10 Holiday Budgeting Tips to Help You Control Your Spending


According to a report from Deloitte, the average holiday spending for 2021 increased to $1,463 and is up 5% year-over-year from the previous year. Many retail executives believe that shoppers will be letting loose on holiday budgeting and spend more this holiday season.

With so many things to spend on – from buying gifts for loved ones to the expenses needed for that family vacation – it can be very easy to be sidetracked on spending more than what you earn during the holidays. 

And once you start going down that road, you’ll find yourself in debt sooner than later.

To help you get control of how you spend, we’ve prepared a list of tips that will get you through the holidays without breaking the bank. 

But before we discuss each one in detail, here’s an outline of the tips we’ll discuss in this post:

  • Tip #1: Set Your Holiday Budget
  • Tip #2: Know Who You’ll Be Buying For
  • Tip #3: Go With Cash Instead of Credit Cards
  • Tip #4: Start Your Holiday Shopping Early
  • Tip #5: Take Advantage of Cashback Apps
  • Tip #6: Shop at the Right Time
  • Tip #7: Avoid Impulse Buying By Having a Cool Down Period
  • Tip #8: Take Advantage of Browser Extensions That Help Save Money
  • Tip #9: Be Wary of the Free Shipping Bait
  • Tip #10: Think About Your Expenses for the Coming Year

With that, let’s discuss the top holiday budgeting tips to help you control how you spend.


Tip #1: Set Your Holiday Budget

If you want to get better at handling your own money, then you need to start by creating a budget. When going through your finances, we find that it’s easier when you break each need into small, individual goals.

For example, you may want to minimize your spending on holiday gifts to just $750 so you and your family can go on a vacation.

With that budget, you can set an estimated amount for each person you want to give gifts to as this will help you stick with your financial plan. Consider how much you’d be willing to shell out for each individual and compare that to your gift budget to see if the amount is ideal for you.

When you spend time looking at your finances, you’ll be able to understand just how much you are capable of spending on your holiday budgeting.

If you feel that the total amount isn’t possible because of other financial responsibilities, then you can cut this down to a number that will work for you.


Tip #2: Know Who You’ll Be Buying For

Do you have a list of people whom you plan to buy gifts for? If you don’t, then you might want to come up with one right now.

Here’s an example of how your list will look if we take the $750 gift budget from the above:

  1. John and Annie $200
  2. James $150
  3. Lisa $100
  4. Farrah $100
  5. Michael $100
  6. Timmy $50
  7. Connor $50

It can be tempting to feel overly generous during the holidays but you don’t have to buy gifts for everyone especially if it means landing in debt. 

With your gift list, you want to highlight those that you’re close to. If you’ve gone overbudget, cut out acquaintances and people you don’t know well. 

Keep in mind that each person you add to this list also adds to the total spend.

If you really want to buy someone a gift but don’t have the holiday budgeting for it, then you can always send them a sweet holiday card or a handmade gift instead. 


Tip #3: Go With Cash Instead of Credit Cards

Which one is easier, handing money over the counter or swiping a credit card? The second option is the most obvious answer.


That is why researchers have found that people spend more money when using credit cards instead of cash.


Giving out money whenever you make purchases lets you see how much you have left while a credit card makes you feel like you have an endless pot of gold right in your pocket.

To help with your holiday budget, you may want to skip the cards instead and go with cash.

Here’s one example of how you can go about this:


Holiday Budgeting Using Envelope Method

Before you head out and go holiday shopping for gifts, put your budget (let’s stick to $750) in an envelope and place it in your pocket where it’s safe. As you buy items, take out the amount you need to spend directly from the envelope and follow your spending list. 

In fact, it’s crucial that you stick to your list because once you run out of money in the envelope, you won’t be putting more money back in it to make up for overspending.

After paying for all the gifts for everyone on your list, you should then put the cash back into your bank account and keep it there. Having some savings after your mini shopping spree can go a long way in helping you avoid debt. 


Tip #4: Start Your Holiday Shopping Early

Instead of waiting for the full-blown holiday season to arrive, it’s best to get your shopping done early. This lets you take advantage of cheaper prices and deals that are available.


You may not already know this, but some retailers actually raise their prices to be higher than usual during the holidays.


While people are under the impression they’re spending less, they might be spending a significant amount more. 

Another benefit of starting early is that you get to monitor the price changes over time and make comparisons. 

It might look like you’re just saving a few bucks here and there, but imagine that you’re buying 10 gifts and you save $10 on all of them. That’s $100 extra in your pocket.


