A 6-Step Plan for a Holiday You Can Afford

Each year, millions of holiday shoppers set a budget for how much they plan to buy during this most festive time of year. But how much do they really spend?

According to the National Retail Federation’s 2016 forecast, Americans are expected to spend $655.8 billion — 3.6 percent more than last year — during November and December. That is a lot of spare change.

If you struggle to keep your spending under control, check out this six-step guide on avoiding the temptation to go overboard this holiday season.

Step 1: Create a budget

Stanislav Vinogradov / Shutterstock.com
Stanislav Vinogradov / Shutterstock.com

Many shoppers skip a written budget, opting instead for a hazy idea of what they can afford.

Let’s be clear: A hazy idea is not a budget.

Within the next week, sit down — with your significant other if you share the bills — and write down your holiday budget. To do this, you need to:

  • Brainstorm every gift you need to buy. A common mistake is leaving out all of the little gifts that can add up. They include the “white elephant” gift for the family party, gifts your bosses, colleagues, customers and clients, the “Secret Santa” exchange at the office party, and all those tips for service workers.
  • Write down all holiday food expenses. Your normal grocery budget isn’t likely to include things like the fixings for a family feast or ingredients for dozens of cookies.
  • Assign a dollar amount to every line item. Every person and event needs a specific budgeted amount.

Once you add it all up, decide if you can afford it. If not, pare down or eliminate some spending.

Step 2: Get creative

SAQUIZETA / Shutterstock.com
SAQUIZETA / Shutterstock.com

If you don’t want to eliminate people from your gift list, it’s time to get creative. Consider giving gifts that may cost you more in time than money.

Crafty folks have all sorts of options, from knitting scarves to creating photo scrapbooks. Go online and find instructions for inexpensive handmade gifts such as:

  • Baking mixes
  • Bath salts
  • Decorated bookmarks
  • Painted picture frames
  • Rice bag warmers
  • Coasters

Don’t overlook other types of gifts. Your great-uncle may not need another knickknack, but he might need someone to rake the lawn. Your grandma might appreciate the simple gift of your company for an afternoon.

For gifts of time or service, create a decorative homemade gift certificate or coupon to place in a card.

Step 3: Inventory what you have

Uber Images / Shutterstock.com
Uber Images / Shutterstock.com

Some people are appalled at the idea of regifting, but there’s no good reason to keep things you don’t use or like.

Step 3 is about more than regifting, though. It’s about looking through the house for anything that could be used to reduce your holiday budget.

Maybe you went a little wild during the last Yankee Candle sale and have a stockpile of scented wax in the closet. Perhaps you can redeem credit card rewards points for gift cards or merchandise.

Depending on your family dynamics or the age of the recipient, you may even be able to gift gently used items. In fact, that may be the preferred way to find an item for white elephant exchanges and the like.

Step 4: Start now

Maksim Shmeljov / Shutterstock.com
Maksim Shmeljov / Shutterstock.com

Waiting until the last minute is a surefire way to blow your budget. Shopping on Dec. 23 can make you desperate to buy the first thing you see.

By starting before Black Friday, you’ll have plenty of time to watch for sales and coupons for the gifts you need. Plus, the crowds will be more manageable.

Starting early also gives you time to make some homemade gifts.

Step 5: Track your money as you spend it

kikovic / Shutterstock.com
kikovic / Shutterstock.com

Holiday spending can add up quickly, so you need to track the money you spend from the moment it leaves your wallet.

A smartphone app may be the best way to ensure you’ll always have your budget with you. Goodbudget lets you set up 20 envelopes. For the holidays, you could use one envelope per person if your list is that small.

Holiday-specific spending apps also include:

If you prefer, an old-fashioned pen-and-paper tracking system also works.

Step 6: Stop shopping

AlexMaster / Shutterstock.com
AlexMaster / Shutterstock.com

This final step may be the most difficult for some.

Once you have found the right gift, purchased it and crossed the person off your list, stop shopping for him or her. Stop looking at ads and stop browsing displays with that person in mind. When your entire list is complete, stop shopping altogether.

Unless you went under budget on your previous purchases, any more buying is liable to break your piggy bank.

If you do see something you absolutely must buy for someone already crossed off your list, return the item you previously bought instead of spending more money on that one person.

How do you do each holiday season? Do you stay on target, or always find yourself spending more than expected? Share your experience with us on Facebook.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
9 Indestructible Products That Are Worth the Price
9 Indestructible Products That Are Worth the Price

If you’re willing to pay a little more for these products, you may never have to shop for another again.

Avoiding These 5 Foods Could Save Your Vision as You Age
Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

7 Small Appliances You Don’t Need — and What to Use Instead
7 Small Appliances You Don’t Need — and What to Use Instead

Here’s how to get the job done without blowing money — or losing counter space.

5 Ways to Save up $500,000 in 15 Years
5 Ways to Save up $500,000 in 15 Years

Even if you’re behind in preparing for retirement, there’s still a way to pull together a solid nest egg if you focus.

7 Free Tools for Saving More Money at Amazon
7 Free Tools for Saving More Money at Amazon

Use these websites and other tools to save money — or earn extra cash — when shopping at Amazon.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

These 10 Postal Price Hikes Start Next Week
These 10 Postal Price Hikes Start Next Week

Starting on Jan. 24, the price of various mail and shipping services will rise.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

10 Cars You Are Most Likely to Keep for 15 Years
10 Cars You Are Most Likely to Keep for 15 Years

The cars that owners hold onto the longest have one thing in common, a new study shows.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year and 2 Raising Them
5 States Lowering Taxes This Year and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

The 10 Golden Rules of Becoming a Millionaire
The 10 Golden Rules of Becoming a Millionaire

I’m a millionaire several times over. I got here the same way you can — by following these simple steps.

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.