Tips on Making a Holiday Budget

holiday present with a long red bow

The holiday season can make you feel extraordinarily generous — even beyond an ordinary budget. One of the simplest ways to avoid holiday stress is creating a budget so that your gift-giving spirit doesn’t overtake your smart-spending brain.

With a pre-planned budget, you can indulge your loved ones without struggling to keep up with your bills.

Create a customized holiday budget

Account for all the bills that will be due around the holidays. Don’t forget to factor in other expenses like groceries and fuel, both of which can be higher than usual due to holiday parties and travel.

Determine how much money you can save between now and the holidays to devote to gift giving.

Set aside a small portion of that budget to buy rolls of wrapping paper, tape, ribbons, bows and cards.

List everyone you’d like to give a gift to. Divide your remaining budget among these people; set a specific dollar amount for each person.

Keep a copy of your budget with you to keep you focused during holiday shopping trips — and to help you avoid the temptation of impulse-spending on yourself. Be sure to record exactly how much you spend.

Follow your guidelines, but stay flexible. You may find the perfect gift for Aunt Bette on sale. Or (more likely) you may go over budget on your best friend’s present. Either way, shift funds as needed. If you spent more on one gift, spend less on another.

Smart shopping tips

Have a plan and stick to it

Sale signs are a temptation, but be wary of giving into them too quickly. Make a list of the gifts you plan to buy and set a budget to help you avoid overspending.

Know that you may pay double or even triple for the hot toy or gadget on an internet auction site when demand is highest just before the holidays. The National Retail Federation estimates that 40% of consumers start their holiday shopping before October 31[1]; as a result, retailers advertise their holiday deals weeks in advance.

Price match

Research to find stores that match prices. Some retailers typically match a competitor’s price on an identical item.

Shop online

Online shopping is a growing alternative that can save you time and money., and similar sites can help you get the best deal by comparing prices at different stores. And be sure to sign up for email alerts, so know when stores offer free shipping or other deals.

Pay on layaway

Layaways give shoppers the flexibility to pay over time, rather than all at once. With stores like Walmart and Sears offering layaway programs, you can buy the hot items when they’re available and pick them up in the store when you’ve made all your payments.

Want to save money and spend more time with your family during the holidays? Start working on your gift list now

Creative ways to stretch your budget

Not all gifts have to be expensive – in fact some of the best ones are ones that cost the least…

  • Consider starting a gift exchange with a group of relatives or friends so that you only have to buy one gift instead of bag loads for everyone.
  • Create homemade gifts for people who will appreciate them. Knit a hat for your cousin’s new baby, or decorate sugar cookies for your next-door neighbor. Doting relatives often appreciate simple framed photos of kids or grand-kids.
  • If you’re running out of money, you can always give your time. Offer a free night of babysitting to your sister, or take your niece on a special date to a local museum.