The holiday season is upon us, and so is the annual surge in holiday shopping.
On average, people spend roughly $900 on gifts each holiday season. That figure doesn’t include other common holiday expenses like travel, food for gatherings, decorations, or party supplies.
Many shoppers resort to credit cards to cover holiday costs, but carrying holiday purchases as credit card debt rarely makes sense.
Putting holiday spending on a credit card creates a debt you’ll eventually have to pay off. Interest and finance charges can quickly turn a modest purchase into a much larger balance. That can negatively affect your credit score, your debt-to-income ratio, and your overall financial health.
Going into debt for gifts and events adds stress and distracts from what the season is really about.
Holidays can be expensive, but with planning and discipline you can avoid overspending and still enjoy the season.
Tips for saving money on holiday shopping
Set a realistic holiday budget
Before you create a shopping list, decide on a realistic holiday budget. Knowing how much you can afford prevents impulse spending and helps you avoid debt.
Review any money you already have set aside, estimate what you expect to spend, and plan how to stay within that limit.
Consider including these items in your holiday budget:
- Gifts
- Transportation costs
- Food for parties and gatherings
- Postage and shipping
- Holiday cards
- Wrapping supplies
- Decorations
Think back to previous years to identify recurring expenses—this often reveals surprising costs and helps you plan better.
Use cash to curb overspending
Shopping with cash can significantly reduce impulse purchases. When you use cash, you see exactly how much you have left and are forced to prioritize purchases.
A cash-only approach helps separate wants from needs and requires you to plan each purchase carefully.
Give just one meaningful gift
If time or money is tight, consider giving just one thoughtful gift per person. Many families give multiple presents, but you can simplify and cut costs by focusing on one well-chosen gift. It’s the thought that counts, not the quantity.
Earn cash back on online purchases
Sign up for cash-back services to get money back on purchases you would make anyway. These services are free and can help you save on online shopping.
Using cash-back websites or apps for routine purchases adds up over the season and reduces your net spending.
Cut expenses now to free up holiday cash
Finding small ways to save throughout the year can free up extra money for the holidays. Even modest monthly savings add up quickly.
Ideas to cut costs:
- Cancel cable or switch to a cheaper streaming option.
- Look for a more affordable cell phone plan.
- Eat out less—reducing dining out by a couple of meals a week frees up cash.
- Negotiate lower rates for car and home insurance.
- Pause or cancel gym memberships you rarely use.
Make extra money for holiday spending
If cutting costs isn’t enough, consider ways to earn additional income. Seasonal part-time jobs—retail, delivery, tree lots, and restaurants—are widely available during the holidays.
Other options to earn extra income include renting out spare space, doing short-term gigs, participating in paid surveys, or using reward sites that pay in gift cards or cash. There are many flexible ways to boost your holiday budget without long-term commitments.
Organize a Secret Santa or gift exchange
Plan a gift exchange among family or friends so each person buys only one present. This approach saves money, reduces stress, and allows everyone to put more thought into a single, meaningful gift.
Start shopping early
Begin holiday shopping as early as possible. Some shoppers plan and buy months in advance, which reduces stress and provides more opportunities to catch sales. Rushed shopping often leads to paying higher prices or making purchases you later regret.
Signing up for free trials or membership shipping services can also save on shipping costs and help you take advantage of early deals.
Save for next year
If this season is already here, start saving now for next year. Small, regular contributions add up—one simple strategy is a weekly savings plan. For example, setting aside a fixed amount each week creates a holiday fund you won’t have to borrow from.
Consistent, planned savings eliminate the need to rely on credit for seasonal expenses.
Remember the real meaning of the holidays
No matter which holiday you celebrate, focus on time with loved ones rather than the amount you spend. Experiences and shared moments often matter more than expensive gifts.
How much will you budget for this holiday season?