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How to Rein In Your Holiday Spending

Your monthly bills cost enough without the added cost of the holidays. There’s rent, utilities, phone, a car payment. Then once you get into the latter part of the year, you’re forced to think about gifts, celebrations, and holiday travel. It all adds up and unfortunately doesn’t come with a cheap price tag. Holiday budgeting is important if you don’t want your regular, month-to-month expenses to fall by the wayside but also want to set some cash aside for the festivities. Here are some tips to help you spend less and save more this season so finances don’t have to spoil the holiday cheer.

Make a List

Check it twice. Before you even start swiping your credit card, write down the names of every person that you want to get holiday gifts for, including your family, friends, in-laws, teachers, or mailman. You should also set a spending limit, or the maximum amount that you’d like (or are financially able) to spend on each person, as well as a tentative gift list for each person.

Take it one step further and rank the people in order of how important it is to get them a holiday gift. Ideally, you’ll be able to get gifts for everyone on your list, but things happen — or emergencies arise — and you have to prioritize what your money and energy will go toward. If this is the case, you’ll want to make sure that you’ve taken care of the highest priority gifts on your list before moving to presents of lesser importance.

Adjust Your Budget

Budgets are meant to change because your wants and needs change throughout the year. If it’s important to you to buy gifts for your friends and family members, make sure that you work that into your holiday budget. Better yet, start adjusting your budget and allocating money to the holidays well before the season arrives. Think summer or early fall.

This will give you ample time to set money to the side or funnel it into a specific fund for anticipated holiday expenses. Having a specific account for holiday spending will help keep these funds out of sight and out of mind. When the time comes to spend money on gifts, party food, and holiday-related travel, you know what money you have at your disposal.

Keep in mind: Holiday purchases should only come out of that fund, not accounts that are typically used to pay your essential bills. And ideally, you will not use a credit card or Buy Now Pay Later for holiday-related transactions. When your holiday shopping is bought through credit, you can rack up quite a bit of debt that can be difficult to overcome in the new year.

Compare Prices

In many aspects of life, it pays to price compare. Take grocery shopping, for instance. You can probably score a store-brand pantry staple at your local market that tastes just as good as the name brand at another grocery store up the street — and it is probably also a fraction of the cost.

The same goes for holiday shopping. After you’ve planned out who you want to buy gifts for, how much you want to spend on them, and a few ideas of what you could buy, compare rates at a number of different stores to find the best deal. Online shopping can help here, as can starting your shopping early to track slashed prices throughout the holiday season.

Start Shopping Early

The earlier you start shopping for the holiday season, the more you can space out your purchases. This will give your bank account some room to breathe between purchases, which especially helps if you have one or more large items to buy.

Getting ahead of the holiday crowds will also help you avoid lengthy shipping delays. If you wait until the last minute, you will likely have to pay a pretty penny to ensure it gets delivered on time — or risk it getting delivered after the holidays.

Track Your Spending

It’s always important to track your spending habits, but it’s especially important during the holidays. With extra expenses — like gifts to buy, parties to supply food for, and higher bills to cover with family and friends in town — you should keep a close eye on your bank account to ensure that you stick to your budget and don’t lose track of how much money is going toward holiday spending.

If you’re out purchasing a bunch of presents, the transactions add up and could lead to overdraft fees. Additionally, if you charge holiday expenses to a credit card or use Buy Now Pay Later, you should set up alerts to remind yourself when to make payments. It’s easy to let those payments fall by the wayside. Unfortunately, delinquent payments can cause financial damage. You could incur late fees, accrue interest, and even harm your credit score.

One way to reduce your holiday spending is to shop the sale rack

Opt for Thoughtful Gifts

Rather than spending money on the newest and best gadget, think about the gift that your friend or family member would really appreciate. You might be able to find an older model of an electronic that is on someone’s list that works just fine and is easier on your pocketbook.

Also, people often appreciate gifted experiences or homemade gifts. A cooking class or craft session allows you to make memories with the person, while a homemade gift allows you to flex your creative muscle. It’s often much more meaningful for the recipient anyway. Better yet, both options are usually more cost efficient.

Take Advantage of Deals

The usual suspects when it comes to deals include Black Friday, Small Business Saturday, and Cyber Monday. But don’t forget that companies will often slash prices well beyond the weekend after Thanksgiving. Keep an eye out for lower prices throughout the entire holiday season.

You should even price compare if what you’re looking for is available at more than one store. If you do a little digging, you can often find things for much cheaper, or you can get a price adjustment at one store if you can prove that you’ve found the item for a lower price at a different store.

Speaking of deals, you should beware of false sales. Some companies will hike the baseline price so that the sale price is the same as it would be any other time of the year. In other words, don’t get caught up in the sale prices for the sake of a deal.

Shop Intentionally

Online shopping has become easier than ever. With a click of a button, you can make a purchase and get it delivered to your doorstep in just two days (or sometimes sooner). However, online shopping can be a double-edged sword. On one hand, targeted ads can lead you down a rabbit hole of purchases.

You can also run into shipping delays when you shop online. As the holidays draw nearer, you may feel pressured to drop extra cash to ensure that your gifts land on your doorstep on time.

On the other hand, in-person shopping can lead to a similar amount of impulse purchasing. Product placement in stores is like a science. Stores are usually laid out strategically to get you to buy certain products, meaning that it’s easier to see an item and throw it in your cart without seriously considering the financial damage.

There’s a thing called the “shopping momentum effect” wherein once you start shopping, you keep shopping. This can happen whether you do your shopping online or take a big shopping trip to the stores. No matter where you do your shopping, it’s important to have a relatively strict shopping list to keep your holiday budget on track.

Save Up

The season always seems to sneak up, so planning ahead and saving can be your secret weapon. Although it may seem premature, try to save money from your paycheck as early in the year as possible, or open a new savings account specifically for gifts. If you’re planning to spend a decent amount of money on gifts, celebrations, food and drink, or travel, having a holiday savings account can ensure that you don’t dip into your regular checking account where your essential bills are deducted from. Build a holiday cushion into your budget earlier in the year so that you don’t find yourself in a financial bind come winter.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $11 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.

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