Budgeting Tips for the Holidays: 8 Tips to Control Holiday Spending

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Keep your finances on track with these budgeting tips for the holidays!

The holiday season is quickly approaching! The holidays are often filled with gifts, travel, parties, and indulgence. It’s so much fun, but also can be financially stressful and wreak havoc on your budget. Budgeting during the holidays may not sound fun, but it’s important to keep your finances on track.

Have you managed to stay on track with your finances all year, but now feel overwhelmed with approaching holiday season? With a bit of planning and some creative ideas, you can keep your holiday spending under control. The holiday season doesn’t have to throw your budget off.

This post is all about budgeting tips for the holidays!

Best Budgeting Tips for the Holidays

1. Create a Gift Budget

If you read my blog regularly, you know I’m a big fan of budgeting (read my post on How To Make a Monthly Budget here). It’s the best way to reach your goals and stay accountable, while still making room for all the things that bring you joy.

During the holidays, budgeting is even more important as your expenses increase! A huge expense for many during the holidays is gifts. Gifts for friends, family, significant others, co-workers… the list goes on. It’s easy to go overboard if you don’t allocate a specific budget for gifts.

Write down a list of everyone on your gift list, and a maximum cost for their gift. It’s OK to set limits, you don’t have to have an unlimited budget for everyone on your list. Keep your gift budget in mind when you go out shopping.

2. Plan for Extra Holiday Expenses

One of the biggest budgeting mistakes people make is not thinking about unusual or infrequent costs (read more on my Common Budgeting Mistakes post).

When you think of costs during the holidays, gifts is a major one that most people think of. But beyond just gifts, you should also budget for other expenses that tend to pop up during the holidays! A few extra holiday expenses you can expect (and should budget for) include things like:

Decorations
Eating out more frequently
Hosting guests/parties
Travel/transportation

These extra costs can really add up. Take a look at last year’s spending, and note potential expenses ahead of time so you can prepare for them and include them in your budget. The holidays come every year, so don’t get caught off guard by a bunch of extra expenses during this time.

3. Start Saving Early

To me, this is one of the most important budgeting tips for the holidays! Once you have a budget, you will have a good handle on how much the holidays will cost you this year. But that money doesn’t just magically appear out of nowhere. You have to plan for how you will pay for all your holiday expenses, while still managing your regular day-to-day costs. Consider some options to fund your holiday budget:

Could you set aside money for a few months before the holidays? For example, if your holiday budget is $1000, you could put aside an extra $250/month starting in September so you don’t have all the extra costs at once. The longer the time frame you give yourself, the less overwhelming it will be!
Could you cut back on a few expenses leading up to the holidays and put that money towards your holiday budget? For example, if you normally budget for $150 per month of eating out, try reducing that to $50 and put the extra $100 into your holiday budget.
Could you earn some extra money during the holidays? For example, can you pick up a few extra shifts at work? Or could you sell some items around the house you no longer use/want?

4. Take Advantage of Sales & Promotions

If you’re shopping for gifts or other holiday items, some of the best deals happen around Black Friday and Cyber Monday. You certainly don’t have to buy everything at this time (it can be overwhelming), but it’s a good time to buy some big-ticket items!

Remember: as always, make sure to go in with a plan of what you need to buy, so you don’t get caught in the trap of buying something just because it’s on sale!

The holidays are also a great time to take advantage of promotions like cashback rewards or programs! If you don’t already have Rakuten, now is the time to download it!! I’ve earned almost $60 in cashback since I downloaded it a few months ago. Basically, it’s a free website that gives you cash back when you shop at affiliated stores. Plus right now there’s a promotion that will give you $30 when you make your first purchase of $30 or more (sign up through this link). You’re already spending money on gifts, so why not get cash back?

One of the best holiday shopping tips is to shop strategically. For example, the best time to buy holiday decorations like a Christmas tree or wreath is actually after Christmas! Stores try to clear their inventory to make room for the next products. So, if you can think ahead, buy things you need at off-peak times.

5. Stay Local

The holidays are a notoriously expensive time to travel (not to mention SUPER busy). Flights, hotels, and experiences will all have prices hiked because it’s peak season.

Staying home during the holidays is a great way to save money, and get some quality time with your family! Plan some fun activities in your local town like:

Organize a family skating night
Drive around to look at Christmas lights
Play board games
Go on a family walk
Have a hot chocolate & movie night
Watch home videos together

There’s so many great ways you can celebrate the holidays at home and make amazing memories. Or, if you do decide to travel, make sure to book early to avoid last-minute markups.

6. Do It Homemade!

Making something at home is almost always cheaper than buying it out. Plus, especially during the holidays, people always appreciate something that’s homemade! Here’s a few things you can make at home over the holidays to save money:

Gifts – some of the most memorable gifts I’ve given have been homemade. Get crafty and make homemade ornaments, bath bombs, or scrapbooks! Even a simple homemade card goes a long way.
Cook at home – if you find yourself eating out a lot during the holidays, pick out a few recipes like cozy soups or easy slow cooker meals that you can make at home. It’s a fun activity, and will save you tons of money on food!
Host/hostess gifts – instead of bringing fancy napkins or a bottle of wine to a holiday party, bake cookies or ask if you can bring a homemade appetizer to the party!

7. Don’t Be Afraid To Say No

Don’t be afraid to no if something is outside of your budget! There’s no holiday party, gift, or trip that’s worth going into debt or financial trouble for.

You can also suggest alternatives to make activities more affordable. Are your friends going out to a super fancy restaurant that you can’t afford? Suggest an at-home dinner party potluck-style! Or, in my family we recently started doing Secret Santa. Instead of buying a gift for everyone in the family (there’s 5 of us plus significant others now!), we draw names and buy for one person.

8. Remember The Purpose of the Holidays

At the end of the day, remember what the holidays are all about – it’s about spending time with family and loved ones, not out-doing each other with the fanciest gifts or, going on the most luxurious vacation, or having the most Pinterest-worthy home decor. “Keeping up with the Joneses” can be totally detrimental to your mental health, AND your budget.

To enjoy the holidays, try to steer clear of comparison. It’s easy to get caught up in another family’s photos on a beautiful beach while you’re at home in a blizzard. I’m also definitely guilty of thinking to myself oh my gosh, that person spent $200 on my gift and I only spent $50 on them!! I need to buy more! But in reality, none of this matters. Don’t let comparison to others take away from your enjoyment of the holidays or make you feel like you need to spend beyond your means.

This post was all about budgeting tips for the holidays!

Budgeting Tips for the Holidays: 8 Tips to Control Holiday Spending