Everyone expects to add a few pounds over the holidays, but what about your wallet? Whether you’re treating yourself or gifting others, all those transactions can pile up into unwanted financial baggage.
Many Americans even end up carrying holiday-related debt. In 2017, those who tapped into debt for the season averaged more than $1,000, according to Magnify Money. That’s hardly festive.
Still, despite tempting promotions and social gatherings, you can absolutely get through the holidays without blowing your budget.
Laura Adams, host of the “Money Girl” podcast, put together eight tips to make the holidays cheaper so you can emerge from the season with less financial strain.
Ways to Make the Holidays Meaningful and More Affordable
1. Build a Holiday Giving Plan
Like Santa, you should make a list and check it twice. Jot down everyone you intend to give a gift to this season. Estimate how much you’ll spend on each person and total your gift budget. If the numbers look high, make adjustments.
Try prioritizing your list from must-buy to optional so you can identify where to cut costs. Consider inexpensive, thoughtful options like baked treats or handmade ornaments. Also include expenses for decorations, party outfits and potlucks in your plan.
2. Keep Your Values in Mind
The holidays can easily distract you from the financial objectives you set earlier in the year. To stay on track, set aside funds to keep chipping away at debt or add a bit more to your retirement savings. Keep your money goals visible — a sticky note on the mirror or phone reminders can help.
3. Shop with a Strategy
You’ve already set spending limits in your gifting plan. Bring that list with you while shopping. Better yet, leave cards at home and use cash in labeled envelopes for each recipient to curb overspending. If you run out, you’ll be forced to take from another envelope and avoid blowing your total budget since you won’t have cards to fall back on.
Shopping online can also help: it saves gas and dining-out expenses, and often reduces impulse buys. You can avoid shipping fees by bundling orders and earn cashback, rewards or Ebates.
Just be sure to only use credit cards if you can pay the balance in full — otherwise you’ll start the New Year with debt.
4. Say No to New Store Cards
That tempting $10 off at checkout when you sign up for a store card might seem attractive, but it’s typically not worth it. Store cards often carry high interest rates and trigger a hard inquiry on your credit, which can lower your score. Unless you shop that retailer frequently and can clear the balance monthly, politely decline.
5. Avoid Buying for Yourself
It’s tempting to pick up items for yourself while holiday shopping, but this habit can snowball into excessive spending. If you must buy something during the sales, set a firm limit on how much you’ll spend on your “treat yourself” item.
6. Get Creative
When we were broke teens, my friends and I made a holiday agreement: instead of exchanging gifts, everyone just showed up to a group dinner and paid their own way.
Applying a similar idea to holiday traditions can ease the financial burden for everyone. Consider a Secret Santa so you buy only one gift, have the family focus gifts on children only, set a spending cap, direct donations to a charity, or choose an experience like a getaway or a trip to an aquarium.
Switching traditions might create fresh memories and meaningful new rituals.
7. Keep Saving
Balance seasonal spending with ongoing saving. December 31 is the cutoff to max out annual 401(k) contributions, so factor any bonuses and holiday money before year-end.
Plan money goals for the coming year. Pledge to increase your retirement contribution by 1% or commit to paying off credit cards monthly.
Adams also recommends preparing for next year’s holidays by opening a dedicated bank account and depositing a little from every paycheck. That way you’ll already have the gift money when the season returns.
8. Practice Gratitude
Gratitude goes beyond Thanksgiving. Making gratitude a daily habit has demonstrated mental and physical benefits — and it can help improve spending habits.
Find something to be thankful for each day, even if it’s something small like clean air or your pet. Write it in a journal or jot it in your phone notes.
Alex Martin is a staff writer at Savinly. She’s keeping costs down this season by crafting handmade gifts. Read her full bio here or say hi on Twitter@StephBolling..
