How to Keep Holiday Spending from Snowballing: 7 Holiday Budgeting Tips

The holidays have a funny way of sneaking up on your calendar — and your budget. One minute, you’re admiring the twinkling lights. The next, you’ve bought six gifts, matching pajamas, a concerning amount of wrapping paper and a decorative reindeer you absolutely did not have on your list.

Festive? Definitely.

Affordable? Barely.

Between gifts, food, parties, travel, decorations and all those little “it’s only a few dollars” purchases, holiday spending can add up quickly. And while nobody wants budgeting to put a giant BAH HUMBUG on the season, a little planning now can mean a lot less financial stress later.

So, before your shopping cart gets any big ideas, here are seven ways to financially prepare for the holidays.

Give Your Holiday Dollars a Job: Create a Holiday Budget

We know. “Make a budget” isn’t as exciting as “make cookies.”

But hear us out.

Before the holiday spending begins, decide how much you can comfortably spend overall. A good place to start is to look at last year. Check your bank and credit card statements and add up what you spent on gifts, decorations, food, donations, travel and everything else that made the season merry.

Surprised by the total? You wouldn’t be the first.

Use that number as a starting point for this year, then decide what works with your current finances. And remember to leave room for the little things that tend to sneak onto the list: stocking stuffers, shipping, wrapping supplies, teacher gifts, party food and that holiday sweater you suddenly need for Friday.
Need some help getting your everyday budget in shape first? Check out our Budgeting 101 article.

Set Holiday Spending Limits Before Your Cart Gets Any Ideas

Once you know how much you want to spend, set a few boundaries.

This can be especially helpful when using credit cards. Tapping a card makes checkout wonderfully easy. Sometimes a little too easy. Tap. Tap. Tap. And suddenly January shows up with a reminder of everything you bought in December.

If you plan to use a credit card, decide ahead of time how much of your holiday budget you'll put on it and keep interest charges in mind. If avoiding interest is a priority, paying with cash or a debit card may be another option.

However you choose to pay, the key is knowing your limit before the shopping begins—not after the receipts start piling up.

Keep an Eye on the Little Stuff: Track Your Holiday Spending

Big purchases get our attention. The little ones, however, are sneaky.

Five dollars here. Twelve dollars there. A cute ornament that looks just like your cat. A gift bag. Another gift bag because apparently none of the 14 bags in the closet are the right size. And, of course, your favorite eight-dollar peppermint mocha to fuel the entire operation.

Try tracking your holiday purchases as you make them. You can use a budgeting app, a spreadsheet, your phone or even a good old-fashioned notebook.

It doesn’t need to be fancy. You just need a quick way to answer the question: How much have I spent so far?

Because “probably not that much” is not technically a number.

Thoughtful Holiday Gifts Don't Have to Be Expensive

Some of the best gifts don’t come with a giant price tag.

Homemade cookies, a favorite family recipe, a photo album, a handmade gift or something meaningful passed down through the family can all make memorable presents without taking a big bite out of your holiday budget.

And Grandma’s famous cookies have never needed a gift receipt.

Think about what the person would genuinely enjoy. Sometimes a gift with a little creativity and thought behind it can mean more than something grabbed from a shelf during a last-minute shopping sprint.

Shorten the Holiday Gift List - Without Starting Family Drama

Have a big family? Buying individual gifts for everyone can turn holiday shopping into an endurance sport.

A family Secret Santa can keep the fun of exchanging gifts while giving everyone permission to buy for just one person instead of five, 10 or 20. Set a spending limit everyone agrees on, draw names and let the highly competitive gift planning begin.

Or try a White Elephant exchange. You’ll still keep the number of gifts under control — with the added entertainment of watching a perfectly reasonable group of adults battle over a blanket, a candle or a mouse-shaped mini waffle maker.

Traditions have to start somewhere, right?

Traveling For the Holiday? Plan Ahead

Heading out of town for the holidays can create a whole separate category of expenses.

Flights. Hotels. Gas. Meals. Parking. Snacks. More snacks because apparently everyone gets hungry the second the car leaves the driveway.

Start comparing travel options as early as you reasonably can so you have time to look at different dates, routes and lodging choices. If your schedule is flexible, compare the cost of traveling on different days or at different times.

Yes, the less-expensive option might occasionally involve a painfully early alarm. Your wallet may be more enthusiastic about this arrangement than you are.

If you’re driving, estimate costs for gas, food and overnight stays before you leave. Packing meals, snacks and drinks can also help keep road-trip spending under control.

And if you know holiday travel is coming, consider setting aside a little from each paycheck ahead of time. Future-you, standing in an airport holding a $9 sandwich, may be very grateful.

Leave Room for the Unexpected

Even the best-laid holiday plans can get interrupted.

The car needs a repair. The utility bill is higher than expected. Travel plans change. Something breaks at exactly the wrong moment.
Because life did not receive a copy of your holiday budget, and trust us, it never will.

If you can, leave a little wiggle room for unexpected expenses. You may never need it. But if something does pop up, having some breathing room can help keep one surprise from rearranging your entire holiday plan.

Holiday Budget FAQs

How do I get started with a holiday budget?

The first step is to add up your holiday expenses from last year. Check your bank and credit card statements and tally up what you spent on all your holiday-related expenses. Use that number as a starting point for this year, then decide what works with your current finances.

What expenses should I include in my holiday budget?

Gifts, of course, but your holiday budget may also need to account for food, parties, decorations, donations, travel, shipping, wrapping supplies, stocking stuffers and other seasonal expenses that can add up quickly.

How can I keep from overspending during the holidays?

Set a spending limit before you shop, keep track of purchases as you make them and leave a little room for unexpected expenses. Knowing how much you have spent - and how much is left in your budget - can make it easier to adjust along the way.

Less Financial Stress. More Holiday Cheer.

Preparing financially for the holidays doesn't mean sucking all the fun out of the season.

Quite the opposite. Having a plan can help you spend less time wondering where your money went and more time enjoying the people, traditions and moments you actually care about.

And if an unexpected expense adds itself to your holiday list, Moneytree is here to help. Need to turn a check into cash? Moneytree offers convenient check cashing with no bank holds. How about a little extra financial help? Explore our borrowing options to see what's available in your area.

Whatever the season brings — the merry, the bright and the completely unplanned — Moneytree is here with fast, friendly and convenient financial services when you need them.

For more tips on budgeting, saving and making the most of your money, visit the Financial Living section of our blog.