The holidays are a time for celebrating and giving, but let’s be real: It gets expensive.

While buying the best for your nearest and dearest might give you a warm and fuzzy feeling in the moment, overspending can leave you in a vulnerable position as you take on 2021.

A survey by MagnifyMoney found that American respondents racked up an average of $1,325 in debt during the 2019 holiday season. What’s worse, 78% of them didn’t expect to be able to pay it back by January.

The best way to prepare for the holiday season is to land on a Christmas budget a year in advance, divide it by 12, and put away that amount every month.

But if that’s not the set up you’re dealing with, you need tactical advice for working with what you have. I’ve got you covered.

 

1. Set a Budget and Stick to It

The first thing you need to do is decide how much money you can spend on gifts and celebrations. I’m not talking about how much you’d like to spend, but an amount you can actually afford.

Ideally, this is an amount that you can build into your budget for November and/or December. If you don’t have a budget, now’s a great time to start — check out this budgeting guide.

Once you have a budget in mind, make a list of the people you want to buy for and assign a budget for each person. Now you have a guideline when you start shopping.

 

2. Find Extra Room in Your Budget

If you have a budget but every dollar is accounted for, it’s time to get creative. Where could you minimize holiday spending to find extra money?

 

Food

Depending on your situation, food might be a category you spend less on over the holidays — or it could be one that blows up. If you usually get invited out for meals, maybe you’ll spend a bit less. But if you host, you should expect to spend more.

You can cut down on extraneous food spending leading up to Christmas by nixing eating out, shopping grocery sales, and using coupons where you can. It might not be super-exciting, but beans, rice, and frozen veggies make a healthy and cheap meal.

Don’t forget cash back apps like Dosh and Ibotta when you’re grocery shopping. A few dollars back on each grocery run leading up to Christmas can cover a small gift!

 

Clothes and Beauty

This doesn’t apply to everyone, but some people tend to spend a little more on things like new outfits for holiday parties. December is an extremely busy time for hair and nail salons, too.

Take a break this year and I’ll bet you find it doesn’t take much away from your holiday experience. But the money you would have spent on a new outfit could cover several nice-sized gifts!

 

Subscriptions

Could you try canceling a couple of subscriptions this month to recoup the cash? You might find you don’t even miss them. Things like music streaming, video streaming, and audiobook subscriptions are ones to consider.

For example, if you have Amazon Prime, you can live without Apple Music and Netflix, because you already have Prime Video and the basic Amazon Music. Even if you love audiobooks, maybe you could stick to free podcasts this month or get them from the library instead.

 

3. Earn Extra Money with a Flexible Side Hustle

If an honest analysis of your budget reveals there is no money to spare, you essentially have three options:

  1. Don’t buy any gifts this year
  2. Go into debt to finance Christmas
  3. Find a way to earn some extra money

Option 1 isn’t realistic for most, and option 2 is a terrible idea…but option 3 is golden. These days, there are so many legitimate side hustle opportunities that can help you earn the extra money you need to cover your essential holiday spending.

Do you have any skills that could make money quickly? Check out job boards like Upwork to find paid writing, proofreading, web design, and data entry opportunities — and much more.

If you can’t take much on right now, you can earn a few extra dollars getting paid to take surveys. This won’t make you rich, but you can absolutely earn some extra cash or score an Amazon gift card to help with your shopping. Check out our list of the best survey sites.

Lastly, consider decluttering and selling your unwanted items on Craigslist or Facebook Marketplace. I started doing this as a way to open up my space and earn a few extra dollars, but now I get so much satisfaction from knowing that an item that I might otherwise throw out is enriching someone else’s life. The saying, “one man’s trash is another man’s treasure” is so true!

 

4. Be a Smart Spender

Now that you know how much money you have to spend, you need to spend it wisely. Always shop for the best price before you make a purchase, and don’t forget to look for coupon codes and cash back offers to offset the cost.

Free tools like Capital One Shopping and Rakuten take the work out of finding deals and saving money.

 

5. Consider Less Expensive Gifts

I’m going to preface this with a disclaimer: Be realistic about who this tip will work for. Your 13-year-old son will probably not be pleased if you give him homemade jam for Christmas, but your sister might love it!

These days, people have more stuff than they know what to do with. Consider a consumable gift instead, either homemade or from a local boutique business. These gifts look thoughtful, are relatively inexpensive, and are a refreshing change.

Related article: I Am a Cheap-Ass Santa

 

6. Suggest Alternate Gift-Giving Models

When you have a large circle of family and friends, Christmas spending can get out of control quickly. If you’re buying gifts for your two kids, your spouse, your parents, your siblings, six nieces and nephews, plus your close friends…well, it gets expensive fast.

Why not suggest that the extended family or your friend group do Secret Santa or a White Elephant Gift Exchange? That way, each person only buys one gift (with a spending cap), but everyone gets to enjoy the fun that goes along with the game.

 

7. Don’t Spend on Fluff

You want to make your money go as far as it can, so don’t waste it on fancy wrapping paper and gift bags. That’s all for show, and no one really cares about it.

If you must buy these things, get them at the dollar store. Or you can be like me and make a joke out of wrapping gifts in newspapers or flyers. When you receive gift bags, store them carefully to reuse for next year. Not only does that save money, it also reduces waste, which feels awesome.

Related article: Why I’m Spending Over $4,000 on My Kids for Christmas This Year

 

8. Cash in on Credit Card Rewards

As long as you always pay your bill in full, rewards credit cards are an awesome way to get extra value for your money. If you have a great cash back credit card, consider cashing in some rewards to help with your holiday spending. Hey, you earned it!

 

9. Open the Lines of Communication

It feels tacky, but there’s no reason you can’t be honest with the people closest to you.

Tell them you’re trying to keep things low key for Christmas, and you hope they’ll do the same. Say that you hope to spend some quality time together rather than focusing on gifts. It doesn’t sound cheap, it sounds thoughtful. And honestly, they’ll probably be relieved. Remember, you aren’t the only one feeling financial pressure during the holiday season.

Especially if you have kids, it’s 100% acceptable to tell friends and extended family that you’re mainly buying for your immediate family this year. Show those people you’re thinking of them through a personal message in a Christmas card, but don’t stress about gifts.

 

Holiday Spending: Final Thoughts

Holiday financial pressure is real, but if you stick to these tips, you should be able to escape relatively unscathed.

Tips Keep Holiday Spending in Check Pin - picture of homemade stack of presents falling over

It sounds trite, but it really is the thought that counts. So, try to focus on creating happy experiences instead of worrying about expensive gifts.