Start Budgeting for Holidays Now and Save Big With Our Top Tips
Updated September 23, 2024 at 12:50 pm
With autumn nearly upon us, you may notice winter holiday decor creeping into your favorite major retailers’ displays. But the holiday season likely isn’t top-of-mind for most people. Despite this fact, planning for holiday gifts and travel early can help lessen your financial burden, so there’s no harm in starting now.
Use these holiday budgeting tips to save up for the season and keep your costs manageable.
Our Methodology Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
- Associated fees
- ATM access
- Balance requirements
- Customer service
- Interest-earning potential
Vault’s Viewpoint: Why You Should Start Budgeting for a Holiday Now
- Use a budget and spending limits as a starting point for financial planning during the upcoming holiday season.
- Open a separate savings account and make small automatic deposits to build your holiday savings.
- Use budgeting and coupon apps, credit cards and price trackers to find the lowest prices on gifts and travel.
1. Set Spending Limits
It’s very easy to overspend during the holiday season, especially if you’re celebrating with multiple friend groups, shopping for sale items on Black Friday or Cyber Monday or traveling to visit family. Consider setting spending limits before the holiday season arrives to avoid breaking your budget.
Set a general cap on your spending or category limits, whichever works best for you. Setting a general cap can be easier, as you can simply add up all your costs and keep that figure in mind as you spend on outings, gifts and travel.
But category limits can help you better understand and budget for holiday-related expenses. Consider limiting entertainment, decoration, travel and gift spending, then track your spending using a simple spreadsheet or an app to ensure you stay within budget. Remembering your spending limits can help you avoid impulse buys and accidental overspending.
2. Start Sooner than Later
The winter holidays may seem far away, but budgeting for a holiday and saving now can help ensure you’re financially prepared. Build a holiday budget using your set spending limits as a starting point. This budget can include general categories and how much you plan to spend in each, or you can get more detailed with it and include specific gift costs for family members and friends.
Once you’ve established a budget, consider setting up automatic deposits into a separate savings account to build a nest egg. Setting aside small amounts sooner than later can help you save money fast and reduce financial stress as the holiday season approaches. These top savings accounts with high APYs can help you maximize your holiday budget:
UFB Portfolio Savings
Vault Verified
Capital One 360 Performance Savings
Vault Verified
3. Maximize Holiday Shopping During the Offseason
Starting your holiday shopping early could also help you keep more money in your pocket. Certain popular gifts—we’re looking at you, new video game consoles—get infinitely harder to find and more expensive as the holidays draw closer. That’s because many people purchase these gifts early and resell them for higher prices.
One of our best holiday budgeting tips is to shop for popular holiday gifts earlier in the fall, as you’ll have many more options. More options means it’ll be easier to compare prices and find the best deal. Sometimes waiting until Black Friday or Cyber Monday to buy gifts doesn’t pay off, as many consumers will have the same strategy.
4. Track Sales and Discounts for Holiday Items
Certain money-saving apps will let you track prices on gift items or search for and automatically apply available coupon codes. Some options that could serve as your holiday budgeting assistant this season include:
- Capital One Shopping: This platform curates deals you can use to save money. You can browse by brand category, specific brand or product type. Besides that, there’s also a free browser extension that automatically applies available coupon codes to your online shopping carts.
- ShopSavvy: This app makes it easy to compare prices on popular gifts with thousands of retailers. You can also use it to track prices over time and set up alerts when an item you’re interested in is discounted.
- PayPal Honey: This platform also lets you apply coupon codes automatically when you add items to an online shopping cart. It has other features, such as a price drop feature that lets you track price decreases on items you’d like to gift and a feature that lets you easily compare prices from Amazon sellers in one place.
5. Limit Travel Costs As Much as Possible
Travel is a big expense for many during the holiday season. If you’ll be visiting family several states or countries away, these holiday budgeting tips can help you save on flights and other travel costs.
- Book early: Per Expedia’s 2024 Air Travel Report, travelers saved up to 24% on domestic flights by booking them at least a month before departure. People should book international flights six months in advance for the most availability and savings.
- Track flight prices: If you can’t book early, tracking prices using a tool like Google Flights may be your next best option. You can set up price alerts so you know when costs increase or decrease, and then book accordingly.
- Plan an unconventional holiday: There’s no rule that you need to celebrate on the actual holiday itself. If your family is traveling to celebrate together, consider booking your trips before or after the holiday season for optimal savings.
- Use credit cards strategically: Using credit card rewards can be a great way to offset your holiday travel costs. Consider applying for a travel card like the Chase Sapphire Preferred® Card, which offers a valuable welcome bonus. Earn 60,000 bonus points after $4,000 in purchases in your first three months from account opening (that’s worth $750 when redeemed through Chase Travel℠).
Try Our Holiday Budgeting Template
If you’re struggling with budgeting for a holiday, a template can be a useful tool. We’ve developed the following budgeting template as a starting point, and you can adapt it to better meet your needs. It outlines several spending categories, providing a planned spend vs. actual spend for each, and noting the difference between the two along with additional context.
| Category | Planned Budget | Actual Spent | Difference | Notes |
| Gifts | $ | $ | $ | |
| Decorations | $ | $ | $ | |
| Travel | $ | $ | $ | |
| Food & Drink | $ | $ | $ | |
| Entertainment & Activities | $ | $ | $ | |
| Charity Donations | $ | $ | $ | |
| Clothing | $ | $ | $ | |
| Miscellaneous | $ | $ | $ | |
| Total | $ | $ | $ |
Budget Early With Our Holiday Spending Tips
It might seem too early to start budgeting for the holiday season, but starting now can pay off. Consider creating a formal budget, setting spending limits, opening a special savings account and using financial tools strategically to keep costs manageable in the coming months. These holiday budgeting tips can help reduce your financial stress and keep more of your hard-earned money in your pocket.
Frequently Asked Questions
What Is the Most Expensive Holiday?
U.S. consumers spend the most during the winter holidays, including Christmas, Hanukkah and Kwanzaa, according to the National Retail Foundation (NRF). Average per-person spending was approximately $875 in 2023.
Back-to-college and back-to-school were the largest non-holiday spending events, with consumers spending an average of $1,365 and $875 respectively, in 2024.
What Is a Reasonable Christmas Budget?
It depends. A reasonable Christmas budget is one that aligns well with your household spending. If planned holiday spending will leave you struggling financially, cutting back on gift purchases is likely a good strategy.
How Can People Enjoy a Holiday on a Limited Budget?
It’s possible to enjoy a holiday on a limited budget. Consider these holiday budgeting tips:
- Set a dollar limit for gifts
- Pick names as a family and purchase a present for one person OR
- Focus solely on gifts for children in your family
- Shop for gently-used items at thrift stores and online marketplaces
- Opt for holiday dinner at home instead of going out
- Plan and book holiday travel early
- Think of creative and fun ways to connect as a family that don’t come with a high price tag.
What Is an Ideal Way of Spending a Holiday To Save Money?
It depends. For one person, an ideal way of spending a holiday to save money would be having a small gathering at home with immediate family. For another, it might be choosing one person to buy for or forgoing gifts entirely for a year.
What Is the Average Holiday Spending?
Per the NRF, the average per-consumer winter holiday spend was $875 in 2023, up from $833 in 2022.
Editorial Disclosure: We may receive a commission from affiliate partner links included on our site. However, this does not impact our staffs’ opinions or assessments.
