The holidays should be festive, not frightening for your finances. Simple budgeting and saving strategies can help you manage seasonal spending without taking the fun out of celebrating.
Holiday spending can add up quickly between gifts, travel, meals, parties and seasonal activities. Creating a holiday budget before those expenses hit can help you decide what you can comfortably spend, where you can cut back and how to avoid starting the New Year with financial stress.
Why is the holiday season so expensive?
Holiday spending often goes beyond gifts. Travel, meals, parties, clothing, decorations and seasonal activities can all compete for room in your budget at the same time.
- Travel to see family and friends
- Gifts for your loved ones, for Friendsgiving, Secret Santa or White Elephant party, and sometimes for yourself
- New clothes for that fancy party, an outfit for your holiday photos, or cozy new holidaythemed pajamas
- Someone saying, “But it’s [insert holiday name here]” every time you try to bow out of a purchase or event
Each of these things can be a great way to spend your hard earned money, but spending too much at once could make for a not-so-happy New Year.
How Can I Prepare My Budget for the Holidays?
Because you know that you’ll be tempted to spend more at the end of the year, take some time before the height of the holidays to prep.
1. Review your current budget. Review your existing budget (or make one if you haven’t already) and make sure it still reflects your current income and expenses.
2. Decide how much you can afford to spend. Identify the money you have available for holiday expenses without taking away from essential bills, savings, or other financial priorities.
3. Look for temporary ways to cut expenses. Consider pausing a subscription, carpooling to save on gas and parking, or cutting back on another discretionary expense for a month or two.
4. Create a separate holiday spending plan. Set spending amounts for categories such as gifts, meals, travel and entertainment.
How can I save money during the holiday season?
Even with the best budgeting and foresight, it’s still good to save a few bucks where you can. With that in mind, here are some ways to save during the holidays.
- Scale back on gifts. Maybe your family decides that only those under 18 or still in school get gifts from the adults. Arrange for a gift swap with friends so you’re buying one gift instead of many.
- Skip the restaurant. Suggest a potluck or picnic (if you’ve got the weather for it) instead of an expensive dinner out. If you’re the one hosting, pick a light brunch buffet or a cocktail hour rather than a sit down meal.
- Choose experiences over extravagance. Host a DIY night for your friends and trade items at the end so you all go home with a thoughtfully handmade gift. Take a walking tour of a decorated neighborhood with homemade hot cocoa. Do a photo scavenger hunt for the silliest holiday items you can find.
The holidays are about spending time with your loved ones and recharging your batteries. So pick serenity over anxiety and do things that make you happy without breaking the bank.
What if I need extra cash during the holiday season?
Depending on your skills, availability, and flexibility, there are many ways you can earn a few extra bucks during the holiday season.
- Do odd jobs like house- or pet-sitting for friends or coworkers who are traveling or working.
- Pick up shifts as a delivery driver from grocery stores, restaurants, or retail stores.
- Look for seasonal work at stores or restaurants in your area.
FREQUENTLY ASKED QUESTIONS
What makes the holiday season so expensive?
Holiday spending can include gifts, travel, dining, parties, clothing, decorations and seasonal activities. Because many of these expenses occur within a short period, creating a holiday budget can help you manage them without overspending.
How can I prepare my budget for the holidays?
Review your regular budget, decide how much you can comfortably spend and create separate limits for gifts, travel, meals, entertainment and other holiday expenses. Look for temporary expenses you can reduce to create additional room in your budget.
How can I spend less during the holiday season?
Set gift limits, organize exchanges instead of buying for everyone, host potlucks instead of restaurant meals and choose inexpensive experiences such as neighborhood light tours, movie nights or DIY gatherings.
What should I include in a holiday budget?
A holiday budget can include gifts, travel, meals, entertainment, decorations, clothing, charitable donations and other seasonal expenses. Include a small amount for unexpected costs as well.
What if I need extra cash for the holidays?
Seasonal work, delivery shifts, pet-sitting and other temporary work may provide additional income. If you’re considering borrowing, review the interest rate, repayment terms and monthly payment before deciding whether new debt fits your budget.
