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How to Save Money during the Holidays

How to Save Money during the Holidays

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• Updated: July 13, 2018



The holidays can drain your bank account very quickly if you're not careful. Follow these steps below to make sure your holiday is joyful and not stressful.

1. Begin with a budget

 Instead of making a list of people for whom you plan to buy gifts first, decide just how much you can afford to spend. Include often overlooked miscellaneous items such as home decorations, party favors, and postage for Christmas cards.

2. Budget time as well as money

Shopping at the last minute often means paying more for a gift that was purchased on a planned shopping trip with a set amount of money to spend. Budget time for other holiday preparations such as baking, gift wrapping, and decorating. Better decisions are made when projects are completed under less stress than rushing to get them finished.

3. Cut back on extras that impact the bottom line

Professional photos are a large expense many people take part in during the holidays, but with better cameras and great photo editing apps, anyone can be a professional. We're not telling you to sacrifice your time-honored tradition of everyone wearing denim, but maybe you can nix the pricey photog. Along the same lines of taking pictures, is sending out cards. In the digital world, we live in, e-cards are available at little or no cost. Using them is a fun way to catch up with family and friends. E-cards are much cheaper than traditional paper cards.

4. After a budget is set, make a list of people and the gifts you want to buy for them

If the total is more than you have budgeted, cut the amount or eliminate some people from the list. Discuss gift- giving with family members and relatives. It is entirely possible some of them would also like to reduce the amount they spend on Christmas. Drawing names is a great way to share the gift giving tradition without buying for everyone in your family.

5. A cash-only Christmas

Using strictly is recommended for those who found themselves paying for Christmas months after the holiday is over. Withdraw the money you plan to spend. When the money is depleted, the shopping ends. Keep track of the money budgeted. It is best to do this in real time. Letting receipts lying around, without deducting them from available money, is not always a practical approach.

6. On the other hand, don't rule credit cards out altogether

Think of credit card purchases as short-term loans. Paying off balances, immediately, is ideal. If that is not possible, and you have a choice of cards, choose the one with the best interest rate. Credit card companies often offer zero percent APR for a specified period. If you can pay off purchases within the time frame, you are paying the same amount as cash. Some cards have cash back offers which is another way of saving money.

7. Opt to make gifts over buying prepackaged goods

The practice of gift giving has been over commercialized for years, and giving meaningful gifts is much better than the newest gadget. Think about DIY gifts, or better yet offering your services to family members in need, like cleaning out your grandparent's gutters. 

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