The holiday season can be such an exciting time to celebrate, enjoy delicious meals, exchange gifts, travel, and attend special events. It’s also one of the most expensive times each year. Don’t worry, we have real ways to save money this holiday season.
According to the National Retail Federation, American households spend an average of $890.49 on gifts and holiday-related expenses.
The holiday season can also be a time when households experience financial stress and feel the pressure to overspend on credit cards or even take out loans.
But there are better ways to save money on your regular holiday spending so that you don’t go broke.
Here are 13 real, practical tips to help you celebrate well, give generously, and enjoy the season without starting the new year in debt and financial stress.
1. Set a Realistic Holiday Budget
First, it’s crucial to set a realistic holiday spending budget. If you don’t want to spend $1,000+ on gifts, parties, and events, you don’t have to. Narrow down a realistic amount that feels comfortable to you, and then work backward from there.
It can also help to create a per-person gift budget so you know who you plan to get gifts for and how much you’d like to spend. Don’t be afraid to remove certain purchases and items from your budget if they’re not high on your list of values.
For example, if you’d love to see a holiday show in the city, start budgeting and planning for it now. If you don’t want to exchange gifts with coworkers and want to stick to free holiday events, like your local town’s tree lighting ceremony, honor this decision when creating your budget.
2. Start Saving in Advance
Once you set your holiday budget, start saving up early to avoid financial stress when the holidays are in full swing. Some people save up year-round, while others start a few months before December, so it’s totally up to you.
Consider setting up automatic transfers and stashing away a little extra money at a time. It all adds up. You can also start funneling money from side hustles and extra gigs, whether it’s from mystery shopping, selling items online, or a flexible part-time job.
3. Start Shopping Earlier
When you save earlier for the holidays, you can start shopping earlier too.
Shopping earlier has its perks because you can take advantage of several pre-holiday sales and deals. You can also stock up on clearance items from the previous season if you find something that checks off an item from your gift list.
By October, fall items start to go on sale, and retailers roll out more holiday gifts and decor, so you can start shopping early and slowly to avoid impulse purchases. You can find good discounts on various things by Thanksgiving, including Black Friday and Cyber Monday deals. If you limit yourself to shopping only during the two weeks leading up to Christmas, for example, you won’t have much wiggle room to take advantage of certain sales or shop around for the best deal.
4. Compare Prices Before Buying
Don’t assume Black Friday, Cyber Monday, or a “holiday sale” automatically means you’re getting the lowest price. Be sure to shop around for certain items that are on your list. Retailers love to compete with each other, so you can use tools like Google Shopping to compare prices and options during the holiday shopping season.
Cash back sites like Rakuten can also be helpful. With Rakuten, you can earn cash back on purchases at several retailers, and the site even checks for coupons that you can apply to your purchases as well. Using the Rakuten Google Chrome extension adds convenience, so you don’t have to think about it.
5. Use Credit Card Rewards You’ve Already Earned
The holiday season is a great time to see if you have any credit card rewards to cash in. Whether you have cash back or points you can convert to cash or gift cards, using a rewards credit card can be a great way to save on holiday purchases.
Some credit cards even have shopping portals where you can cash in rewards for exclusive deals on products or unique experiences.
Just be careful not to let rewards encourage you to spend beyond your holiday budget. Earning a few dollars in cash back while carrying a high credit card balance will cancel out any rewards you may think you’re getting.
6. Get Creative and DIY Some Expenses
DIYing what you can for the holidays is another practical and realistic way to save money. In fact, this could double as a fun family tradition or experience you can cherish. Maybe that looks like baking holiday cookies with your kids for their teachers and your in-laws. Or it could mean making a large batch of homemade soap or bath salts to give your friends and family.
It could also look like making crafts that double as holiday decor. Decor prices seem to rise each year, so instead of spending $30 to $40 on a Christmas wreath, you can DIY one instead.
