December 8, 2023

11 Holiday Shopping and Budgeting Tips for Smarter Spending

The holiday season is a time for celebration and, for some, celebrating might look like a lot of shopping, thanks to Black Friday, Cyber Monday, and many big savings events.

But it can be easy to get carried away with spending, especially when you have a chance to make major purchases with big price drops. This is why holiday budgeting is so important.

Follow this quick guide to help keep your holiday spending in check and avoid overdoing it this season.

Keeping your holiday spending on budget

Budgeting is the best way to limit your spending and avoid financial stress. A good budget lays out clear numbers for how much you can spend on different things, like monthly living expenses or weekly groceries. Budgets can also make avoiding impulse purchases easier, especially when you hit a limit that you already set. Budgeting is one of the many valuable strategies that help avoid overspending.

Creating a holiday budget can help make sure that your necessities are covered, while not overspending on the holiday extras. Set aside or plan to spend a specific amount on gifts for everyone. You might even create a small “gift fund” based on your average holiday budget, a place where you can add money throughout the year to avoid overspending when the holiday season rolls around.

11 essential holiday shopping and budgeting tips

Creating a holiday budget lets you buy gifts for your loved ones while keeping you in good financial health. Here are some great ways to stay on budget:

1. Get a head start

Start planning your holiday budget as early in the year as possible. Set a limit for how much you want to spend in total, then divide the cost between your friends and family. For example, you might decide to spend $200 for the year and have five people to buy gifts for, meaning each person’s gift can cost about $40. If you have a partner or children, you can help them set limits as well.

2. Categorize your spending

Separate your expenses into different categories like gifts, entertainment, decorations, clothing, and travel. Set a limit on each one using your total budget as a guide.

Consider including an unexpected expenses category for any last-minute additions, like a holiday party, secret Santa, or a workplace gift swap.

3. Budget for each person

Divide your total gift budget by the number of people you’ll be gifting. To make things easier, many people like to keep gift budgets even across the board, except for their closest family and friends. But if you want to give someone special a more expensive present, budgeting for each person allows you to do so.

4. Brainstorm ideas early

You probably won’t know every gift you’ll buy for every person in advance, but you can still start planning some ideas now. People getting gift cards or money should be separated from those you’ll give physical presents to since you won’t need to watch for sales or wait for them to ship closer to the holidays.

5. Watch for deals and steals

Black Friday and Cyber Monday are great times to find discounts, but you might discover better prices throughout the year. Some stores actually raise their prices before major events to make their discounts look bigger.

If you can, scope out your gifts a few months ahead so you can watch for good deals.

6. Avoid impulse buying

Don’t make rash decisions, whether for yourself or your loved ones. Big purchases, especially, should be planned — anything over $100 should be treated as a big purchase.

7. Stick to spending limits

Put a hard cap on your spending, and don’t go over, no matter what.

8. Be mindful of your credit

If you’re putting anything on a credit card, try to avoid spending more than you already have or will have by your next payday. Always make your payments on time and if you have extra funds, use them to pay down your credit cards before saving. This is all part of using credit responsibly.

9. Take advantage of credit promotions

Some credit providers offer exclusive and limited-time promotions, like low APRs or interest-free payments for a period. You can save a lot of money by taking advantage of these offers.

10. Consider gift alternatives

It’s the thought that counts. You don’t always have to spend lots of money on friends and loved ones. Consider handmade gifts or an experience or activity — like a camping trip or a hand-made sweater. You can stay on budget by being creative.

11. Track, track, track

Keep all your receipts, track what you’re spending throughout the year, and organize the information in spreadsheets or a bookkeeping app. This will give you a better idea of what you spend each year and help with your future budgeting.

You might also notice more about your spending habits, like areas you always underspend or overspend, which can help you create more accurate budgets.

How can I reduce my holiday spending?

Gift expenses can balloon fast. Here’s how to stay in budget.

Shopping earlier in the year is always the best idea, especially if you can capitalize on great deals and discounts. But consider making or crafting holiday gifts with items you have around the house to save money instead of buying them.

Sometimes, it’s better to give presents that come from the heart. Part of the lifecycle of love and money is realizing you don’t always have to spend money on someone to show them you love or care for them.

How to recharge your finances after the holidays

Budget or not, it’s still possible to get yourself into a tight financial spot. Sometimes, we even extend budgets beyond what we can reasonably handle — some holiday sales are too good to pass up or we want to buy someone the perfect gift. In either case, it’s helpful to know some ways to get back on track and recover financially after the holiday season.

Here are some quick post-holiday budgeting tips and money-saving strategies:

1. Assess. Review your budget for the year, how much you actually spent, and what you can change for healthier finances next year.

2. Build a new budget. Put together a budget for the year ahead as soon as possible.

3. Know your limits. Whether you’re paid hourly or salaried, know your spending limits by being realistic about how much you make. Stick to common budgeting tips to stay on track and keep yourself balanced.

4. Plan your purchases. Choose what you will buy throughout the year and who it will be for, including yourself.

5. Watch for sales. Instead of buying everything during the holidays, look for sales earlier in the year or take advantage of Black Friday-like deals.

6. Get supplies early (or very early). Order wrapping paper, ornaments, decorations, treats, and other holiday items throughout the year to save money when the holiday season starts. Buying them after the holidays are over, while stores have them deeply discounted, is also an option for the next holiday season.

7. Get travel-ready. If you travel for the holidays, start saving for tickets, supplies, or fuel ahead of time. This will keep you from scrambling to buy a bunch of last-minute items you need right before leaving.

8. Consolidate your debt. If you use multiple credit cards to shop, consolidate them into one account, ideally one with a low-interest rate.

9. Set a savings goal. Start saving by putting extra money aside. Make sure you understand how much of your paycheck you should be saving, and try to set aside a certain amount just for holiday gifts.

A post-holiday financial recovery: Do it right with EarnIn

Planning how you’ll spend your money is crucial to avoid overspending — both during the holidays and throughout the year.

But if you do find yourself with unexpected purchases that cut into your holiday budget, you can use EarnIn’s Cash Out tool to access your pay as you earn it. With EarnIn, it’s payday every day, with up to $150 a day and up to $750 every pay period of available from the money you’ve already earned.

It’s the best way to keep your bills and finances on track — while skipping the late fees, overdraft fees, credit cards, and payday loans — preparing yourself for a more financially flexible and prosperous year ahead.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

1. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. Restrictions and/or third party fees may apply. For more info visit earnIn.com/TOS.