For many families, holiday spending is a significant expense. In some cases, credit cards get maxed out, and they spend the following year paying for holiday splurges. While it feels great to buy the hottest gifts, host parties, and spend money to see your loved ones, you can do so without blowing your budget. Keep reading for our best tips on budgeting for the holidays.
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Travel Expenses
Travel to see family remains a major holiday expense, with recent surveys showing the majority of Americans planning trips for Thanksgiving and Christmas.¹ Holiday airfare typically runs higher than off-peak travel, with round-trip flights averaging between $350-$750 for Thanksgiving and $450-$685 for Christmas, depending on your route and booking timing.² Prices rise as holidays approach, so book early. Here are some ways to save on travel costs:
- Book early – Travel experts recommend booking Thanksgiving flights by late October and Christmas flights by mid-November for the best prices and availability
- Use points from a credit card
- Consider flying into a nearby airport and driving a little further
- Fly on the actual holiday for cheaper airfare
- Get travel insurance – this seems like an added expense upfront, but it could save you money if your flight is canceled or plans change. Check the travel insurance coverage provided by your credit card as well
- Ask for travel gifts instead of other items to help defray the cost
✨ Are you feeling overwhelmed by holiday stress? – 25 Ways to Care for Yourself This Holiday Season
Hosting Friends and Family at Home
That’s great, but not without its own costs. Recent surveys show that hosts expect to spend an average of $590-$633 on food, drinks, and decorations.²
- Shop sales at the grocery and party stores
- Consider making it a potluck event and a BYOB (bring your own bottle)
- Reconsider what you’ll be serving based on the cost of different food items, and buy in bulk
- Reuse decorations from last year or create your own. These ice lanterns would cost nothing to make, and they’re gorgeous
➡️ Ensure your finances are in good order and set yourself up for success in the coming year – 7 Financial To-Dos This December
Gifts
Gifts are the biggest holiday expense, averaging $831.³ Between friends, family, and coworkers, it’s not surprising that gifts ring in so high on the expense scale, but you don’t have to toss your budget out of the sleigh. Save on gift expenses this year by:
- Creating a list of people you’ll buy for
- Having a firm budget before you start shopping and sticking with it
- Decide how many gifts you’ll buy for each person on your list
- Create a gift fund to contribute a small amount to all year long. Setting up automatic transfers for this makes saving much easier, and it’s never too late to start saving.
- Use browser extensions to help find deals when shopping online. For example, we use Honey by PayPal and have earned thousands of points, which you can redeem for cash back, gift cards, or PayPal shopping credit. RetailMeNot and CapitalOne also have similar browser extensions.
Non-Gift Purchases
Holiday decorations, greeting cards, wrapping paper, and other celebration expenses average $350. Most of these items seem small, so you may not realize the big bite they take from your budget. To save money on non-gift purchases:
- Consider an artificial tree that you can reuse year after year – this is better for the environment, too.
- Buy wrapping paper, cards, and other items on clearance after the holidays so you’ll already have them for the following year. Artificial trees are also deeply discounted after the holidays.
- Shipping costs can be reduced if you don’t wait until the last minute, so plan ahead and save yourself some money. December 15 is usually the previous day to get the lowest ground shipping price.
🎁 Regardless of the sort of family caregiver you are, your time is likely to be limited – Honoring Caregivers this Holiday Season
Review Your Holiday Spending
Once the holidays are over, look at what you spent and make adjustments for next year.
- Look at each spending category and note what worked and what didn’t. Adjust accordingly!
- If you need to refresh your decorations, send yearly cards, or need more wrapping paper, clearance sales are your best bet for bargains.
- Set up or adjust your holiday savings account so that you contribute from each paycheck.
- Buy presents throughout the year instead of in a rush after Thanksgiving
- Create travel notifications for deals on where you’ll be traveling next year. Then, when the price drops to within your budget, book it.
🎄Do the holidays make you stressed out? Maybe even a little angry? You’re not alone! – 5 Holiday Triggers and How to Deal with Them
Which of these tips did you find most helpful with budgeting for the holidays?
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