6 Holiday Budgeting Tips

The holidays are a fun and festive time of year, but holiday shopping can take a large bite out of your budget. The average U.S. family is expected to spend more than $1,000 on gifts this year, which could set an all-time holiday spending high.

Black Friday, Cyber Monday, and other holiday sales events bring the promise of steep discounts and big savings, but they can also lead shoppers to spend far more than they initially planned.

When you’re burning a hole through your finances, it’s hard to enjoy the holidays. Use these simple tips to help you stay on budget and keep money worries away this holiday season

1. Set—and stick to—a clear budget.

The best approach to meeting your budget is the simplest one of all: Before you start shopping for the holidays, sit down and make a strict budget for how much you’re allowed to spend. Look at your finances and make sure it’s a number you can comfortably manage.

If you have children, it may be helpful to set a per-child spending budget. This keeps spending equal among your children and can break down your budget into more manageable chunks.

If you struggle to stick to a budget, consider a cash-only system to increase your spending awareness and limit overspending.


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2. Resist impulse buys.

Sales events like Black Friday and Cyber Monday promise big savings, and great deals can be found if you look hard enough. But in many cases, these sales events are banking on customers making additional purchases that go beyond their budget.

Maybe your electronics store is offering new TVs at a huge discount. The savings can be tempting, but does this item fit into the budget you’ve laid out? If the purchase is going to increase your total holiday spending, you should think twice before making the impulse buy. 

Don’t focus on the amount you’re saving on holiday deals. Focus on what you’re spending, and be willing to make tough decisions to stay within your budget.

3. Start shopping early to score savings on the items you want.

During the holiday shopping season, it’s true that the early bird gets the worm. Why wait for Black Friday to start finding great gifts?

For example, if you’re shopping for a youth bike for your child, you can scour ads and online deals looking for the cheapest option between now and the holidays. With extra time to bargain hunt, you can hopefully land a better deal than if you wait until the last minute.

4. Always compare prices.

When you’re trying to stretch your dollars at the holidays, never buy an item without checking the price at other stores. Comparison shopping is an easy way to trim the cost of purchases just by doing a little extra research.

Consider buying products at retailers that offer price-matching. If a retailer doesn’t, that’s no problem—just hold on to your receipt in case a better deal comes along and you need to make a return.

5. Use promotional APRs and interest-free payments for holiday purchases.

If you have a retail credit card or are making large purchases at the holidays, you may be able to take advantage of promotional APRs or interest-free payment plans that let you spread out holiday spending over 3-6 months, if not more.

This can be a risky strategy unless you’re certain you can pay off the debt over time—otherwise, you could get back-charged for interest applied over the entire repayment term. But these promotional offers can be cheaper than racking up credit card debt, and in some cases you can use the installment plans to benefit from smaller payments without paying a penny of interest.

6. Consider other ways to treat your family.

If your finances don’t leave a lot of extra room for buying gifts, remember that there are many ways to celebrate the holidays that don’t require big spending. This could include activities that keep your kids busy and give them a memorable experience, such as baking, crafting, playing board games, and spending time outdoors. 

Check your local community for free holiday events like parades, winter festivals, light displays, volunteer opportunities, caroling, and other activities that make holiday celebrations fun and affordable.

Buying gifts for your loved ones is fun, but it’s important to make smart decisions that won’t put you in a financial hole. By creating a plan for your holiday spending, you can keep purchases under control, maximize your spending, and enter the new year on solid financial footing.

Download The Ultimate Holiday Budgeting Checklist & Planner

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