When I think about the holidays, I automatically think of the “most wonderful time of the year.” But I’ve also seen years when the holidays have been the “most stressful time of the year.” Why? Because of that 5-letter word: M-O-N-E-Y. 

If we let it, holiday spending and holiday budgeting could be the struggle of the holidays. However, there are plenty of ways to save money during the holidays and avoid stress. So, for those with a long gift giving list or a long holiday bucket list, don’t lose hope. Try these 19 smart holiday spending tips and make this season the most wonderful time of the year.

group of women having fun wrapping gifts

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Holidays on a Budget

I love the holidays for the special memories, seeing friends and family, and time off work. But as a graduate student and part-time consultant, it’s become necessary to find creative ways to save money during the holidays so I can focus on enjoying the holidays instead of worrying about paying off my credit card bill. For me, that means committing to the holidays on a budget. 

This year, my plan for the holidays is to stop overspending, prepare financially for the holidays by saving, and be selective about what I do to make every dollar count. Here’s my personal plan for how to save money during the holidays.

How do I stop overspending during the holidays?

Overspending during the holidays is usually due to a lack of planning. When our dollars don’t have a purpose, we tend to throw them in all directions, say yes to everything, and ending up with an overdraft on our bank account or a credit card bill we can’t pay.

To stop overspending during the holidays, you can implement these 4 ways to save money.

  1. Make a budget – holiday budgeting is one of my top smart holiday spending tips. If you have already determined where your money is going and how you’ll make ends meet, then you are more likely to stick to that. For more on budgeting, here are my favorite financial resources for young professionals.
  2. Instill a waiting period to cut back on impulse buys – Another way we tend to overspend is by buying on impulse. Those last minute purchases at the cash register eat at our wallet little by little. Use a waiting period of 3 days or a week before you buy something. If it’s meaningful and important to you, then you’ll go back for it. If you forget about it shortly after, chances are you didn’t need it anyway. 
  3. Shop on a full stomach – Buying snacks, coffee drinks, and lunch while you’re out shopping can get expensive fast and easily blow out your holiday budget. Instead, make sure to eat before you head to the mall and carry a small snack such as a granola bar with you in case you get hungry.
  4. Go buying, not shopping – Thanks to all the retailers with an online shopping experience, you can decide what you’re going to buy and where before going to a mall or shopping center. Going shopping with your mind set on a purchase keeps you from getting distracted by other options that are over budget. 
    • Even if you don’t know exactly what you’re going to buy, you should only walk into the store if you have a general idea of what you’re looking for (like self-care gift ideas for her), who you’re buying for (like gifts for a 20 year old female), and how much you’re willing to spend.

How do you prepare financially for the holidays?

Another important way to save money during the holidays is to save year round for the holidays. Many people rack up credit card debt during the holidays to pay for gifts, parties, and travel. But if they don’t have enough income the following month to cover it, they end up paying interest. That means whatever they bought previously actually costs more overall because of interest.

The best way to avoid paying interest and thus overpaying for something is to prepare financially for the holidays by saving more. 

How to save for holiday spending money

When it comes to how to save for holiday spending money, the process starts with making a proper budget and sticking to it all year round. Instead of trying to cut back in other (essential) areas during the holiday months, save money all 12 months of the year to prepare financially for the holidays.

How much does one need to save for holiday spending? It depends on what you plan to do during the holidays. Before you begin enacting a plan of how much to save, start with making your holiday budget. In other words, during the holiday season how much do you spend on:

  • Gift Giving
  • Travel (Vacation and visiting family and friends)
  • Contributing to holiday parties (ex: Friendsgiving or a Christmas party potluck)
  • Giving to charitable organizations
  • Hosting a holiday party
  • Taking time off (depending on the time off policy at your company, you may have to prepare for unpaid holidays)

After adding up the totals from all these holiday spending categories, divide the number by the remaining months in the year (11 or 10). Now each month, you’ll want to save that amount of money for your holiday spending.


For example, if total, I spent about $1000 per year on holiday spending, then I would plan to save $100 every month for ten months (January – October) in order to prepare financially for the holidays.

How do you enjoy holidays on a budget?

Now, if you’re reading this post and it’s November/December and the holiday season is upon us, then it may be difficult to scrounge up enough savings for your “dream holidays.”

But just because you’ll have to do the holidays on a budget, doesn’t mean your holidays will be less wonderful.

In fact, I’d say the opposite. Last year, for various reasons out of my family’s control, we ended up being separated for the days leading up to Christmas. All of my plans to go to the mall with my mom and sisters and do a Christmas Eve store dash with my father were ruined. Even my brother who was coming from another state couldn’t get home until after Christmas.

Despite all the canceled plans and dashed hopes surrounding this Christmas, I was blessed through it. I was able to focus on the real purpose of Christmas like never before—Jesus Christ and his gift to me and the world. 

“‘She will bear a son, and you shall call his name Jesus, for he will save his people from their sins.’ All this took place to fulfill what the Lord had spoken by the prophet: ‘Behold, the virgin shall conceive and bear a son, and they shall call his name Immanuel’ (which means God with us).”

Matthew 1:21-23 ESV

Though separated from family and not going crazy on holiday spending, this Christmas was still special because I was able to reflect more deeply on what it meant for my Savior to come to earth to save me from the penalty of sin.

So let go of your holiday expectations. Whether you have a big budget, a small budget, or are somewhere in between, the holidays aren’t special because of money. They’re special because of family, friends, and love.

With that, here’s how you can do the holiday on a budget!

