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6 Tips for a Budget-Friendly Holiday Season

You don't have to be a Scrooge to stay within your budget

Older person tearing a receipt off a calculator to set their holiday budget and calculate the cost of their wrapped gifts
Alena Ivochkina/Getty Images

Holiday shopping — and snagging the lowest price — can overtake some people’s better instincts. Think of Black Friday, which, ironically, occurs the day after Thanksgiving, when we give thanks for what we have. Who hasn’t heard of folks lining up in the wee hours, long before a store opens? Or pushing others out of their way to grab a deal?

When held in check, spending can be delightful, harmless fun, especially when you find the right gift for someone special. Holiday fever is already spreading. How do you keep your head and avoid blowing your budget, as inflation continues to take its toll?

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Holiday budgeting helps control your debt load

With interest rates on the rise, this would be a terrible time to run up your credit card balances, says Larry Hendrickson, founder and managing partner at G&H Financial in North Canton, Ohio. “The holidays can be a very expensive hole to dig yourself out of, if poor decisions are made.”

Millions of consumers are doing just that. According to WalletHub’s latest “Credit Card Debt Study,” Americans racked up $67.1 billion in credit card debt during the second quarter of 2022 — a record for the second quarter of any year. WalletHub projects that consumers will add a total of $110 billion in debt this year.

Still, you don’t want to feel like Scrooge and disappoint the special people in your life. Fortunately, with careful thought, you can celebrate and be generous — without regret. Here are solutions to some common holiday budget challenges.

1. Make a list — and check it twice

Challenge: Right now, planning for the holidays seems overwhelming, and you’re concerned about the cost.

Solution: Create a complete holiday list before the big push starts.

Include all major items — gifts, food and decorations for holiday parties, and festive clothing, says Julie Ramhold, a consumer analyst with DealNews.com. “By figuring this out now, you'll be able to set a holiday budget far ahead of time, which will make it easier to stick to,” she adds. You’ll also avoid paying more if you must buy something at the last minute.

As you create this list, decide on the amount you can afford to spend on family members and friends, and stick to it, says Hendrickson. “It’s hard to resist the urge to buy something for everyone you know.”

2. Pass on Black Friday and Cyber Monday

Challenge: There’s tremendous pressure to buy on Black Friday and Cyber Monday, and it’s hard to resist.

Solution: Let those days go by.

Think back to the last Black Friday or Cyber Monday. Did you forget you were buying gifts and wind up with a pile of stuff for yourself that you couldn’t resist? Stick with your gift list or stay home and read a book.

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True, with careful shopping you can get good deals on Black Friday and Cyber Monday, which will fall on Nov. 25 and Nov. 28, respectively. And other stores are likely to run related deals weeks beforehand. “There's a good chance we'll see retailers like Target offer competing discounts during the same time frame,” says Ramhold. “These events could serve as an unofficial start to the Black Friday season.”

But if your impulse shopping tends to get out of hand, remind yourself that great deals can be had all year round. Think Presidents Day, Mother’s Day, Father’s Day, Memorial Day, the Fourth of July and, of course, Labor Day. Another example is Super Bowl Sunday. Rather than buying a TV on Cyber Monday, you could wait until late January. TV prices tend to drop just before the big game.

3. Head to discounters for decorations and small gifts

Challenge: You enjoy decorating, donating to schools and toy drives, and giving small thank-you gifts to service providers.

Solution: Look to off-price retailers for these items; you don’t need brand names.

Holiday tchotchkes, gift wrap, cards, decorations, and party supplies of all kinds will be cheap at Dollar Tree, Dollar Store or Dollar General. Items from PaperSource or Hallmark will cost more. For small tokens for your hair stylist, building superintendent or letter carrier, look to the Christmas Tree Shops, HomeGoods or a similar discounter in your area.

4. Give gifts you make yourself

Challenge: Gift shopping — especially for friends and relatives you don’t see often — can be expensive and stressful. Yet giving gift cards seems impersonal.

Solution: Bake cookies or make jams, ornaments or other craft items to give as presents. People will appreciate the personal touch. If you have grandkids, involve them in the fun — you’ll set a good example while creating a precious memory.

You can also find items like jam jars, decorative bags, craft materials and other items at discounters like Dollar Tree. If you’re organized, you can make your gifts over one weekend and send them off the next.

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5. Buy in bulk when possible

Challenge: You’re hosting several parties at your home, and plan to attend more given by others.

Solution: To please your guests and bring goodies to other hosts, look for opportunities to buy in bulk. For example, one case of your favorite moderately priced wine might cover multiple events. You’ll also find a wide assortment of festive foods at Costco or Sam’s Club. Just be sure not to overbuy.

6. Just say no to some requests

Challenge: There are too many celebrations to attend, and too many pleas for donations.

Solution: Feel free to decline the invitations to some parties, and resist the temptation to buy a new outfit for the ones you accept.

Also, give yourself permission to scrutinize the charitable donations you’re asked to make at work, or in store checkout lines. Give if you like, but rather than contributing cash at the office or at the store, donate by check or online instead. “That way you'll be able to donate as much as you're comfortable with without feeling pressure from others,” Ramhold says.