Alice Stevens

Last Updated: September 23rd, 2021

Because the holiday season is often about gathering friends and family, enjoying special meals and treats together, and exchanging gifts, it can be easy to overspend.

To keep your spending in check, follow these tips to lower your holiday expenses and keep your budget feeling jolly:

  • Set priorities
  • Be selective and intentional about your traditions
  • Plan ahead
  • Find savings
  • Track your spending
  • Avoid debt

Set priorities

Think about what matters most to you during the holidays and consider what makes the holidays fun for your immediate family.

Is it the food? Time spent together? Decorations? Serving others?

Once you’ve narrowed it down, think of ways to focus on those parts of the holiday and reduce focus on other aspects. This way, the money you do spend over the holidays will contribute more to what matters to you and to your immediate family.

pine cones, red berries, mug of cider

Be selective and intentional about your traditions

If you’re just starting to create holiday traditions with friends and family, be thoughtful about what you really want and how these traditions may affect you in the future. Start simple traditions around the parts of the holidays that matter most to you.

You can also start traditions that help you off-set holiday expenses. For example, Kate Raidt, founder of Kate Raidt Sales Coaching, has an annual yard sale.

“Every year in November or December, we have a yard sale. It's amazing in one year how much the kids outgrow. We make $500–$1,000 every year selling stuff that has collected dust,” she says.

If you already have holiday traditions, take some time to evaluate them. Which ones do you enjoy most? Are there traditions that your partner or kids value? See what you can do to adjust or reframe your holiday traditions to make them easier on your finances.

For gift exchanges, try setting limits or limiting who you exchange gifts with.

Logan Allec, personal finance expert and owner of of Money Done Right, suggests, “It’s often made fun of in movies and TV, but a gift limit with your loved ones is a win-win for everyone.

Without a gift limit, it’s easy for someone to accidentally over-spend. Not only will this make the other people feel bad for not buying as nice of a gift, but you can quickly end up spending a significant amount of money.

Instead, talk ahead of time to agree with everyone on a limit for your gifts. Whether it’s $10, $20, $50, or more per person, you all will now have the freedom to buy an affordable gift.”

You can also talk to relatives and friends about alternatives to gift giving, like spending time together.

Holly Wolf, the Director of Consumer Engagment for SOLO Laboratories, Inc., says, “Most people are agreeable to not exchanging gifts if you approach it kindly. Suggest that you spend time together rather than exchanging gifts.”

wrapped gift

Plan ahead

Planning ahead for the holidays includes organizing activities with friends and family. As you plan for holiday celebrations, be sure to include a financial plan by budgeting.

Your holiday budget should include all holiday-related expenses — travel, food, gifts, decorations, and anything else you buy specifically for the holidays.

“If you set an overall spending limit first, you can then decide how all of your different costs will fit into your budget. Furthermore, this will help you define what overspending truly means and discover cost-saving options,” advises Chris Terschluse, head of Marketing and Content for Chime.

If you want to set aside money for the holidays throughout the year, that can help you have a larger budget and a little more wiggle room.

“Start by making a list of the food you think you'll serve and what items you'll need to buy. Add other holiday costs to the list, such as decorations and gifts.

Once you have a rough budget, total it and divide it by eleven. Start saving money each month, starting in January, to be used for your holiday expenses. As the holidays approach, you'll be ready with enough money saved to pay for holiday expenses without going into debt,” suggests Deacon Hayes, owner and founder of

The amount and frequency is up to you and should be based on what’s feasible with your regular budget and how much you’d like to have for holiday spending. The most important part is to be consistent.

If you’re planning ahead, you can also try to spread some of the costs throughout the year so that they don’t all hit at once.

Shopping early can also help you save money on last-minute mark-ups. “When you finish your holiday shopping early, you won't have to pay extra for either the item or the shipping simply because you waited to shop until the last minute,” says Hayes.

You should make travel-related purchases early because those prices increase around the holidays.

“Airlines, car rental agencies, trains, and every other form of transportation dramatically increase prices around the holidays.

Even gas stations raise prices as they know that people will pay whatever they need to in order to get home and see their families.

As a result, the best way to save here is to end up booking your travel as early as you can.

This way, you can save money and ensure that you’ll still make it home for the holidays,” says Allec.

Depending on your shopping habits, it may actually be best to put off shopping as late as possible.

Anne Keery, Unique Gifter owner and editor, says, “Lots of people, myself included, love to find the perfect gift... and then the next perfect gift, and the next. By the time Christmas rolls around, I'll have found six perfect gifts for one person and be wildly over budget. Start shopping later, so that you don't run out of budget before you run out of time. There will be new sales and deals, so don't worry, you aren't missing out."

You know yourself, so take the approach that best suits your needs.

person shopping online with smart phone

Find savings

As the holidays get nearer, create a shopping list. Once you have your gifts determined, stick to your list and keep an eye out for when those items go on sale so you can comparison shop.

You can do your own research and compare prices manually, or you can use an extension that does it for you.

“Using a browser add-on, like PriceBlink or InvisibleHand, will ensure you never overpay. The free browser extension automatically checks for lower prices, coupons, and free shipping anytime you are shopping online. It also tracks prices and price history, so you can decide the best time to buy,” says Karl Quist of PriceBlink.

