How to Stick to a Budget During the Holidays

By Jackie Lam, AFC®
Published on: 10/26/2023

Ah, the holidays. You might feel a mix of anticipation, warmth, togetherness, along with — you've guessed it — dread. Moneywise, dread that all that spending will loom over holiday joy and cheer like a dark, black cloud.

Fear of holiday debt hangover is real. According to LendingTree's 2022 annual survey, 35% of Americans took on holiday debt, and the average amount was around $1,500.

Just because money is tight, doesn’t mean you still can’t celebrate and spread holiday cheer with friends and family. Here are some simple ways you can avoid busting your wallet and stick to a budget this season:

1. Suggest a White Elephant or Secret Santa Exchange

No need to buy gifts for every family member, coworker, and neighbor. You can slash your gift-giving obligations significantly by suggesting a White Elephant game or Secret Santa gift exchange.

If you're going this route, be sure to set some clear rules. For instance, the White Elephant will replace buying gifts for each individual. You can also set a spending cap. For example, $25 to $30 per gift. That way, there's no second guessing as to what's an appropriate amount to dole out.

2. Make your own gifts

If you have a flair for arts or crafts, consider taking the DIY approach and making gifts instead of buying them.

If this feels intimidating, remember this: By no means do you have to be an craftsperson extraordinaire to create your presents. Looking up simple gift ideas on YouTube, TikTok or Pinterest can get your creative juices going. For instance, hot cocoa in a jar or a curation of self-care goodies make for thoughtful, well-received gifts.

Another idea? Slap those inside jokes and silly made-up phrases between you and your loved ones onto a mug or T-shirt. It can be less pricey than shelling something out at a retailer.

3. Make the most of old gift cards

Scoop up unused gift cards and see if you can use the last bit of them on holiday-related items—think greeting cards, stamps, gift wrap, home decor. Or maybe you can put the remaining balance of a restaurant gift card toward a holiday outing with some dear friends. While gift cards can expire, under federal law you have at least five years to use them. In addition, some states have separate laws that provide added protection in certain circumstances.

You can also resell unused gift cards. You'll never get the full amount of what the gift card is worth, but you can get something for them. The fees that popular gift card platforms charge can vary significantly, but expect anywhere from 85% to 92% of your card's value. There also might be one-time fees to look out for.

4. Consider a "birthdays only" pact

Agree with certain folks to celebrate their birthdays and keep it light on holiday gifts. It might take a bit of bravery to suggest this, but start by saying how you prefer to save money during the holidays. It has nothing to do with your feelings about that person or the relationship, but about not being stressed financially.

You'll be surprised at how many people prefer to go "all out" on their "solar return days" and go light during the spendy end-of-year. They might even be relieved that you suggested it!

5. Keep an eye out for sales throughout the year

To "spread out the spend," keep a watchful eye on sales from your favorite retailers year-round. It also helps to have a list of what those on your "to gift" list like, so you can purchase their presents at deep discounts.

To avoid going overboard during sales—it can happen to the best of us—decide on a spending limit for each shopping trip.

Or you can allocate a certain amount of your monthly budget toward holiday gifts. For instance, $25-$50 a month. To fit in that extra expense, consider cutting back on eating out a few times a month.

6. Opt for experiences, not things

Organize a bake off. Go on a holiday lights festival tour. Plan a winter hike. Volunteer to feed the homeless. Whatever your interests are, drumming up low-cost ideas for experiences, not items, can foster your bonds and create meaningful memories.

Besides sparing your bank account, experiential presents also can boost well-being. Research reveals that people are happier when shelling out cash on experiences, and not on possessions. As mentioned, aim to keep an eye out for inexpensive outings–or it could end up costing you more in the long run.

Final thoughts

Sticking to a budget during the final months of this year doesn't need to equal a boring, colorless holiday season. With some creative energy, a bit of planning, and the courage to offer suggestions on doing things differently this year, you can have a fun, memorable season that saves you money, time, and spares you unnecessary stress.

About the author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes,, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

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Written on October 26, 2023
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