Tip #5: Take Advantage of Cashback Apps

Once you start buying things – whether online or in-person – you want to take advantage of shopping or cashback apps as much as possible. These apps can help you save a ton of money while allowing you to earn rewards for purchases.

There are shopping apps that let you search for available discounts and coupons when shopping online.

Here are a few cashback app options:

  • Ibotta
  • Fetch Rewards
  • RetailMeNot

For purchases you make, you can earn shopping credits that you can redeem for other items.

There are also apps that offer cash back for buying items directly through their platforms. Some even let you submit receipts so you can earn even more.


Tip #6: Shop at the Right Time

There are many year-end sales, discounts, and promotions that will let you save up on your holiday spending if you plan ahead of time. Two popular examples of these are Black Friday and Cyber Monday sales.

Preparing ahead of time will let you secure great deals especially when you buy at the right time, letting you save a lot of money.


Many major retailers will announce these deals beforehand so you want to check them out prior to the holidays and see if they have anything that would match your gift ideas.


You may even take advantage of holiday sale extensions to make up for the fewer sales than they had last year. When you prepare and plan well before these important dates, you can truly save on costs and grab deals that you wouldn’t be able to get. 

Of course, keep in mind that end-of-year sales are not the only way to save money. They might not even be the best deals, depending on the retailer.

Because of this, you’ll want to combine this tip with tip #4. If you started early, you’ll know the sales that are true gems and be able to take advantage of them. 


Tip #7: Avoid Impulse Buying By Having a Cool Down Period

Impulse buying is a common habit we have especially during the holidays where sales, promos, and discounts abound. So, when you see something that you really like but have already spent money earlier, you want to try a cool-down period for at least 24 hours.

This period is when you put on hold any unplanned purchases and see if you still want them a day or two later. 

Once the cool-down period is up and you still want to buy the product, go ahead and do so especially when it’s within your budget. But if you find yourself no longer interested in it, then good job! You just saved yourself some money that you can spend elsewhere.


Tip #8: Take Advantage of Browser Extensions That Help Save Money

Believe it or not but money-saving browser extensions exist. If you haven’t caught up to this trend yet, you might be missing out on some excellent deals.

Smart app developers have designed these extensions to help people easily locate discounts and promo codes for websites that they shop on. With just a single click, users can easily apply codes directly and save money as they purchase their desired items.

What makes these browser extensions even better is that they are mostly free to use and are very easy to install as well.

A few examples of money-saving extensions you can check out are:

  • PriceBlink
  • Honey
  • CouponCabin


Tip #9: Be Wary of the Free Shipping Bait

You may have noticed that many online retailers and merchants offer free shipping deals when you reach a specific amount for your purchases in their stores. For instance, they may give you free shipping if you buy more than $200 worth of items.

If you don’t reach that amount, then you’ll have to pay a costly shipping fee, which these sellers clearly show on their websites or shops.

Most of the time, these free shipping offers are bait that will trick people into thinking that they’ll be getting a bargain if they spend more. 

Although it may seem tough, the decision should be straightforward: don’t go the free shipping route if you didn’t plan to buy a lot of items in the first place. In that case, shipping fees are often cheaper. 


Tip #10: Think About Your Expenses for the Coming Year

There’s no doubt that the end of the year is one of the most exciting times for most people. Not only do they get to spend more time with their loved ones but they also are presented with numerous deals that can be quite overwhelming.

Once you get overwhelmed by these offers, you might find yourself overspending on gifts as well as other things you didn’t plan on buying.


A great way to remind yourself not to spend past your holiday budget is to consider the expenses for the following year.


Think about how your life will be next year if you overspend now. You might have a renovation planned ahead or need to make repairs to your car that you don’t want to skip.

Although this can dampen some of the excitement of the holidays, you will be happy knowing you’re more financially secure for the upcoming year.


Holiday Budgeting Recap

Now that you know how to approach your holiday budgeting, you’ll have more control over how much you spend this coming holiday season. These 10 tips provided should give you a solid start and will help you avoid overspending for the coming year.

If you don’t have a budget yet for the holidays, then you can always get help from us at 121 Financial Credit Union.

One of the best deals we have for this season is that members with good standing can borrow as much as $1,000 with no credit check needed.

What makes our Holiday Line of Credit program great is that you can easily renew it for the next year while accessing your needed funds can be easily done just like with a debit card.

If you’re interested in our holiday program, learn more and apply now.

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