Cut the Holiday Spending and Make Memories

If holiday gift giving is part of your culture and traditions, there are many ways to show your fondness for friends and loved ones without major holiday spending. With a little planning, you can reduce the added pressure that comes with holiday gifting, and make sure you start 2025 without more debt.

NerdWallet’s 2024 Holiday Spending Report shows that consumers expect to spend an average of $925 on gifts during the winter holidays. While 32% of holiday shoppers think it’s important to purchase gifts for others, 10% plan to dip into emergency savings to pay for gifts and 28% of shoppers who used a credit card still haven’t paid off 2023 holiday debt. While tools like a holiday savings club account and a balance transfer credit card can ease these major stressors, there are steps you can take before big holiday spending hits your budget.

Build a Holiday Spending Plan

If you’ve planned ahead, you might have a closet full of gifts that you bought on sale and paid for throughout the year. If not, you can still find great deals on new products before December. Even better, if those you’re exchanging gifts with are also thrifty, suggest a spending limit, and consider ‘almost new’ sources such as consignment shops and online resellers where you can stretch your gift-giving dollar further.

Review everything you spend money on during the holidays. Beyond gifts, there is decorating, gift wrap, baking, and entertaining. Food costs are still high, so if you generally host the holiday get-togethers in your family, consider providing the main course and dessert, and ask guests to bring appetizers and side dishes. Or host a midday gathering with small plates and finger foods instead of a traditional meal.

The following tips can help you focus more on the people who will share your holiday than the money you spend on gifts.

Six Tips to Reduce Holiday Spending

1. Set a Budget. Know how much you can afford to spend on each person and do not exceed that number. You don’t want to have to choose between paying your bills and buying gifts. Keep your shopping list and tally of what you’ve spent with you as you shop.
2. Look for Sales. Black Friday has become a week-long event for some retailers, kicking off before Thanksgiving and extending through Cyber Monday. Have your gift list ready and compare prices at multiple retailers. Some online retailers even offer a notification service that will alert you when the price has dropped. Get prepared and stay flexible to let those sales reduce the impact on your holiday spending.
3. Maximize your discount. Often you can add an item to your online cart and wait to purchase it. Many retailers will email you a coupon the next day to entice you to complete the sale.
4. Repurpose. Make a vow not to buy any new decorations to fill up your closets. Consider taking apart wreaths and remaking them for a fresh look. You could find pinecones and greens in the woods, along with other natural items to use, or visit a dollar store for accessories. Finally, you could host a ‘decorating swap up’ with neighbors to exchange items. Secondhand is still new to you, and it won’t disrupt your holiday spending plans.
5. Draw Names. If you have a large family, consider drawing names instead of buying gifts for everyone. This not only saves money, but you can get a larger item tailored to the individual instead of buying for everyone.
6. Be Crafty. Consider making gifts instead of buying them. A homemade scarf or favorite baked goods may mean more than something you bought and comes with the added gift of your time and talents.

Keep Saving While You Celebrate

While gift-giving may be fun, the best holiday spending you will do is spending quality time with those who are important to you. People will not really remember much about the food that was served or most of the gifts they received. The memories that matter most lie in the spirit behind a gathering. Keep that in perspective and you can have a joyful season that doesn’t through your budget into chaos!

Posted In: Guest Blog, Saving