Don't adopt the "spend now, worry later" mindset this holiday season. Here's how to buy for everyone on your nice list and stay in your budget.


The holiday season creates good tidings and joy. But it also brings pressure to outdo the other people by buying the most thoughtful present ever. According to The National Retail Federation, the average American is estimated to spend a whopping $700 on gifts this year. Considering most families don’t have that much to spend on cousin, friend, and family members, it creates a financial burden and sometimes a pile of debt. That’s why it’s important to be strategic, mindful, and budget-conscious heading into the most wonderful time of the year. Here’s how to make sure the holidays don’t break the bank, including doing group gifts and making mental shifts.

woman window shopping
Credit: Betsie Van der Meer/Getty Images

1. Utilize Your Talents

Your friends didn’t choose to stick by your side through thick and thin because of your paycheck, and your family doesn’t love you because you buy them fancy items every holiday. What your closest companions adore the most is, well, you. And the talents that are uniquely yours. That’s why David Reiling, CEO of Sunrise Banks, recommends exploring gestures that could mean more than a store-bought good. These could be handmade gifts, like a scarf you crocheted or a framed photograph you took. Or you could offer services that would be appreciated, like babysitting for your pals who have a newborn, tending to your grandmother’s overgrown backyard, and so on. Not only does this cut back on cost; it also means more than a gift set of fragrant lotions ever could.

2. Make a Commitment to Create a Budget

For the gifts you need to buy, establish a budget and check it twice like Santa does. This seems like a no-brainer, but it’s often skipped, according to Heather Philp, senior vice president of credit card products at Wells Fargo. Whether you physically put pen to paper or you type on your phone, compile a list of people you intend to shop for and set an allocated budget for each of them. Then you’re finished, right? Not quite. Philp reminds shoppers that holiday budgets should take into account all the incidentals: purchasing a holiday tree, ornaments, food, wrapping paper, plane tickets, and so on. The goal is to have a complete budget you can track in an effort to hold yourself accountable for every swipe of the card.

3. Take Shipping Costs Into Account

Black Friday and Cyber Monday sales are tempting. The 50% off here and buy-one-get-two-free there can blind consumers frantic about deadlines. But one fine print that’s often missed in the scurry of checking out your shopping cart? Shipping, according to Sara Skirboll, shopping and trends expert for RetailMeNot. Depending on your ZIP code and the weight of your gift, this additional charge can add up fast. “Some online retailers may not offer free shipping or may have a high spending threshold to unlock free shipping, tempting you to spend more than you intended,” she explains.

One way to prevent this charge is to always hit the minimum for free shipping. Sometimes this may require a group chat. Skirboll suggests talking to friends and family about their holiday shopping plans. There might be an opportunity for you all to go in on one order. Plus, everyone gets their shopping done at once.

4. Do a Group Exchange

Having a group of close friends is a blessing: There is always someone on the other end of a phone when you need them. The same is true when you have so many cousins that you lose count. But they also mean holiday gifting can quickly become expensive. That’s why Carly Frieling, a financial advisor with Northwestern Mutual and Civic Financial, suggests setting up gift exchanges with a price cap. This limits your purchases to one gift per group—and one gift only—and saves time. (You see your treasured pals all at once and avoid one lunch or dinner after another.) “Typically the swap is done at someone’s house potluck style to avoid going overboard with catering or relying on one person to pay for all the food,” she continues. “It’s a fun way to celebrate the holidays without stressing about buying everyone a gift.”

5. Temporarily Cut Back on Certain Expenses

No, you don’t have to give up your beloved cup of espresso forever. And eating lunch out to get a break from the stale office air? Totally worth it. These small luxuries, while necessary for happiness, add up quickly. Simply cutting back on those charges during December can build up your holiday-spending pile, according to Northwestern Mutual financial advisor Ashley Russo. “Small changes can do big things for our budget and ability to save. It doesn’t have to be a sacrifice, simply a short-term adjustment so you can prioritize where your spending is going this holiday season,” she says.

6. Spend Cash

Though there are plenty of ways to be strategic with credit cards (more on that later), but if you can’t be trusted with plastic, Lauren Greutman, savings expert for digital coupon site Flipp, suggests sticking with cash. It can help you stay on budget because of the psychological effects spending cash has. "Studies show that a consumer will pay almost twice as much on an item when they use credit versus cash. When you use cash, you think a lot more about your purchases," she says. If you prefer to shop online, Greutman suggests using a prepaid debit card like the EchoPay Prepaid card. That way, when you run out of the money you’ve set aside, you stop shopping.

7. Assess Relationships

Not having to worry about meeting expectations or seeing people you don’t want to spend time with can be a cutthroat way to save, but an effective one. Tiara Zolnierz, co-founder of funding and business support company EnrichHER, says holiday gift-giving shouldn't be a tremendous source of stress or anxiety. Rather than spending a small fortune on fake friends, toxic family, or dead-end relationships, prioritize the positive relationships in your life.

8. Take Advantage of Credit Card Rewards

Not all credit cards are created equally or serve the same purpose. And though it’s never recommended to leave a balance on your plastic, Patrick Beckman, a financial expert for RaveReviews, says being strategic with what card you use to make purchases can put cash back into your pocket. He suggests looking at what might be your greatest holiday expenses—food, gifts, travel, etc.—and identifying which bank offers the most rewards for that category. Some offer double points for airline tickets, others give trips for in-store or online department store purchases, not to mention other perks. “You can earn a generous bonus on a new credit card and get some bonus cash back, making everything effectively 10 to 20% cheaper during the holidays,” he explains.

9. Gift Experiences

Think back to a special memory you have with a friend or family member. Chances are high that this special moment had little to do with a gift and was about the quality time. Business mentor Merel Kriegsman says it may take a conversation or two to convince everyone to skip the multi-gift tradition, there’s not a price tag you can put on experiences. Consider creating a voucher for an experience for your children, such as painting your kiddo’s bedroom their favorite color, taking a trip to the indoor swimming pool, and so on. For friends or a partner, brainstorm something you would both enjoy in the year to come: a concert, a weekend getaway you’ve been meaning to take, or other bookable events.


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