Lower Your Holiday Spending, Stay on Budget, And Prevent Debt

If you’re anything like me, then you probably LOVE the holidays. I enjoy the decorations, the food, the people, and everything that goes along with it. However, I know not to get ahead of myself even though I love the winter holidays an incredible amount. Holiday spending can quickly get out of hand and it’s…

Michelle Schroeder-Gardner

Last Updated: May 27, 2023

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Find out how to not go into debt on the holidays. This is a great list!If you’re anything like me, then you probably LOVE the holidays. I enjoy the decorations, the food, the people, and everything that goes along with it.

However, I know not to get ahead of myself even though I love the winter holidays an incredible amount. Holiday spending can quickly get out of hand and it’s quite easy to destroy a holiday budget.

According to the National Retail Federation, the average family in the U.S. spent $730 on the winter holidays in 2013 (it hovers around this amount most years).

Holiday spending can quickly add up when you are paying for food, gifts, decorations, and more. Plus, if you plan on traveling then your holiday spending may be much higher than this $730 amount.

This high price tag sometimes causes families to put their holiday spending on a credit card.

This is a big problem because that debt will eventually need to be paid off. Plus, interest and other finance charges may be added to this amount, which may cause the small amount you may have put on your credit card to inflate into a much bigger number. This can then impact your credit score, your credit history, your debt to income ratio, and more.

These are all things that no one wants to experience, especially since the holidays are not about the money you spend – they are about spending time with your loved ones.

While sticking to your holiday budget at times may seem impossible, I want you to know that you can enjoy the holidays and not go into holiday debt.

Continue reading below to read more about the several ways to lower your holiday spending and stick to your holiday budget.


Create and stick to a holiday budget.

Before you start your holiday spending, you should create a holiday budget. Creating a holiday budget will help you analyze your spending so that you can spend less money and not go into any holiday debt.

You should look at how much money you have set aside for the holidays, how much you estimate you will spend, and possibly even add a little buffer just in case you go over your holiday budget.

Some of the things you may need to budget for include:

  • Decorations
  • Food (such as if you are hosting or attending a holiday party)
  • Gifts and cards
  • Travel and transportation

Related: How To Live On One Income


Plan a group gift exchange.

Instead of swapping gifts with numerous people, you may want to do a gift exchange where everyone draws names and each person only has to get one person a gift. This can save a person a lot of money, plus more thought and time can go into each gift.

This is something that we do with my husband’s family. All the younger children still get gifts from everyone, but all of the adults just do an exchange. It makes it much easier and more enjoyable!


Earn extra money for your holiday spending.

You may want to look into ways to earn extra money for your holiday budget if you want to spend more money than you have saved.

There are many things you can do in order to earn extra money for your holiday spending. You could sell items from around your home, work additional hours at your job, find a part-time position (tons of places hire during the holidays!), freelance, and more.

Below are several posts that may help you find ways to make extra money for your holiday budget:


Shop early.

I know this might be a little difficult since it’s already November, but starting now is better than waiting until the last day.

I know some who start shopping almost a full year before the holiday they are celebrating. You may call them crazy, but I’m sure it saves them a lot of stress and money later.

The earlier you start shopping, the more money you are likely to save. This is because you won’t be in a rush to find what you need and you will be able to shop the sales as they come. When someone is low on time, they are more likely to buy items they may not need at a price that is higher than usual.


Find the best deals.

Prices can vary from store to store. Before you start any of your holiday spending, you may want to shop around and see what stores have the lowest pricing.

You can find the best deals by:

  • Shopping online. I like to shop online first. This way I don’t have to waste any gas driving around and I can save time by shopping at home as well. Amazon is definitely my favorite place to shop online.
  • Using a cash back website. I highly recommend using a cash back website (such as Ebates – signing up under my link will give you a free $10 gift card to a store of your choosing as well, such as Target), so that you can receive free cash back for the money you are already spending.
  • Finding coupon codes for the products you are buying. Before you buy something, type the store’s name plus coupon code into a search engine to see if any coupon codes will pop in. An example would be “Airbnb coupon codes.”
  • Buying discounted gift cards. There are many gift card companies online that sell “used” gift cards you can get for cheap. You could gift one of these or just do your shopping with them so that you are shopping on a discount.

Do you tend to stick to your holiday budget? How do you feel about holiday spending?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. I was about to say “no way!” to the $700+ figure but then I remembered I live hundreds of miles away from family now so Christmas at least is going to call for some travel and it won’t be cheap.

    We’re going to do our best to trim down our cost of travel but some family absolutely refuse to give us their Christmas lists early enough to do anything about them before December so that’s something we’ve got to work on. Thank goodness we’ve gone to picking just one person to buy for, like your husbandry family, or we’d really be up a creek!

    1. Yes, having just one person to buy for makes it much easier!

  2. Dee @ Color Me Frugal

    I love the gift exchange idea, that sounds like a great way to save money. We stopped giving gifts to most of our siblings a few years ago, and now we just do gifts for our parents and the kids (only two). I think the most important part of avoiding holiday debt is having a plan or list when you shop, especially since around the holidays and especially on Black Friday there is so much temptation to impulse buy!

  3. Awesome tips!! I totally agree that one great way to “save more” is to make more! I am all about picking up extra side hustles this time of year so I don’t have to worry too much about my holiday spending.

  4. Great tips Michelle! I am usually fairly good about sticking to my holiday budget and have never gone into debt over the holidays, but I can see how easily that really can happen. Especially when you have kids and don’t want them to be disappointed on Christmas morning. I’ve already purchased all our gifts for our daughter and am extra excited to give them to her on Christmas, knowing that we won’t have to be paying off credit cards or otherwise for them.

