8 Ways to Stay On-Budget During the Holidays

The holidays will look a little different this year, but that doesn’t mean that money issues will magically be a moot point. The holidays are prime times to overspend, not stick to a budget, and treat yourself a little too often.

It’s also time to stress about how much you should spend. Will someone think you’re cheap or love them less if you don’t share a gift that’s worth a certain dollar amount? Then, there’s the pressure to give a gift or visit everyone - which isn’t feasible during the best of times, but is definitely going to come under question right now.

But of course! We want to share gifts for a socially-distant gathering with our closest family and friends. It’s the season of love and joy and togetherness. Use these tips to stay on budget and still feel like you aren’t depriving yourself or your loved ones this holiday season. You can also take a look at all of my holiday posts for even more inspiration for holidays on a budget!

Set Holiday Spending Limits

One of the top tips on any financially-empowering blog post about budgeting for the holidays is sure to be some variation of having a spending limit. And for good reason! It works! You will spend as much as you have to spend.

Here’s the catch: in order to reduce the pressure to find the right present at the right price, make sure everyone is on board with a gift budget. See, it’s one thing to say that you’re going to be spending $20 on each person, but if Auntie Julie, who has a large disposable income, passes out presents in the hundreds of dollars, it’s a recipe for hurt feelings and stress-eating whipped cream in the pantry. And no one wants that.

Of course, at the end of the day, only you can control what you spend. If you can’t get everyone to sign off on the spending limit agreement, this is the time to enforce your boundaries with a polite conversation, like, “I understand if you want to give and spend freely. That is thoughtful. However, to ensure I am honoring the financial goals I set for myself, I have allotted $100, or $20 per person, to gifts, and that’s all I am willing and able to spend.” Polite and clearly states your position and why it’s important to you.

The Takeaway: Set a holiday spending limit with friends and family and try to get everyone to sign off on it so you’re all in agreement or at least aware of the budget plan.


Only Shop for the Kids

Let’s be honest, adults typically will buy what they want or need. So with the holidays comes a lot of extra money spent on unwanted or unneeded gifts. A great way to keep your holiday budget in check is to keep the magic alive for the kids and save the money that you’d spend on the adults. In other words, only shop for the kids.

If there are a lot of kids in your family, you could pull names from a hat of who is giving a gift to whom or play a game like secret Santa to keep the gifts (and money spent) at a minimum.

The Takeaway: Keep your holiday budget in check by reducing the number of gifts you give when you only share presents with the kids in your family.

Use Cash-Back Sites like Honey and Rakuten

We’re all shopping online this holiday, so take advantage of cash-back sites like Rakuten. It’s a simple plugin that you install in your web browser. Click on it when you visit a site to start recording cash back.

Honey is also another handy tool. It will check each site for active coupon codes that you can apply at checkout. If no codes are available, Honey will track your order on most sites and give you points that you can later redeem on gift cards. Another handy feature of Honey is the Droplist. It tracks your favorite items and alerts you when the price drops.

The Takeaway: You know you’ll be spending money online. Make your money work harder for you by signing up for sites that provide cash back when you shop.

Budget for Everything this Holiday

Santa isn’t the only one who makes a list and checks it twice! Avoid impulse purchases on everything from holiday meals to gifts by making a master list of what you’re buying, for whom, and where you have seen the best price. Yes, this is a job for a spreadsheet, although you could use the notes app on your phone or even your paper planner and bill tracker.

This helps take the emotion out of the holidays and keeps you on budget. When you see something for sale on your list, you can grab it. Being organized this way also ensures you’re not buying extra presents for one person and then have to compensate by buying more for the others.

The Takeaway: Make a list of absolutely everything and reference it often to ensure you’re staying within your holiday budget and projected spending.

Start Shopping Early

Another way to avoid impulse purchases this holiday is to start, and finish, your shopping early. Large stores have already had sales running for weeks, so take advantage of it and the reduced crowds and pressure — not to mention the crush to wrap and mail in a short period of time!

And, now that you’ve organized a master list of recipients and holiday purchasing needs, you can use it next year to begin looking for steals on gifts, baking supplies, and more well before everyone else even begins thinking about “Black Friday Sales”.

The Takeaway: Organize yourself so you can start shopping early to find great prices on special items for your gifts and other holiday needs (baking supplies, mailing needs, etc).

Set Expectations, Especially with Kids

There is nothing worse than a child who keeps demanding more and isn’t appreciative of what they were given. Especially if you’ve been lavish with presents in the past but must pull back this year, telling kids up front will allow them to know what to expect. This will help keep gift-giving guilt in line and give kids the opportunity to be involved in early discussions about money, goals, and financial security.

Additionally, now is the time to talk to your friends and family about a spending limit or doing away with purchasing gifts altogether. Having this conversation with them will help mitigate hurt feelings and that awkward, “I gave you a really nice bottle of wine and all I got was a pumpkin pie?” look when you present someone with a thoughtful yet budget-friendly gift and they went a bit bigger.

The Takeaway: Similar to discussing a spending limit, set expectations with your kids about the holidays and what they can look forward to when it comes to presents, a budget, and gracefully accepting gifts.

Follow This Rhyme

If you’re stumped with what to give a close friend or family member, follow this rule: Something to wear, something to read, something they want, something they need.

It’s particularly helpful when it comes to children. How many times have you asked your kids, “What do you want this year?” and you were given a laundry list of toys, clothes, and things that use way too many batteries? Follow this rhyme to cut down on the number of things you need to buy. It’ll keep your holiday budget per kid in line and ensure no one is getting more than another kid.

The Takeaway: Use this rule when giving gifts to your kids or close friends and family: Something to wear, something to read, something they want, something they need.

Swap Instead of Shop

I love Facebook Marketplace. There are tons of gently-used items that are a great price. You can also ask your kids to pull out some toys they don’t use and, along with any household or clothing items the family gathers, hold a neighborhood or family swap. It’s a great way to find new-to-you items without going over your holiday budget. This also encourages kids to give to others and keeps their toy bins in check!

The Takeaway: Host a family or neighborhood swap instead of giving gifts or as a way to find unique gifts to give to others without going over budget and keeping the planet happy!

At the end of the day, it’s natural to want to give, especially to those who mean a lot to you. That said, Americans spend a lot of extra money during the holidays. Some websites show $800 extra and others show $1,000+. Even $800 on a credit card with a $35 minimum payment and 15% APR would take 28 months to pay off and accrue $149 in interest. That’s a lot of money that could be used wisely elsewhere.

I hope these tips help you stay within your holiday budget and keep your eyes on the financial security prize waiting for you when you don’t overspend! Do you have any tips for staying on budget during the holidays? Share them in the comments!


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