7 Budgeting Tips to Help Manage Holiday Spending

The average U.S. consumer intended to spend about $1,000 on holiday expenses in 20201, and 2021 is projected for even bigger retail sales, with analysts predicting a 7-9 percent increase in overall holiday shopping compared to the 2020 holiday season.2

For most individuals and households, that’s a huge bite out of your bank account, and it could be a source of stress this holiday season. If you want to enjoy the holidays without suffering a wave of financial stress, prioritize planning by setting a reasonable holiday spending budget. Whether you struggle with holiday spending or you’re just looking for ways to better manage your money around the holidays, here are seven holiday budgeting hacks for becoming a smarter shopper.


1. Give yourself a set amount to spend and pay in cash.

Your budget is your best friend if you want to keep holiday spending—and general, everyday spending—under control. Figure out how much it makes sense to spend and give yourself a hard limit to ensure that you stay under budget.

If you struggle with overspending on your credit or debit cards, holiday shopping might be a good time to try paying for everything in cash. Give yourself your entire holiday budget as a cash amount to increase your awareness of your own spending habits. By paying in cash, you’ll be more aware of how much you’re spending on your purchases—and you’ll have a stricter method of making sure you don’t blow your budget.

6 Tips for Creating Your Holiday Shopping List

2. Make sure your budget covers all holiday expenses—not just gifts.

Gift-buying is a major expense line in any holiday shopping budget, but there are other costs you need to account for. Planning to buy any new holiday decorations? Hosting a holiday dinner for your family or friends? What about traveling, which may include flights, car rentals, hotels, or other costs?

All of these costs belong in your holiday budgeting plan. If your total budgeted amount is more than you can comfortably afford, look for areas where you can trim your costs and set an achievable holiday spending budget while still enjoying your favorite things about the season.


3. Shop early to hunt for deals.

When it comes to holiday deal-hunting, the early bird doesn’t always get the worm—but they do have a larger window for finding bargains on items they’re seeking.

Pre-Black Friday sales have gained in popularity in recent years, with major retailers using these promotional windows to capture early holiday purchases among deal-hunting shoppers. Pay attention to ads and promotions and see if you can get more bang for your buck.

In 2021, early shoppers may also be rewarded with better retail inventory options. Ongoing supply chain issues around the world are expected to result in product shortages that could leave store shelves bare in the days leading up to major holiday events.


4. Focus on crafts, homemade gifts, donations, or experiences in lieu of store-bought items.

If you’re tight on funds for a holiday shopping budget, consider alternative types of gifts that are easier on your budget and often even more meaningful than a new item from the store.

The options here are endless! You can make a homemade candle, wreath, or even jewelry, or offer your time to clean a loved one’s home, make them dinner, or teach them a new hobby or skill. In many ways, these gifts can be even more appreciated and memorable than a store-bought gift.


5. Set budgets per person on your shopping list.

Divide your gift-buying budget among all of the people for whom you plan to purchase gifts. Set individual spending amounts so you can pace your purchases and stay on track to meet your holiday budgeting goals.

You can also use structured gift-giving rules to control these costs. Ask family members to agree on a spending limit for holiday gifts, for example. Or use a Secret Santa or a similar type of gift exchange to reduce the number of gifts each individual has to buy while also ensuring fairness around the number of gifts each person receives.


6. Save up year-round.

The costs of holiday spending can be overwhelming for a one- or two-month budget. Save yourself this financial burden—and the risk of carrying over credit card debt—by setting aside monthly savings to spend throughout the holidays.

If it’s too late to take advantage of this holiday budgeting hack for this coming holiday season, make a plan for the following year to build up savings that will fund your holiday spending splurge.


7. Find seasonal work to cover your holiday spending.

If you’re finding it hard to create room in your regular budget to cover your holiday spending, consider getting a seasonal job or starting a side hustle to help cover those costs. Seasonal work can be a convenient option for generating an influx of cash that can help you comfortably afford all of your holiday spending goals.

Holiday shopping can easily get out of control when you aren’t paying attention to the total amount you’re spending. When things get hectic, keep calm and stick to your holiday budget.

Ready to take your holiday budgeting to the next level? Download The Ultimate Holiday Budgeting Checklist & Planner.

Download The Ultimate Holiday Budgeting Checklist & Planner


  1. https://nrf.com/media-center/press-releases/consumers-prioritize-spending-family-friends-ahead-holiday-season 
  2. https://www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/deloitte-holiday-retail-sales-expected-increase-seven-to-nine-percent.html 

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