  5. I don’t view the holidays in the same light as I used to. I do love the holidays, but not for the same reasons most do. My husband and I don’t sit around for months wondering what to get each other, because if it came down to it, we would prefer to keep our money in the bank.

    That’s sort of like an unspoken communication; however, we do usually end up buying something small. For me, it’s the excitement on my kids faces during the holidays (not just on Christmas day).

    We go view the Holiday lights, have school holiday parties, and bake cookies with each other. These small things are what make our holidays fun, not the excessive commercialization that comes with it. Luckily, I am officially finished buying Christmas gifts for our kids and I can guarantee that I didn’t spend over $150 for both of them.

    I like the idea of doing a holiday gift exchange and I think I may give my daughter the opportunity to participate in one to give her a needed lesson on giving during the holidays!

    1. Yes, I agree! I love everything else about Christmas – I don’t care about receiving gifts.

  6. We shop with a list, gift ideas and spending limit. This helps prevent overspending and impulse buys. Having a plan will help you stay within budget.

  7. I don’t mind holiday spending that much. I plan for it all year long and execute during November and December. I bought some stuff for the kids on clearance earlier this year so I’m already ahead of the game! And I learned that all of my nieces and nephews are getting iPods from their parents – so that means I can get them all a iTunes gift card for Christmas. That’s easy.

  8. Melane @ Good Job Mom

    Great post! Since we just moved into a one bedroom apartment, my attitude toward buying stuff has drastically changed! Our family is older, and we are choosing to focus on experiences, not products. As empty nesters, we are planning on consumable gifts ( food) or events ( buying tickets for the family). I personally love the holidays, and am embracing the challenge of changing our gift buying habits!

  9. V

    We might get up to $730 with travel this year. I hadn’t added it all up, but now that I see it that way…yipes! We reign it in with gifts, though.

    1. Travel can be so expensive :/ But, it’s always great seeing those that you care about.

  10. Reelika @Financially Wise On Heels

    I love holidays and I also love to shop. The best way I can always stick to my budget is to plan ahead and side hustle months before. I always use this extra earned money for decorations, gifts and other items. I definitely don’t want to stress during the holidays 🙂

  11. Good tips! We are trying to keep our holiday spending to a minimum so we can keep paying off our debt. One way that we’re going to do this is by making the majority of our gifts. I’ve already started making presents (see the linked recent post for some inspiration).

    1. DIY Christmas gifts are the best!

  12. Amy @ DebtGal

    I really like the idea of gift swaps or drawing names. We no longer exchange presents with most other adult family members, which is very help to my wallet, and decreases my holiday stress. There’s nothing that kills the holiday spirit more than struggling to find a gift for an extended family member you don’t know well, and feel a little bitter about having to spend money on. Limiting gift giving to kids really eliminates this for our family.

    Last year, my husband and I saved up a bunch of Amazon gift cards we received for taking surveys, and were able to buy most presents with them.

  13. We have 5 kids and try to stick to the 4 gift rule.

    1. Something they want.
    2. Something they need.
    3. Something to wear.
    4. Something to read.

    It helps us stay within our budget.

  14. Great article! I love the part about finding the best deals and hope that you will try Yazing.com, Yazing is a new site offering full cash back on your purchases (more than eBates) as well as the ability to share coupons and deal pages with others and earn cash rewards when they make purchases!

      1. Thank you! You are providing great information to your readers! Let me know your thoughts on Yazing. We are just getting started!

  15. I love gift exchanges! Not only do they help save money, but they also help you to appreciate the present. When you’re not getting boatload of different gifts, you have time to appreciate the details. I actually LOVE getting and receiving presents, haha. It’s one of my strongest Love Languages! Thanks for the great article 🙂

  16. Melissa

    I am totally guilty of the excited holiday overspending! I also love the holidays and shopping, so it makes for a perfect storm. I’ve had to overhaul my gift giving over the year and focus on the quality time aspect – it has helped a lot!

  17. Wendy@BlushandBarbells

    I’m not going to lie – I don’t bother with gifts for anyone anymore. No one I know needs anything, and whatever gift I give will probably just end up in the back of a closet somewhere…so I just bake. Everyone loves fresh cookies and breads!

    1. Yes, I love baked goods more than anything!

  18. Natasha

    Great tips! I don’t spend much money for the holidays at all. Being a single mom taught me long ago that that just wasn’t smart to do. Everyone will just have to accept my love as a gift!

  19. What I always do during holidays is I always stick to my budget no matter what, which I prepare beforehand. It started just like a plan but now it’s become a practice every year. And, I like the results because there are less unplanned expenses and I do not overspend during holidays.

  20. I don’t have winter holidays but I am planning a weekend with friends that will must to be absolutely low cost, plus I tend to plan a weekly budget to have my finances under control:P

  21. Knowing your budget and sticking to it is most important during the Holidays. There are way too many things to buy that can quickly add up. You should try and save throughout the year so you don’t end up in debt by buying gifts.

  22. Never heard of that site. Sounds awesome!

  23. Just paid off my credit card with rewards points and charged another $100.69 for my last round of fragrances I saw on sale. Then I have another debt I’m about to pay off for almost $2,800. After I pay off these bills, I think I’m going to do a “Chuck Chillout,” and cease on impulse spending. And start writing more reviews so i can make my money back from everything I purchased on credit. 🙂