7. Set Up a Secret Santa or Gift Exchange
Secret Santa gift exchanges can be fun and budget-friendly when planned well. If you have a lot of family members, this is a great way to exchange gifts without overspending or getting overwhelmed. You can also consider this option with a group of friends or coworkers.
Set a realistic spending limit, such as $30, and make it fun by bringing games and having each person bring a food item, drink, or dessert to share.
8. Prioritize Giving Experiences
The holiday season is not all about gifts and spending money. It’s also a time to relax and enjoy time with your loved ones.
Prioritize experiences over buying a big gift and spending lots of money. This could look like having a Christmas movie marathon and baking treats at home, driving around to look at holiday lights in the area, or having a board game night and potluck with friends.
You can also gift experiences, such as a local class, an annual pass to a museum or zoo (that may be on sale during the holidays), or a restaurant gift card.
9. Shop Secondhand
Sometimes, the best deals for your wallet aren’t on the clearance rack or even on Black Friday. Instead, you may find the best luck shopping secondhand. Consider gently used items for gifts like toys, books, clothing, collectibles, and even refurbished electronics.
Review your gift list and choose a few items that you may want to shop for at a secondhand store or even through reseller apps like eBay, Poshmark, or OfferUp. For example, if you want to buy your child a bike for Christmas, you may be able to save a ton of money by finding one that’s gently used. Plus, you won’t have to go through the trouble of assembling it.
10. Limit Stocking Stuffers
Stocking stuffers can get surprisingly expensive because it’s easy to make impulse purchases or feel obligated to fill each person’s stocking with a ton of stuff. Don’t fall for this common spending trap.
Instead, be intentional with stocking items just like with your main holiday budget. You can limit it to five or six items total and focus on things that your family actually wants or needs. Also, take advantage of coupons, grocery store deals on candy, and affordable deals on items like socks, personal care items, notebooks, etc.
11. Reuse Decorations
Resist the temptation to buy completely new decorations each holiday season. Instead, save what you have to reuse each year. Then, add a few select new items each year.
Just be intentional with decorations and remember you can also find nice options at dollar stores and discount stores.
Another smart idea is to set aside a small budget for the end of the holiday season so you can shop post-Christmas sales, when retailers sell decor at deep discounts to clear inventory. Stores like Hobby Lobby have great deals on holiday decor, including 50% off sales that last for several weeks.
12. Save on Holiday Meals
As food costs have risen over time, holiday meals have become more expensive. This is especially true if you host Thanksgiving or Christmas dinner or host a holiday party.
To save on holiday meals, start planning your grocery list in advance. Check the weekly ads at different grocery stores and take advantage of coupons at stores like Kroger, which lets you clip coupons digitally.
It may also help to split menu items among guests and family members. If you’re hosting, maybe you can pay for and prepare the entree, then have guests bring sides, drinks, and dessert. If you have a Sam’s Club or Costco membership, it may be cheaper to buy items like snacks, dessert trays, drinks, or plastic silverware in bulk.
13. Plan Holiday Travel Carefully
If you’re traveling for the holidays, this may be one of your biggest expenses. For flights, tools like Google Flights can help you compare fares and track prices. Having some flexibility with your departure and return dates can also help you find better travel deals.
If possible, driving is usually more affordable than flying, especially if you will be traveling with other family members. If you need to rent a car, consider sites that shop around for different rates like Expedia or CarRentals.com. If you have credit card rewards, this might be a great expense to cash them in on.
Pack food and snacks for your trip to limit stops and avoid spending extra money. If you’re shipping gifts to your destination, consider shipping costs as well. One easy option is to use Amazon Prime’s free two-day shipping if you order anything on Amazon.
Summary: Save Money This Holiday Season
As you can see, there are several ways to save money this holiday season without sacrificing your favorite traditions, gifts, or events. Start by clarifying your goals and priorities for the season and examining your budget. Then use some of these ideas to manage your money wisely.
A little planning now can make January much easier on your wallet, so you won’t have to worry about credit card bills and other debt. And once the season is over, you can start a small holiday savings fund for next year so you’re even more prepared when the holidays come around again.
