Yes, it’s that time of the year again! And if you’re anything like me, you’ve buried your head in the sand and refusing to dive into the holiday shopping madness.
But even if you didn’t plan ahead, you can keep your cool and stay on budget during the holiday season. Here are some helpful tips to prepare for Christmas, without busting the budget or going into debt.
Apply for a new travel rewards credit card and use Christmas spending to earn a free trip
Note: this is only if you are already free of all credit card debt and able to pay your bill IN FULL every month. If you struggle with consumer debt, only use cash on hand for holiday spending.
I highly recommend the Chase lineup, starting with the Chase Freedom Unlimited card. There is no annual fee and you earn $200 cash back for signing up. Next in line, and even better than the Freedom card, is the Chase Sapphire Preferred card. Earn 60,000 reward points after you spend $4,000 within the first 3 months of opening your account. You can do A LOT with 60,000 points. Like fly roundtrip to Nice, France.
Check out the Into to Travel Hacking post for more info on how to take advantage of travel rewards.
Use your travel rewards credit card to make purchases
If you already have a travel rewards card and don’t want to sign up for a new one, use this card for all your holiday spending. This way you can earn points that can be redeemed for cheap or free travel next year. Again, this only works if you pay your bill in full every month!
Use saved travel rewards points when traveling
If you already use a travel rewards credit card, take a look at your reward point balance before booking your next trip. Since traveling during the holiday season is especially expensive, it’s nice to use those rewards points rather than forking over hundreds, even thousands, on airfare just to visit all the extended family.
Save for later!
Make a list of everyone you need to buy a gift for
Planning ahead is essential if you want to stay on budget, or at least somewhere near the budget, this season. I like to start my planning by writing a list of everyone I feel the need to buy a gift for.
Once you have this in writing, it’s easier to map out what gift to look for and stay organized, tracking what you already have or what still needs to be purchased.
Add a dollar amount to every person on your list
Begin the budgeting process by setting a dollar limit to everyone on your list. Most likely, you really don’t need to spend $30 on Bath and Body Works lotion for Aunt Suzie when the $5 gift lotion at Target would make her just as happy.
Set limits and then stick to them!
Prioritize your list
Not everyone really needs a gift. While your coworkers might appreciate the fun little gift bag of designer hot cocoa mix, do they really need it? Will they think less of you if instead you make a batch of holiday cookies to share?
No, they won’t miss the gift bags!
We all end up with so much stuff during the holidays, most of which I usually end up regifting or throwing out.
This year, stay true to your personal values of what the holidays mean to you, stick to your budget, and don’t be afraid to stray from the norm of holiday consumerism.
Don’t forget to factor in sales tax!
As you set price limits and create your Holiday budget, don’t forget to factor in taxes! That $20 slow cooker on sale at Costco is actually $21.85 where I live. Not a big difference, but when you go out and purchase $500 worth of gifts, you’re actually spending around $546. The little extra adds up throughout the season.
Host a cookie exchange
I LOVE holiday cookies! I love the variety and the fun of all the decorations and the joy of making something that everyone else enjoys. But the thought of making all those different kinds of treats?? A little overwhelming.
Save money this year by giving homemade cookies to coworkers, friends, family, teachers, host gifts, or neighbors. But rather than make them all yourself, make a couple dozen of your favorite kind, then host a cookie exchange party. Everyone makes the same amount of cookies then you all exchange and gift wrap a nice variety of cookies.
These make a fun, yummy, beautiful and festive gift for just about anyone. It doesn’t hurt the budget and it’s a great way to share the season with friends.
Just don’t forget to get the invites out now!
Buy some gift bags at the Dollar Store for cookies
Speaking of not breaking the budget with a cookie exchange party, be sure to buy all the pretty and festive gift bags at the dollar store.
Better yet, stay ahead of the game next year by purchasing them on clearance right after the holidays this year!
Focus on experiences rather than gifts
Do some family budget friendly holiday experiences this year such as a community tree lighting ceremony, boat parade, tour decorated botanical gardens or visit Santa at the library for free photos.
Again, keep in mind what you value most about the season. Is it the gifts or the experiences that mean the most? Reminding yourself of what is most valuable to you and your family can help you withstand the pressures of societal traditions to spend money.
Take advantage of Black Friday deals
But only if the item is already on your list and conforms to your budget. Even better, take advantage of everyone else out spending money on Black Friday. As they buy the brand new 70” flatscreen TV, the barely used 60” TV needs to go. This means that some great deals can be found in your neighborhood. Keep an eye out for local postings like Facebook Marketplace, garage sales, Craigslist or Nextdoor as people sell or give away perfectly good products in order to make room for all their new loot.
Work some extra shifts
Earn some extra money to cover the holiday budget by working some longer days or adding in some extra shifts.
