determine how much you spent the last few months of the year.

• Uncover where and when you purchased holiday items.

• Understand how you spent your money and what you want to change this year.

2.  Plan This Year’s Holiday Spending

Create a spending plan and make lists to track your purchases and avoid impulse buying:

• If you find a gift that exceeds your preset limit, determine whether you truly should purchase it.

• Consider how much the purchase would impact your overall spending.

• Analyze whether you could shift funds from another spending category to purchase the item.

• Remember that handmade gifts and meaningful experiences, such as a coffee date or a homemade dinner, can make the best presents.

3.  Categorize Your Holiday Spending Plan

Most holiday spending can be broken down into the following categories:

• Decorations: Understated holiday décor can create a festive ambience while maintaining your budget.

• Gifts: Consider what each person on your list would truly enjoy, such as a physical item, gift card, or experience. Limit the amount spent on each individual. Look for sales, markdowns, and discounts.

• Parties: Minimize the size of your gathering and the type of food and drinks you serve. Consider inviting close friends and family for appetizers and drinks with a holiday playlist in the background.

• Travel: You might need to budget for airfare, gas, and tolls. Save money by traveling on non-peak dates. Use rewards points and loyalty discounts to reduce your spending. Stay with family and friends to lower hotel and dining costs.

4.  Plan Your Holiday Meals

Purchase food as soon as possible to take advantage of holiday sales:

• Create a menu including traditional and new recipes.

• Make a shopping list to avoid impulse purchases.

• Shop sales and use coupons to reduce costs.

5.  Take Advantage of Rewards Programs

Shop at stores and use credit cards that offer rewards programs to lower your holiday expenses:

• Store loyalty programs offer discounts, rewards, and exclusive deals for increased savings.

• Credit card rewards include points or cash back for purchases.

• Pay off your credit card monthly to avoid interest charges.

6.  Use Cash or Prepaid Cards

Paying with cash or prepaid cards can help you stay within your holiday budget:

• Withdraw or load a specific amount to spend.

• Be mindful of your purchases.

• Avoid overspending when no money is left.

7.  Find Deals to Maintain Your Holiday Spending Plan

Determine where and when to purchase higher-cost items at lower prices:

• Research the prices for large purchases before making them.

• Take advantage of Black Friday, Small Business Saturday, and Cyber Monday sales.

• Look for payment options with 0% financing that you can pay in full before the interest charges take effect.

8.  Track Your Holiday Spending

Monitoring your holiday expenses helps you stay within your budget:

• Create a spreadsheet with each category and expense.

• Alternatively, use a budgeting app.

• Update your spreadsheet or app as you make purchases.

• See where your money is going.

9.  Save Early and Often

Break down your holiday budget into a manageable monthly savings amount. Set up an amount from each paycheck to be automatically deposited into your savings account to simplify the process.

*This information is for educational purposes only.