5 Tips to Shop Christmas on a Budget

‘Tis the season of giving! No matter what you celebrate, the holiday season is a time for many to enjoy being around family and friends—and indulge in some holiday shopping sprees.

And while we all like to buy presents for our loved ones, many of us also have to be mindful of our holiday spending—to make sure we don’t go over our spending limits. Thankfully, holiday spending is just like any other expense—and with good planning and research you should be able to properly manage Christmas on a budget, without sacrificing gifts.

To get you started, we put together our five best holiday budget tips to keep in mind this season. Follow these, and you should be able to balance the spirit of giving with being financially smart.


1. Make a Christmas budget

The first and most important step: make a budget.

Arguably the cornerstone of all personal finance, making a budget is the only way to properly save. And while 74% of Americans have a budget, many forgo this important financial exercise during the holidays—spending much more than their bank accounts would comfortably allow for.

To get started, we suggest picking one of the many budget templates available online. For a simple and free way to get started, we recommend 20somethingfinance.com’s budget planner which takes your monthly income and breaks down expenses like auto and health insurance, so you can easily know how much you have left to spend for nonessentials.


2. Determine your spending limit

Once you’ve evaluated your personal monthly cash flow, the next step is to determine your Christmas budget. The reason to treat this differently is because unlike consistent monthly expenses, Christmas spending is a high, once-a-year event that many people dip into their savings to fund. In other words, December spending shouldn’t look like other months.

The average Christmas budget for Americans last year ranged from $800 to $920, so if you target somewhere in that range you’re probably on a safe track. However, when budgeting for gifts it’s always important to consider your personal situation. The median income for American households was roughly $62,000 last year, so if you are above or below this figure you can appropriately adjust your spending in either direction.

The important thing to keep in mind with spending limits is to always stay clear of your emergency fund. This amount will differ based on monthly expenses, but it’s recommended that everyone should at minimum have $500 in savings for emergencies. Dipping into this threshold can put you at risk should any unforeseen circumstances pop up.


3. Know how to holiday shop cheaply

People often ask the question, “What are cheap Christmas gifts?” However, we think the question should instead be, “How can I buy the gifts I want, as cheaply as possible?”

The answer, in a nutshell, is online shopping hacks. Here are just a few:

  • Leave items in your shopping cart. Be sure to sign up for an account with your email before loading up your cart and abandoning it. Retailers will often send coupon codes to customers who’ve started but not yet finished a transaction, incentivizing them to get across the finish line.
  • Search for coupon codes. In addition to signing up for company emails, sites like Honey automatically search and add discount codes to your cart when shopping online.
  • Price match. Many companies now offer price matching to any competitors. If you have an in-person store that’s more local and convenient, use price matching where it’s available to get the best price possible.


4.  Track your spending

AKA stick to the plan. Creating a budget means nothing if you don’t follow it. This means tracking all purchases and keeping a constant eye on your spending to ensure it’s aligned with your budget.

There are a couple ways to help automate this. First, almost every credit card company offers the ability to set text message alerts for certain balance thresholds. Do all your shopping with one card and set alerts for spending thresholds so you know when you’re approaching your limit—and when you absolutely cannot go any further.

Second, personal budgeting software like Mint allow you to automatically import your credit card data and look at it by category, so you can visualize your spending in real time. This way you should easily be able to track how much you spent and where.


5. Remember what the holidays are about

While this list is about the ways in which to maximize your holiday spending and budgeting, we also want to emphasize the most important rule: the holidays aren’t about what you buy.

It’s easy to get swept up in the rush of gift-giving, but if spending no money is what’s needed for your budget right now, then that’s what you should do. A heartfelt card, photo collage, and phone call will always matter to those close to you, and no situation should make you feel pressured to spend money if it creates an overwhelming financial burden. The holidays are about giving—and that means much more than just money.

With that in mind, we hope you enjoy your holidays! And if you decide to go shopping, do so with our smart holiday shopping tips to help manage your spending.


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If you know exactly what you want to spend for the holidays you are in better shape than those who have a rough idea of what they want to spend and those who just plan on being careful.