How to Rein in Your Holiday Spending – 7 Ways

“‘Tis the season to be jolly,” goes the old song, but for many of us, ’tis the season to go in debt and feel financial strain.

You might have thought that the days of resisting peer pressure ended in high school.  However, if everyone around you is spending elaborately for the holidays–for presents, decorating, and parties–you may feel the pressure to do the same, which can pack a painful punch to your wallet.

There is nothing worse than the holiday spending hangover that hits in January when you get that large credit card bill.

However, every December doesn’t have to be a financial strain if you begin implementing steps to rein in your spending.

7 Strategies to Manage This Year’s Holiday Spending

This year, resolve to stay in your budget with these 7 tips:

How to rein in holiday spending

1. Pare Down Your Giving List

Look at who you give presents to.  Do you give to your mailman, hair dresser, babysitter, cousins, aunts, uncles, friends?

Yes, giving gifts to everyone is nice, but is it something you can afford?  If not, you may want to limit your gift giving.

If you’re worried you might hurt someone’s feelings, there is nothing wrong with asking if they would be fine with not exchanging presents this year.  If that makes you uncomfortable, consider giving the gift of your time instead.  Maybe you could give Aunt Sally a certificate for one lunch out together.  Then, you don’t have to come up with the money immediately but sometime later in the year when she chooses to redeem the certificate.

2. Encourage a Gift Exchange

Rather than buying all of your brothers and sisters or all of your nieces and nephews presents, see if they’d be willing to have a gift exchange instead.  Everyone picks a name, and that is the person you buy a present for.  You’ll save quite a bit of money buying for just one person instead of several, especially if you have a large family.  Just make sure to agree on a set financial limit so the gifts everyone receives are relatively equal.

3. Set a Financial Gift Limit

If you have the tendency to buy more, and more, and more, as the season goes on, set a financial limit.

Determine a set amount that you’ll spend for Christmas gifts.  To be more precise, break that amount down among people.  For instance, you’ll spend $500 on gifts this year.  You’ll spend $100 on each of your 3 kids for $300; $50 for your parents, $100 for the various service givers like babysitters, teachers, etc., and $50 for your spouse.  This will help you stay within your budget.

4. Set a Number of Presents Limit

Some people give their children three gifts each Christmas because Jesus received three gifts from the Wise Men.  This is one approach you could take.

When you have a set limit of presents to give, you don’t have to worry about overspending or snagging the best deals.

If you feel bad about limiting the number of gifts you give your children, consider this mom’s opinion that most of us can relate to, “When I think back to when I was a child, I don’t remember what I got for Christmas.  But I remember the things that we used to do together, when we would go out and look at Christmas lights or when I would make cookies with my mom” (Today).

Your children may initially balk at only three gifts, especially if you’ve given them a mountain of presents each year, but in the end, they’ll cherish having more time with you, and you’ll be making memories.

5. Put Up Your Tree Later

Who says a Christmas tree has to go up immediately after Thanksgiving?  If you wait longer, you can get a deal.  “By the middle of December last year, artificial trees were already an end-of-season sale item, with major department stores and home and garden stores discounting as much as 50 percent” (Good Housekeeping).

One blogger shared that one year when money was particularly tight, her husband didn’t shop for the Christmas tree until Christmas Eve.  The man selling the trees actually gave the tree to him for free since he wasn’t likely to sell any more.  In cases like this, procrastination can pay off.  If you like having your tree up, there’s no reason why you can’t put it up on Christmas Eve and keep it up into January.

6. Find Frugal Dishes to Pass

When you attend a holiday party, you typically have to bring a dish to pass.  The best way to save money is to pick an economical dish to pass.  Make a dish from items that you already have in your house.  Or, offer to bring a vegetable platter.  If you have a membership to Costco you can buy veggies like baby carrots in bulk for a very reasonable price.

7. Make Your Own Photo Christmas Cards

Going to a portrait studio and having pictures of the kids taken and turned into Christmas cards can cost $50 or more.

Instead, use a tutorial like this one to take great pictures of your kids yourself.  Then, take advantage of one of the many photo sites that offer discounts on holiday cards.  You could easily save 50% or more by doing it yourself.

Strategies to Manage Next Year’s Holiday Spending

While it’s too late in the season this year to utilize all of the money saving strategies available, you can start planning now to spend less money next year.

Begin Saving in January

How many of us scramble in November and December to come up with money to buy holiday presents?

It’s silly, isn’t it?  Every year we know Christmas comes in December, but every year we scramble.

Next year vow to do it differently by saving money all year long.  If you want to spend $600 on the holidays, including presents and parties, save $50 a month for all 12 months.  That’s much more manageable than trying to squeeze that money out of your budget in December or trying to find the money to pay off your credit card debt from Christmas shopping come January.

Open an account somewhere like Capital One 360 Savings where you can set up a sub-savings accounts.  Then have the money automatically withdrawn each month.  You don’t have to think about it or have the discipline to save the money because it’s automatic.  You’ll be surprised how easily the money accumulates with very little financial pain for you.

Another option is to set aside “extra” money for holiday gifts.

For instance, I save the rewards from my credit card for Christmas presents.  By the end of the year, I typically have $400 to $600 that can be redeemed for gift cards or Visa cards.  If you get a tax refund, you could set aside a portion of that money for Christmas presents.  Using a search engine like Swagbucks doesn’t seem like it would add up, but you could easily earn one $5 Amazon gift card each month.

Wait Until Black Friday to Buy Your Gifts

Each year I try to buy my gifts early, but this backfires on me for two reasons.

First, my kids often change their minds about what they want for Christmas.  What they want in July can be much different than what they want in December.

Second, I have one relative who is notoriously fussy about the gifts she receives and often wants to return them.  If I purchase her gifts too early, the return time has expired before she gets her gifts.

Instead, I’ve now switched to shopping mainly on Black Friday.  I don’t brave the stores and the crowds but instead do my shopping online from the comfort of home.

There are several advantages to this:

Free shipping.  Most retailers offer free shipping during Black Friday and Cyber Monday.  That alone can save you $10 to $50 with every purchase.  If free shipping isn’t automatic, look at sites like to get free shipping codes.

Steep discounts.  Retailers want to draw in customers, so they offer steep discounts.  This year, my son needed jeans and my daughters are obsessed with all things Frozen.  I bought my son’s jeans on Black Friday for $7.50 each with free shipping, and I was able to get Frozen t-shirts for my daughters for $4.99 each with free shipping.

Rebates are available.  When you purchase online, you can also take advantage of rebates.  Stores like Kohl’s routinely offer large rebates on Black Friday sales items.  In addition, because you’re shopping online, you can take advantage of sites like Ebates to get even more money back.


The end-of-the-year holiday season doesn’t have to be a time of enormous financial strain, especially if you utilize these strategies.

What is your favorite way to manage holiday expenses?

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Published or updated December 11, 2014.

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