The 7 Best Tips to Curb Your Holiday Spending

Ask the Expert, Featured Article
Christmas budget tips

The holidays can get expensive—fast. A recent Gallup poll estimates that Americans will spend an average of $830 on Christmas gifts this year, up from $720 in 2014. Not only will we spend, but many of us will overspend, which can stress out our budgets for the rest of the year. Here are seven tips for saving and budgeting this year—without being a total Scrooge about it.

1. Make a list

It may sound obvious, but experts say many people don’t do this simple yet crucial first step. Nothing can send you off the rails quicker than not having a gameplan in place before you start shopping.

Your list needs to be very detailed and include every person you need to shop for and how much money you plan to spend on each person. “If you don’t have a list on your phone or on a piece of paper, you’re going to give in to impulse purchases,” says Beverly Harzog, consumer credit expert and author of The Debt Escape Plan.

Your list should also include all of those holiday “extras”—the new outfit for the company holiday party and small presents for teachers, coaches, babysitters and hair stylists. Planning to throw a get-together? Put food and beverage expenses on the list, too. If you’re not careful, a few little extras can add up to big money.

Lauren Greutman, a frugal-living expert at I Am That and creator of the 30 Days to a Debt-Free Christmas Challenge, agrees with the need for a detailed list. “Think ahead and spend what you can actually afford instead of going into more debt over it,” she says.

Clare Levison, CPA and author of Frugal Isn’t Cheap: Spend Less, Save More, Live Better, also touts the need for a list to prevent you from getting swept away by the doorbuster deals and seemingly stellar savings on Black Friday and Cyber Monday. “While something might be a good deal, if it’s not on your list, you’re setting yourself up to overspend,” she says.

2. Buy gifts with cash or a prepaid debit card

Cash is great, says Greutman, but it’s easy to lose—and isn’t helpful for online shopping. Credit and debit cards are convenient, but there are important things like interest rates and security to consider. Another option is to use a prepaid debit card from a company like Netspend or open an online checking account just for seasonal spending, says Greutman.

“You can take the money you’ve saved for holiday shopping and fund this one card that you can use at all the stores,” she says. “[Hackers] can’t get any information from your bank account, it’s good for online spending, and it helps with your budget. If you’ve set aside $600 for Christmas shopping, put $600 on the card, and when it’s done, it’s done.”

3. Store credit cards can save you some money—with some conditions

You’re standing in line with a cart full of purchases, and the cashier asks if you want to save 15 percent by applying for a store credit card. Cardholders also often receive coupons and special alerts for sales, which can help you save money all year.

It sounds tempting, but should you go for it? Yes, says Harzog, but only under certain circumstances.

“If you know you’re going to be spending a lot of money at a store and could really use that 15 percent, look up the terms and conditions for that retail card online,” Harzog says. “If it’s something you can live with, go ahead and get that 15 percent. But you have to vow that you will never carry a balance, because most of these interest rates are in the 20 to 25 percent range.”

4. Break down that wish list

Levison recommends involving the entire family in discussions of holiday budgeting and spending—when kids are old enough to know the gifts under the tree don’t come from a workshop in the North Pole, that is. The conversation is an important teachable moment about money, and it can prevent overspending and also buying gifts that people don’t really want.

“When your children put that wish list together, the family needs to sit down and dollarize it and see if it’s realistic or what could be cut out if it’s not within budget,” Levison says. “It’s important to make kids aware that those gifts have a financial element associated with them and that the family budget isn’t unlimited.”

If you want to maintain the element of surprise, ask your children or spouse to pick some items that are similarly priced, with the understanding that you’ll be purchasing just a few of them.

5. Kids’ gifts don’t need to be “equal”

Levison suggests letting go of the need to make gifts equal among kids—either the same number of gifts or the same amount of money spent per kid.

“Younger children may not need as big of a budget as older children,” she says. “Perhaps your older child wants a laptop for school, while your younger child is happy with much simpler, less-expensive toys. Parents make the mistake of just buying things the younger kids don’t even really need or want just to keep it equal with the older children.”

6. “Stack” your savings online

Greutman says there are lots of ways to save online. First, many Black Friday sales start online earlier during Thanksgiving week. Purchase discounted gift cards at a website like, and use them to buy gifts. You can also buy gift cards at your supermarket to earn gas points or discounts on future purchases for year-round savings. Shop through portal sites—Greutman likes—to earn cash back while shopping at retailers such as Walmart, Old Navy and Kohl’s. Lastly, search for coupon codes online to apply to purchases at checkout.

7. Make memories—for free

Levison suggests asking your kids to make two wish lists: one for gifts and another for activities they’d like to do as a family. Sit down together and add them to your calendar: attending the local holiday parade, watching movies and sipping hot chocolate at home, baking cookies or making Christmas cards. Children need and will cherish time together far more than any toy or gadget. Levison says, “Those things are what the holidays really should be all about.”

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