The early creep of holiday decor can be maddening, but there’s at least one solid reason to begin planning for the holidays before the leaves change: it gives you more time to sock money away.
With holiday spending on the rise, that extra planning window can be a lifesaver for your wallet. The National Retail Federation reported that holiday spending climbed 5.3% in 2022, with U.S. shoppers dishing out an eye-popping $936 billion to celebrate.
Waiting until November or December to face these costs often means defaulting to credit cards and carrying balances — plus interest — into the new year. Instead, set up a Christmas savings strategy now to avoid debt and curb overspending.
6 Steps to Building Your Holiday Savings Plan
Unsure how to tuck away extra cash for the holidays? Try these six straightforward steps to get started.
Step 1: Begin With the Goal in Mind
To accumulate enough for holiday expenses, decide how much you want to spend overall and divide that by the number of weeks remaining until you plan to start shopping. That calculation tells you how much to set aside weekly to grow your Christmas stash. In personal finance, this is often called establishing a sinking fund.
Step 2: Create a Gift Roster
To determine your total savings target, list everyone you intend to buy for and estimate what you’ll spend on each person. Reviewing last year’s receipts can help, or research prices for the items you plan to purchase and add them up.
Step 3: Double-Check Your List
Heads up: your holiday savings should cover more than presents. Include projected costs for decorations, food and festive activities. From potluck contributions and gifts for your kid’s classmates to office Secret Santas and the holiday feast itself, these extras can inflate costs quickly.
How much for seasonal extras? Bottle prices vary by state but typically fall between $10–$15 per bottle. If you’re planning a big cookie batch, HelloFresh’s 2021 Christmas Cookie Price Index estimated ingredients run about $6.10 per batch.
Step 4: Do the Math
Add everything up and divide by the number of weeks until you’ll shop. Unless you enjoy last-minute runs, give yourself some breathing room before December 25.
To simplify, here’s how much you need to stash away per week over a 12-week period to accumulate between $200 and $1,000 for holiday spending. Statista reports the average U.S. shopper spent roughly $870 on Christmas gifts in 2022.
If your holiday fund goal is $450, you’d save $38 per week for 12 weeks. If you aim for $800, you’d need to set aside $67 per week for 12 weeks.
Step 5: Consider Setting a Cap
Another approach is to decide how much you can realistically save and build your holiday budget around that figure. For instance, if you can only put away $25 a week toward your Christmas pot, you’ll have $300 after 12 weeks — and that becomes your spending limit.
If you expect you’ll need more to cover all holiday costs and stay debt-free, start saving sooner to increase the number of weeks you have to accumulate funds. You can begin this Christmas savings routine at any point in the year.
Step 6: Keep Holiday Funds Separate
When you start saving, separate your holiday money from everyday funds so you don’t unintentionally dip into it. Use a sub-savings account at your bank or credit union and automate weekly transfers to maintain consistency.
If you prefer cash envelopes, dedicate one specifically for holiday spending — not for other short-term goals — and set weekly reminders to deposit the money.
2 Approaches to Help You Save for the Holidays
When saving over the short term, two core strategies can help.
Strategy 1: Reduce Expenses
Cutting back on routine spending is an easy way to free up cash for holiday gifts. Review your budget and mark nonessential recurring costs. Choose a few — such as takeout or salon trips — to pause until your holiday shopping is complete.
To accelerate savings, try a no-spend challenge or shrink your grocery bill by doing a pantry challenge and planning meals around what you already have.
Strategy 2: Bring in Extra Income
Saving more for the holidays isn’t only about spending less. You can boost your income temporarily with a part-time seasonal job (extra bonus if the employer offers discounts) or by taking odd jobs on platforms like Fiverr or TaskRabbit. Turn hobbies into cash by creating and selling handmade items on Etsy. And remember to clear out closets and sell unwanted items online to make room for new gifts.
How to Cut Costs on Gifts During the Holiday Season
Alongside a dedicated holiday fund, set a budget that’s comfortable for your finances.
Here are seven tactics to spend less this season:
1. Make Your Own Presents.
Get creative and craft homemade gifts for your loved ones.
Worried homemade feels cheesy? Check out our list of 100 Holiday Gift Ideas That Won’t Cost You a Penny for affordable, meaningful options.
2. Shop Early and Seize Sales.
Instead of waiting until your full fund is ready, use what you’ve already saved to buy bargains when they appear. Coupons make this strategy even sweeter.
Shopping early is wise, especially with ongoing supply chain hiccups. The old adage “time is money” rings true when popular holiday toys are in short supply.
3. Use Old Gift Cards.
It’s easy to forget leftover balances on gift cards. Hunt them down and check balances. Using those cards for presents frees up cash for other needs.
Can’t find the perfect purchase for a gift card? See tips on the best sites to sell gift cards and convert them to cash.
4. Redeem Credit Card Rewards.
If your card gives cash back or points, bank those rewards to help cover holiday purchases. Just use credit responsibly so you can enjoy a debt-free season.
5. Try the Four-Gift Method.
Limit the number of presents to keep costs down. The four-gift rule suggests giving each child something they want, something they need, something to wear and something to read — plus a little extra from Santa for younger kids.
6. Compare Prices Online.
Shop the web and compare vendors to find the best price. Some browser tools will do the comparison for you. Watch shipping fees when buying online; some retailers offer free shipping with no minimum.
7. Mark Your Calendar for Sales.
It’s easy to browse and forget to return for sale prices. Schedule reminders for major sale events, especially for high-ticket items like electronics.
Not all holiday deals are equal. Use our guide to the best times to buy everything to score the best bargains before Cyber Monday and Black Friday.
Jordan Hale is a senior writer at Savinly. Nicole Dow is a former senior writer.