You may also be able to find discounted gift cards.

“Discounted digital gift cards are also a great way to save. On, you can find discounted gift cards that you can purchase and then shop with (automatically creating your own discount) or give as gifts (the recipient will never know that you saved on their gift!),” says Trae Bodge, smart shopping expert for

You can also try other shopping methods, like Facebook or garage sales.

“Use Facebook Marketplace as a place to find gifts for people. Allow someone else to make the impulse buy and resell the item back out to the Marketplace for a discounted price. You can find many items new and then use the chat feature to negotiate the price,” says Brittany Kline of The Savvy Couple.

Alternatively, you can create homemade gifts or regift. Just be careful not to regift to the same person who gave you the gift.

“Homemade gifts are a great way to save money and provide someone with a unique gift. Not all homemade gifts are created equal. If you are going the DIY gift route, give a gift that people can actually use! Homemade hand scrubs, cookie ingredients in a mason jar, hot cocoa and a mug, homemade candles...the list goes on. Nothing like a quick Pinterest search. Think about practicality. You don't want to waste your money on making homemade gifts that people really don't want,” says Kline.

Gifts also do not have to be products—they can be charitable donations. This is especially great if you have friends or family who are passionate about causes.

“Instead of buying gifts, make a contribution to a charity in the name of those who you normally buy gifts for. Your tax deductible contribution can be far less expensive than buying gifts. The charity will never reveal the size of the gift, and you can use one donation to cover many people,” advises Wolf.

Determining the best way to approach gift-buying will help you find a solution that shows thought and care without wrecking your finances.

red and white wrapped gifts

While there may be some decorations that need to be purchased every year, you can approach decorations in many of the same ways that you would gifts. You can create your own and watch for sales. Plan to reuse decorations every year to reduce those costs.

Bryan Stoddard, Director at Homewares Insider, counsels, “I've seen this problem when people approach each year's holiday as a completely new event. They need to have the latest and newest decorations, and their old decorations are forgotten and left gathering dust.

I don't mean to say that decorations are the main way people spend too much during the holidays, but in my opinion, they affect spending in a big way.

Because of that, I'd recommend you bring out your old decorations and reuse them.”

Another good way to find savings is to research cheaper options for your recurring expenses.

“See if you’re paying too much for a monthly service like cell phone service, TV, or internet. offers a comparison engine for cell phone plans, TV, internet, insurance, and more,” says Logan Abbott of

You should also make sure that you’re not paying for subscriptions that you’re not using.

“Take a look at your monthly subscriptions on your credit card. Many people sign up for some monthly delivery service like vitamins, or razors, or an online news website, and then they stop using the product but forget to cancel. You can do this yourself by spending 15 minutes scanning your credit card bill,” Abbott adds.

These tips are great because they help you save on expenses throughout the year, not just over the holidays.

wallet with money

Track your spending

If you don’t know how much you spent on the holidays last year, keep good records this year. Track your spending as you go so that you know how much you’re spending on the holidays and compare it to your budget. You can track it yourself in a spreadsheet or use a budgeting app.

“During the holiday season, incidental purchases can easily pile up. That's why it's important to keep track of every expense during the holidays. Whether you do it by spreadsheet or via an app, it's important to know how much money you really have. It doesn't matter if it's an ugly Christmas sweater or just an extra cup of cocoa — you need to know that money is gone,” says Michael Bonebright, consumer analyst.

If you’re spending more than you planned, evaluate why and find ways to reduce costs.

Once the holidays are over, review your spending.

“Tracking will also help you gauge how healthy or unhealthy your holiday spending habits are and help prepare you for the following year,” cautions Nathan Wade, Managing Editor for WealthFit Money.

Understand the reasons behind your purchase decisions. If you’re comfortable with the amount you spent, that’s great. If you feel that you overspent, figure out how you’ll approach the holidays differently next year.

Avoid debt

It can be tempting to put holiday expenses on a credit card or use layaway programs for gifts. While these are nice options and tools to have, be sure to use them carefully.

Debt often comes with interest, which means that you’ll typically end up paying more for an item than its sale price.

As you’re making purchases, it can be helpful to think about the cost in terms of work hours, not dollars.

“Consider your purchases in work hours, not dollars — how long would you have to work to buy that huge LEGO set? Putting your purchases into a different perspective can help you stay on track,” suggests Bonebright.

If you’re working extra hours or anticipate a holiday bonus, don’t spend it before you have it.

“Leave the holiday overtime pay and bonuses out of your budget. These funds are not guaranteed until they show up in your bank account, so you should never count on them. Then, if you do get a sizeable holiday paycheck, you can put those funds toward something fun,” says Bonebright.

If you’re taking on large amounts of debt for the holidays, it’s probably not worth it. Instead, it may be best to reset expectations for your family and friends or find other ways to lower your spending.

As you thoughtfully consider your holiday traditions and budget wisely, you’ll be able to enjoy the holidays without worrying about your finances and financial future.

For more holiday budgeting tips, check out Consolidated Credit’s “Debt-Free Holiday Budgeting Guide” or Kalicia Bateman's "How to Create Your 2020 Holiday Budget".

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