3 Steps for successful holiday budgeting

Smart holiday spending tips start with holiday budgeting. You can create your own holiday budget guide with these three steps:

  1. Do an assessment of your income and how much you can spend. Using your existing budget, you can see how much of your income and savings can become earmarked for holiday spending.
  2. Create a list of holiday spending categories (you can use the list above) and allocate your money to each category. Keep working on this step until the amount of holiday spending does not go over the money you’ve set aside for the holidays.
  3. Be realistic and flexible. When it comes to holiday budgeting, it’s important to be honest about how much things cost. If your budget is impossible to stick to, then you may become discouraged and throw it all out together. This brings me to last of my holiday finance tips – be flexible. Working a buffer into your budget or adding a miscellaneous category will help you with unexpected expenses or holiday invites.

6 Smart holiday spending tips

In addition to creating a holiday budget guide and knowing how to save for holiday spending money, you can make your holiday spending dollars go further with these holiday finance tips. These are simple, smart holiday spending tips you can use today:

  1. Shop second hand and at thrift stores. You’d be surprised the items you can find in good condition (sometimes brand new) that make great gifts. For example, last year I bought flannels for friends from Goodwill.
  2. Cut your gift-giving list. Every coworker and person in your small group doesn’t need a separate, expensive gift. Make a shorter list and then focus on getting that smaller group of people more thoughtful gifts.
  3. Bundle your gift-giving list. If you have a close group of friends, think about a joint gift that you could give everyone. For example, host a dinner and have your friends over for games and movies. This fun activity could be your Christmas gift to all of them.
  4. Ship directly to the recipient and cut out the middle man – If you’re sending gifts across the country, then avoid the double shipping costs. Instead of shipping to yourself, wrapping the gift, and then shipping it to the recipient, ship it straight to them with a thoughtful note (Sorry I couldn’t wrap the gift this year, but hope you enjoy!).
  5. Shop early – Some stores raise prices the closer you get to Christmas since they know people will desperately be looking for gifts.
  6. Make an intentional plan about your giving – There are so many campaigns around the holidays asking for donations. If you let everything and everyone pull at your heart strings, then your money will go fast. Instead, make an intentional plan about your giving. Set aside a certain amount of money and do research to pick out the organizations, churches, and charities where you want to donate money. That way, when you’re approached by someone else asking for money or a sappy ad on TV, you’ll know that you’ve already earmarked that money for other generous purposes.

7 Creative ways to save money during the holidays

If you’ve implemented these holiday spending tips and are still looking for more creative ways to save money, look no further. Here’s how to save money during the holidays when you’re feeling strapped for cash:

  1. Instead of giving gifts, give the gift of your time. 
    • Grab coffee with a friend or have someone over for dinner. 
    • Decorate the Christmas tree with your grandparents. 
    • Spend time grocery shopping or doing chores for your parents. 
    • Babysit for a sibling, friend, or cousin.
  2. Secret Santa – if you have a close group of friends, instead of giving each of them a gift, do Secret Santa as a group. Now instead of buying several gifts, you only need to purchase one gift.
  3. Opt-out of the gift giving – When I was in university, it seemed like every group I was a part of wanting to do Secret Santa around Christmas. To stick to my holiday budget, I had to say no to some of these groups. I still went to the Christmas party, but without gifts to exchange.
    • While you’re at it, you can opt of the “white elephant” gift giving, too (unless you’re giving away something you already have and don’t need).
  4. Go after-Christmas shopping – If you won’t be seeing friends or relatives until after Christmas, then push your shopping to after Christmas so you can take advantage of the post-season deals. Or better yet, put a picture of the gift in a box and give it to them with a promise to get it to them after Christmas.
    • Another holiday budgeting hack for decorations is to buy them post-season when they will be discounted and use them for next year.
  5. Homemade gifts – Some of the best gifts do not come from a store. Research some creative gifts on Pinterest that you can DIY at home or make by repurposing things around the house. For example, I’ve made lip balm and sugar scrubs for my friends as a party favor.
  6. If you’re hosting a gathering, plan a potluck instead of buying all the food and/or trying to track people down to contribute.
  7. Save money on gas by shopping online or cutting down the number of shopping trips.

11 Ideas for free/low cost holiday fun

Another creative way to save money during the holidays is to fill your holiday calendar with free and low-cost holiday fun. 

  1. Spend time in nature – build a snow man, have a snowball fight, rake the leaves in a pile and jump in them, go hiking, take scenic pictures.
  2. Attend a Christmas tree lighting
  3. Host a bonfire
  4. Have a Christmas movie marathon
  5. Play board games with friends and family (our family’s current favorite is Unstable Unicorns)
  6. Make a cozy drink like hot chocolate, pumpkin spice lattes, or cider
  7. Cookie decorating
  8. Make DIY Christmas/Thanksgiving decorations – this will save you money since you don’t have to buy them
  9. Go Caroling
  10. Catch up with friends by hosting a video call game night
  11. Read Christmas themed/holiday themed novels – you can get these at a thrift store or from you local library

Also, check out the winter bucket list and fun things to do on a snow day for adults. It has tons of more ideas of holiday fun.

black woman in mall with shopping bags

Benefits of Saving Money During the Holidays

While slashing your holiday spending, sticking to a budget, and cutting your gift-giving list may not seem like a great way to spend your Thanksgiving or Christmas, I beg to differ. Because all the things and the stuff that take our time and money during the holidays are the things that don’t matter. They cause stress, worry, and sometimes debt, all of which distract us from enjoying what does matter:

Spending time with family. Hanging out with friends. Catching up with distant friends and relatives. Celebrating Jesus’ birth and reflecting on everything we have to be grateful for.  

Other benefits of saving money during the holidays are lower stress levels, smarter holiday spending, more thoughtful gift giving, more time for fun holiday activities, and a better focus on the true meaning of the season. I wish all these benefits for you and more as you save money during the holidays and spend time with the people you love.

  • How do you prepare financially for the holidays?

Leave me a comment below!

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