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Keeping holiday spending in check

How to Plan for Holiday Spending Early

piggy bank with a Santa hat
Plan your spending!

Financial planners say holiday spending should be no more than 1.5% of your annual income.  That’s around $750 for a $50,000 earner, and it should include everything from gifts to travel to food.  What percentage of your income is spent on the holidays?  Figure it out – you might be surprised! It's never too early to start planning for Christmas - you'll be seeing the holiday decorations out before you know it.  And when you start seeing decorations, you might be tempted to make some impulse buys.  So go ahead and start planning now.

Even during a pandemic, you want to celebrate the holidays.  But that may look a little different this year.  You may be worried about too much spending, or exposure to other people.  You may need to ship more gifts this year, so don't forget the cost of shipping.  But you may not attend as many parties, so you might save some money there! If you will be traveling, keep an eye on hot spots.  For the latest #COVID19 information, check out website.

  • Know your limits. How much can you really afford? 2% of your income may be too much.  Only you know your limits.  Set limits before shopping.  If you don’t know how much you spent last year, keep track this year of gifts, extra food, gas, hotel room, etc.  Keep your receipts in case you need to return an item. 
  • Set a budget. Make a list – write down all the expenses you will have – parties (food and gifts), food (turkey, roast beef, more butter, etc.) and travel (gas, convenience store purchases, hotel rooms, eating out, boarding a pet, etc.). Be specific.  List who you are buying for and estimate how much you plan to spend on each on them.  Some people set an amount, say $25 per kid/no gifts for adults OR $20 per person, etc. 
  • Don’t be Scrooge. Even if you’re budget-conscious, you can still have fun! Look for ways to cut expenses. Shop around – shop sales, online, etc.  Make gifts.  Plan travel (and pack some food).  Remember your reason for the season.  You don’t have to outdo or overdo anyone.  It’s a gift, not a competition. 
  • Plan ahead. One reason we sometimes overspend…..we didn’t plan ahead!  So think through your list – can you get a great deal on Black Friday or Cyber Monday?  Plan for it!  Do you want to make homemade cookies as a gift? Plan it – buy the ingredients, mark it on your calendar, and have fun!  Plan your travel – make reservations ahead if needed, plan a fun food pack, stop and walk instead of stop and eat more.
  • Plan ahead for next year. Pick up supplies for half-price after Christmas (just the things you know you’ll use next year!). Start a savings account and put money in it all year.  That way, you can pay cash next year. Or you can purchase gifts throughout the year (just keep a list somewhere safe so you’ll know what you already have). 

You don’t have to focus on just gifts that you buy.  Think outside the gift box.  Could you trim your gift list?  Our family mostly buys gifts for the kids.  The kids give out gifts to everyone – each kid picks out gifts at a dollar store.   Maybe you buy for the kids and your parents but the siblings don’t exchange gifts.  Some families draw names and set a dollar limit.  You can decide as a family.  But chances are, everyone will eventually be okay with not getting another tie or a box of candy.  Small steps!

You can also share your time and talents – give meaningful, unique gifts.  Knit a pair of mittens or a hat.  Bake cookies. Give coupons for babysitting or computer work.  Throw a slumber party for the niece.  Take your best friend camping.  Make a calendar with pictures of all the kids for the grandparents.  Clean the car for an older person.  Make single-portion freezer meals for someone who lives alone.

While you’re planning and prioritizing, plan time to build traditions.  Traditions can create cherished memories.  I loved making cookies and candy for neighbors and people in nursing homes.  Listen to your favorite holiday music while decorating the tree together.  Watch your favorite movie and pop your own popcorn.  Bake and decorate holiday sugar cookies (the more flour on your clothes, the better!).  But make the time – don’t just think it will happen.  Other things will crowd in if you let them.  Plan family nights and mark it on your calendar.  If anyone asks if you’re busy, just say, “I already have a commitment that night.”  That’s all you have to say.  Plan to Skype, Zoom, Google Meet, Facetime, etc. with those that are far away.  

Be sure to get the most from your holiday spending by using smart shopping strategies.  These strategies help with shopping for food, gifts, or decorations!

figure with Santa hat holding a calculator
Make your list and check it twice!


  1. Plan ahead – we’ve already talked about planning ahead. Think now about what your holiday to look like.  If you need a holiday spending budget, try the one here
  2. Make a list – List everyone that receives a gift from you.
  3. Comparison shop - Pre-shop and comparison shop. You won’t know if it’s a good deal unless you know the regular full retail price. You can pre-shop before the sale starts to know what items might interest you and which retailers provide the items you want. It’s easy to comparison shop online to make sure you are getting the best price. Sale ads and even sales often begin before Black Friday. You can start browsing early in the week.
  4. Avoid impulse buys – Remember that the stores arrange things to tempt you! Take your list and don’t buy things you see that aren’t on it!  On occasion, you may find a good deal on something else you need.  Just ask yourself, “is this a need or a want?” (that usually works for me!)
  5. Have a payment plan – if you don’t have a Christmas account, start one this year. Don’t just think “I’ll pay off the credit card later!”  Set a budget and stick to it.  Small steps this year can have a big impact next year.
  6. Enjoy! Don’t get so wrapped up in the details that you miss the joy of the season.  Plan time to unwind and relax.  Plan family activities to build traditions. 

Remember that small steps now can make big impacts later on. Use the Holiday Spending Planner to keep track of expenses during the holidays.