Unwrapping the Savings: 4 Tips for Saving Money During the Holidays

While the holiday season is full of joyful celebrations and giving, it’s painfully easy to go overboard – and over budget – with the holiday shopping.

After all, all those boxes and bows (plus the things that go in them), festive decorations and elaborate feasts come at a price. If you aren’t mindful about your spending, you can end up depleting your cash or maxing out your credit cards. 

The sooner you start your holiday shopping, the better. Procrastination usually ends in a mad rush to the finish, which can trigger stress and impulse buying. If you want to avoid the financial “holiday hangover,” there are some practical ways that you can navigate seasonal spending while still keeping your piggy bank intact.

1. Set a Realistic Budget

You can’t control your spending without a budget. Take a deep dive into your financial situation and look at how much cash you can reasonably siphon away from other expenses. You don’t want to skip the mortgage payment to fund your celebrations, of course, but there’s nothing wrong with prioritizing a few holiday gifts over dinner night with your partner when you’re counting your dimes.

It’s the little things that can add up fast, so don’t forget to include them in your budget. If you’re traveling for the holidays, make sure you factor the cost of the trip into your plan. If you absolutely must have a new outfit for the big family gathering, add that in, too. Can’t imagine not sending holiday cards to your extended family and friends? It’s okay to spend your money however you want – but be conscious of where your dollars are allocated and prioritize.

Ideally, you want to only use ready funds – not your credit cards. If you do plan to use your cards (which happens to the best of us), make sure that you use them as minimally as possible and have an actual plan for how fast you can pay them back off. This will keep you from having “buyer’s regret” once the season is over.

2. Create a Detailed Wish List

Just like Santa, you need to make a list and check it twice – only you’re not worried about who has been naughty or nice. 

If you tend to be generous of spirit (and wallet), you may need to trim back your gift list a little. Here are some ways to do it:

• Prioritize your relationships: If you can realistically only afford to buy gifts for your immediate family, that’s okay. Just let people who might normally expect to exchange token gifts with you know in advance that you’re working on a stricter budget this year. (And remember: Everybody is watching their expenses these days. Those you cull from your gift list may be just as relieved not to have the extra expense on their end, too.)
• Don’t make it a competition: Maybe your big sister has become a big success – and delights in giving extravagant gifts to her loved ones. That’s totally cool! However, if you’re in a different place in life and are struggling to pay off your student loans or trying to save for a home, remember that you don’t have to match her gifts dollar for dollar. With the people who truly love you, it really is the thought that counts.
• Suggest a gift exchange plan: If you have a large extended family, ask if you can skip the individual gifts for every aunt, uncle, sibling, niece, nephew and cousin and do a Secret Santa exchange instead. Websites like Elfster can make it easy to draw names and let participants create wish lists, making it easy to manage.
• Try a group gift for special people: If several friends or family members are willing, pool your funds for any special gifts that you know somebody wants. For example, if you know that Mom would love a new flatscreen TV much more than she would prefer more pajamas and sweaters, give your siblings a call and see if they’re all game to go in on the gift together.

If you still feel a little “grinchy” not getting something for the neighbor who gets your mail while you’re gone or your office bestie, consider a DIY project that’s largely symbolic. Homemade cinnamon ornaments are festive and cool, and a crocheted scarf is always useful. Even a plate of gingerbread cookies can show your love and appreciation for your friends.

3. Shop Smart and Take Advantage of Sales

The key to savvy holiday shopping is preparation. With your list in your hand, be on the lookout for discounts and promotions. Remember, too, that while Black Friday and Cyber Monday can offer substantial savings, a lot of companies offer deep discounts much earlier. 

Here are some additional ways to take your shopping savvy to the next level:

• Do most of your shopping online. It’s easier to get off track and give in to impulse purchases when you’re in a physical store.
• Make use of coupons and discounts. This is where your credit cards can come in handy – especially if you have the kind of cards that offer you cash back on purchases or discounts at certain stores (just use them judiciously).
• Pause before your purchase. If you put something you like in your online shopping cart and then let it sit without checking out, it’s not uncommon for stores to offer you a little extra discount to complete the transaction. If you’re not in a time crunch, give it a try and start watching your email for an offer.

If your holiday plans involve travel, explore cost-effective options. Be flexible with your travel dates, look for discounted transportation options and consider alternative lodging arrangements, like staying with your friends or family instead of in a hotel.

4. Reevaluate Traditions and Make Some Changes

While traditions can hold sentimental value, they sometimes become a burden when they’ve outlived their function. If your holiday traditions contribute significantly to your holiday expenses, it’s time to take a new look. 

Evaluate whether certain traditions can be adjusted or scaled back without compromising the essence of the season. Sometimes, simplifying traditions can lead to a more meaningful and enjoyable experience. For example:

• Host a potluck: Instead of trying to afford the big family feast on your own, decide that you’ll provide the main dish and a few sides, and ask everybody else to bring something they’d like to see on the table. Not only does this make the big holiday gatherings more affordable, but it adds to the communal spirit that’s so important to the season.
• Make use of free or low-cost events: Instead of spending a fortune to get pictures with a mall Santa, look for low-cost holiday events all around you. There are light displays galore, parades and Christmas tree shows that are totally free. Check your local event calendars with your calendar in hand and embrace the holiday spirit without worrying about hefty price tags.

Navigating the holiday season on a budget requires a little planning, some creative thinking and a real commitment – but you can do it! By setting a realistic budget, creating detailed lists and making careful choices, you can revel in the joy of the holidays (without creating a January burden on your finances).