The holiday season is exciting. Spending time with friends and family, attending parties, traveling to see loved ones — there’s no shortage of things to do. But that excitement can come at a cost. And many people are looking for ways to keep that cost down.
A recent CNET survey found that 30% of American shoppers plan to spend less this holiday season than they spent last year. That makes sense given the higher cost of living. And it’s important to avoid spending too much on the holidays. After all, overspending can lead to long-lasting ramifications like high-interest debt and a depleted savings account.
But how do you avoid breaking your budget this holiday season? These tips can help.
7 ways to avoid holiday overspending
You don’t need to go into the red to have a happy holiday season. Here are some easy tips to cut back on costs.
📋 Create a budget
Responsible holiday spending starts with responsible budgeting. Start by thinking of everything you plan to spend money on this holiday season. This includes gifts, travel, food, decorations and anything else you might need.
Now, think about the money you’ve already saved and the money you plan to save between now and when those expenses arise. This will give you an idea of what you can afford to spend on each activity. Set a hard limit on each expense and make a resolution now to stick to that limit.
Pro tip: These holiday budgeting apps make setting and sticking to your spending goals a breeze. They can also help you create gift lists and track which gifts you’ve bought and which you still need to buy.
🎁 Spend less on gifts
For most people, gifting is a significant expense during the holidays. My budget includes gifts for 13 children, not to mention the adults I plan to buy gifts for, so I know how important it is to not go overboard. Here are a few ways to spend less:
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Buy fewer gifts: If you normally buy more than one gift per recipient, consider cutting back this year.
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Buy for fewer people: If you don’t have enough money to comfortably buy gifts for everyone on your list, consider narrowing down your recipients by prioritizing children and those closest to you.
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Make gifts: My favorite gift I ever received is a 10″ x 8″ painting my children made on Father’s Day. If my house were on fire, I would grab that picture before anything else. That gift cost under $3 to make, but it means more than anything I own. From baked goods to bath bombs, there are plenty of DIY gifts you can make to show your loved ones you care.
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Propose a gift exchange: Pitch the idea of gift-giving games like Secret Santa or White Elephant to your social circles. They can be a fun addition to your holiday parties and cut down on costs for everyone involved.
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Take advantage of sales: The holiday season is also the season of sales. Purchase gifts during sales events like Black Friday and Cyber Monday to save money.
✈️ Travel cheaper
Hotel stays, airfare and meals on the road can add up quickly. But there are plenty of ways to get where you need to go for less. The easiest is to stay home this year, but if that’s not an option you want to entertain, here are some other tips to travel more affordably.
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Skip the hotel: Make arrangements to stay with friends or family to save on hotel costs.
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Take advantage of travel rewards: Use credit card travel rewards to cover costs like airfare, accommodations and car rentals.
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Pack snacks: If you plan on taking a long trip, bring snacks and drinks with you. The less you have to rely on pricey airport food and other on-the-go conveniences, the lower your costs will be.
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Save on gas: Road tripping? Save money on gas by using an app like GasBuddy to find the cheapest gas station on your route.
Pro tip: See which credit cards our experts recommend for the holidays.
🎉 Keep hosting simple
It’s always nice to host friends and family, but you don’t have to break the bank to do it. Consider making your party a potluck so you don’t foot the bill for all the drinks and food. Repurpose decorations from years past rather than trying to outdo what you’ve done before. The most important thing is spending quality time with your guests.
☃️ Look for low-cost or free activities
You can create holiday memories for little (or no!) money. Some ideas include:
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Research free local events: Look for local events hosted by your town, city, county or even a local church.
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Take in the decorations: Take a walk or drive with your family to enjoy neighborhood light displays.
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Do a cookie exchange: Ask friends and family to bring a batch of their favorite holiday baked goods to swap. Everyone will go home with a variety of treats — and you won’t have to spend as much time in the kitchen.
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Consider crafts: From gingerbread houses to homemade ornaments, crafting with your kids can be a fun way to pass the time — and make some low-cost decorations for your home.
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Volunteer: The adage, “It’s better to give than receive,” is especially true during the holidays. Consider volunteering your time at a local food bank or other charity for a fulfilling experience that doesn’t cost a penny.
💵 Pay with cash
Studies have proven that it hurts more to spend cash than it does to swipe a credit card or add an item to your online shopping cart. By paying for holiday expenses with cash, you’ll be less likely to waste money on impulse buys and more likely to think more carefully about what you’re buying.
Pro tip: When you plan a holiday shopping trip, bring only the amount of cash you want to spend. When your money is gone, resist the urge to pull out a credit or debit card to cover any overages.
🙅♀️ Avoid impulse buys
Many stores have perfected the science of putting items in certain spaces to encourage impulsive spending. That’s why you’ll find candy and drinks by the register and tempting displays on the end caps of every aisle.
These stores are taking advantage of the fact that about 73% of Americans say most of the purchases they make are unplanned. But that extra splurge every time you go to the store can add up.
So, make a list of everything you plan on buying and make a point of buying only what’s on the list.
A happy holiday doesn’t have to cost a ton
The holidays are a favorite time of year for many, including me. But you don’t have to break the bank to embrace the joy of the season and make great memories. Use the tips above to avoid overspending this year and start the new year on strong financial footing.