Ah, the holidays—the season of comfort, joy, and spending copious amounts of money on flights, hotel rooms, celebratory dinners, and lots and lots of presents. Between inflation, the lingering impact of COVID, and a potential recession, many of us are tightening our purse strings this holiday season. However, budgeting during the holidays doesn’t mean staying home and skipping out on the fun. Here are six budgeting tips to help you enjoy the holiday season without blowing through your entire savings account.
1. Review your finances
Before making any holiday-related decisions, take a minute to check in on your finances. How much are you spending on a regular basis? How much are you saving each month? Are you investing or maxing out your 401K? Are you meeting whatever other financial goals you’ve set for yourself? Understanding your general financial well-being is a great habit to get into. It will help you be realistic about how much you have to spend this holiday season.
Pro tip: Savings accounts like Ally Financial allow you to bucket specific savings goals. Starting a bucket for the holiday season can give you peace of mind ahead of time—and a few extra dollars from the accumulated interest.
2. Check your credit card
Credit cards are often underutilized. Yes, you can charge purchases to your account, but credit cards often come with other great benefits. These can include cash back, bonus points, and more. If you already have a credit card, do a thorough scan of what your card offers. You might be able to book cheaper travel arrangements or utilize your cash back, points, or miles for flights and hotels. If you’re in the market for a new credit card, do some research to find one that’s the right fit for you. There are often sign-up bonuses like flight credits or free nights at certain hotels that might come in handy this holiday season. Just make sure you double-check any blackout travel dates before making final decisions.
Pro tip: Not enough points yet? If you play your card right (see what I did there?) and spend enough now, you might be able to save up for your next trip home.
3. Make a list and check it twice
When it comes to gift-giving, it’s easy to get caught up in the holiday spirit and overspend. That’s why setting a budget beforehand is crucial. To help you stay within your budget, list out the primary people you intend to buy gifts for, as well as the amount you want to spend on each person. Family and close friends might take up more of your budget, while more casual connections like neighbors and colleagues could cost a bit less. Add up the total and make sure it’s an amount you’re comfortable spending. If not, rework your math until you get to a more reasonable amount.
Pro tip: Leave a little wiggle room in the budget for one or two extra gifts just in case something pops up—even if that something is a gift for yourself that you saw while shopping and can’t stop thinking about.
4. Shop the sales
As a Midwesterner, I love a good sale. After inventory issues during the pandemic, a lot of stores are now overflowing with too much product and are slashing prices to clear things out. This is on top of standard seasonal sales like Black Friday, Small Business Saturday, and Cyber Monday. Whether you’re looking for more affordable gifts or new additions to your holiday wardrobe, these early-season sales will often get you good prices on bigger ticket items you’ve been eyeing.
Pro tip: Domestic travel has been a bit steep lately, but sometimes flights go on sale too. Apps like Hopper can help determine the best time to book travel arrangements without breaking the bank.
5. Reduce, reuse, and recycle
It’s important to acknowledge the holiday season can feel consumerism-heavy, but it doesn’t have to be, especially when it comes to gifting. While gift-giving is definitely some people’s love language, it’s always the thought that counts. This year, make a donation to a good cause in their name. Save a few dollars with unique thrifted items, regifted items like books you loved, or DIY gifts based on your hobbies. You can get creative with your wrapping, too. All those Trader Joe’s runs? Repurposed Fearless Flyers and TJ’s brown paper bags make excellent gift wrap.
Pro tip: Even though you might want one, you don’t need a completely new outfit for every work party, family dinner, and holiday celebration. Try building new looks out of things you already own, adding a new trendy piece here and there to bring a fresh feel.
6. Go gift-free
At the end of the day, the holiday season isn’t about the physical gifts we give or receive. It’s about the quality time spent with our loved ones, and the memories made together. Instead of spending on presents, use that amount (or ideally less) to create fun experiences. Go ice skating with a bunch of friends, have a cozy holiday movie marathon, raid each other’s closets, or paint each other’s nails instead of going to the salon. Make kits for those in need, host a book or cookie exchange, try new holiday recipes, make seasonal cocktails at home, or host a fun PowerPoint party. Gifts are great, but memories last a lifetime.
Pro tip: Talk about your finances. You probably aren’t the only one with money on your mind. Don’t be afraid to ask your friends and family about creative ways they’re saving this holiday season!