You could even consider taking on a short-term holiday job on the side. There are plenty of shops that need extra hands during the busy holiday season. While these jobs probably won’t cover all your living expenses or pad your retirement account, they can cover the cost of all your Christmas spending.
Use that holiday bonus
Normally I’d say that any bonus you receive should go straight to savings. But if you have a tight Holiday budget, this can be a good use of that extra windfall.
Keep holiday savings separate from regular savings
For those of savvy planners that started saving for Christmas back in March, here’s an extra tip: Keep your holiday specific savings separate from all other savings. This way, you won’t be tempted to dip into your other savings and go over budget with the Christmas decorations.
If you’re tempted to go over budget, purchase a preloaded debit card and keep holiday savings on the card, this will keep you in check and prevent debt.
Sell unused stuff
Help pad the Christmas budget by selling unused items accumulating in the garage and around the house. Not only will it help alleviate the financial stress of the holidays, it will make spring cleaning that much easier!
Sell your clothes to consignment websites like Thredup and use the funds to purchase holiday wear
I love, love, love consignment clothing sites. ThredUP is my favorite. Anytime I know I need to update my wardrobe or purchase an event specific outfit, I send in clothes and shoes I don’t like or need anymore, get credit for my items, then use that credit to purchase new or very gently used outfits.
This helps me stay on budget when I need a new cocktail dress or a fun travel outfit for an upcoming trip.
Maximize on the post Thanksgiving sales
Black Friday isn’t the only sale of the season. There are deals to be had everywhere. Take advantage of steep discounts and coupons. But, be sure to stick to your list and your budget. Just because that $200 appliance is half off doesn’t mean you should get it instead of the $50 gift you had budgeted.
If you have the extra savings, purchase next year’s gifts on sale
If you wait to do your shopping until after the Holidays, you can make out like a bandit!
This is how I buy my decorations, holiday hosting supplies, gift wrapping and many of my gifts for the following year. Everything is literally 50-80% off! Don’t go into debt to plan ahead, but if you have the budget, this will save a huge amount of time, stress and money when next November and December roll around.
Pro tip: Keep gifts you collect throughout the year in the same location so you remember what you have! If you use a Christmas planner, write down what gifts you’ve already purchased and whom they go to, so that all you have to do is grab and wrap when Christmas rolls around next year.
Buy gift cards at Costco
I know there are some great sites that offer rewards or discounted gift cards. Unfortunately, this isn’t something I have experience with. But I do know that my local Costco has gift cards for less than the redemption value. I like saving money on the front end of my purchase, rather than hunting down my rewards or having to remember to use whatever value card the other sites offer.
For example, I love giving gift cards for movie tickets. Especially to my son since he loves them and I’d end up paying for his movies throughout the year anyway. For around $9.50 a gift ticket, he can go to a $13 evening show. That’s more than a 25% savings!
Beware of personal spending!
I totally get it. You’re out shopping for Grandma and come across the cutest purse. But that purse is perfect for you, not Grandma. So you buy Grandma the nice scarf and the purse for yourself.
It is so hard to do all this shopping and not throw in a treat for yourself. Especially as stress builds and you’re looking for that instant reward and excitement that a new purchase will bring you. Try to keep in mind the spirit of the holidays and resist the impulse to treat yourself along with everyone else on your list.
Keep a folder of all receipts and be mindful of return policies
Have you ever given someone a gift and then been asked for the gift receipt so they can get the right size or color they really wanted? And then realized that you have no idea where the receipt went? As a general rule, all receipts that need to be found are actually lost forever in the abyss of Holiday Chaos.
This year, try to plan ahead and avoid costly waste by keeping a folder for all receipts and be mindful of return policies. Then when Grandma tells you how much she actually hates wearing scarves, you have some options. You can return it for a gift card that she can use any way she likes, or, you can exchange it for that purse you really wanted to buy yourself in the first place.
Grandmas like happy grandkids afterall!
Consider skipping the traditions
Believe it or not, the holidays are what you make of them. You are under no obligation to conform to old traditions.
Don’t feel pressured into spending money on material things. Very few people really need more stuff. It’s just stuff.
You can spend money on more financially savvy gifts, like experiences, instead. Or, you can skip the traditions all together and form a new tradition of volunteering or setting a one-gift limit. Our family started doing a gift exchange so that we only have to purchase one gift total. This shifts the focus from receiving to spending time with loved ones. Which is really the spirit of the holidays.
Focus on what is most important
Even if you are just starting to think about your Christmas list now, you don’t have to succumb to the pressures of holiday overspending.
Spend some time to think about what means the most to you and your family during this season. Does it include massive amounts of stress and piles of presents? Probably not.
So take a deep breath, map out a quick and essential list of gifts, set a budget limit, then enjoy the season with friends and loved ones. Without going into debt or denting the savings account.