Best Ways to Reduce Spending and Save Money Over the Holidays

October 20, 2022
Best Ways to Reduce Spending and Save Money Over the Holidays

If you’re feeling a pinch in your wallet this year you’re not alone. With inflation, supply chain issues, high gas prices, and wage stagnation, many Americans are feeling anxious about their financial well-being heading into the holiday season. According to a recent national survey, almost 40% of Americans say their personal family finances have deteriorated in the past year—up 8 percentage points since February 2022.

This holiday season, debt accumulation due to overspending is out, and it may be time for some new holiday traditions. Specifically, traditions that simultaneously foster those joyous holiday moments you’ve come to love and help you save money by reducing holiday spending. It’s all in the planning. Here are some ideas to consider.

20 Best Ways to Save Money This Holiday Season

1. Create a holiday budget.

With all the tempting deals and shiny new products, it’s easy to get sucked into overspending. Instead, create a budget that includes all of your anticipated costs including gifts, travel, pet boarding, events, extra groceries, and seasonal home decor. By setting parameters in advance you can avoid the temptation to overspend in the shops.

2. Shop early.

Supply chain choke points will likely cause gift delays again this year. Plus, a lot of the best deals are expected to be posted early. These are both good reasons to get a head start on your shopping.

3. Stick to a shopping list.

Aside from preventing impulse buying, a well thought out list can help you more easily comparison-shop and stay on budget.

4. Stay home for the holidays.

A great way to save money over the holidays is to skip the pilgrimage to see the relatives and build some traditions at home. By visiting family after the holiday, you can save money and still share quality time without the added expense or hassle of high-season travel.

5. Be flexible about when you fly.

Airfares tend to increase in the last six weeks of the year. Book early and be flexible about what days you choose to fly. In some cases, it’s less expensive to fly on the holiday itself instead of the days leading up to it—for example, traveling on Christmas Day as opposed to Christmas Eve.

6. Set boundaries around gift giving.

Rather than exchanging multiple gifts with everyone in your clan, help organize a system where each person gives one gift and gets one gift (e.g., Secret Santa) and there is a set spending limit. Another idea is to gift only the grandkids, or kids 18 and under. Or you can all chip in on one big-ticket gift or a family experience everyone can enjoy. And there’s always the option to forgo gifting entirely and focus on togetherness. After all, that’s what the holidays are all about.

7. Give your time.

Gifts don’t always need to be physical items. You can also give the gift of raking leaves, organizing a room, delivering a home-cooked meal, babysitting, massaging tired feet, etc.

8. Find (and use) those old gift cards.

An estimated $3 billion in gift cards go unused each year. Some estimates put the total number of unused gift cards at $21 billion. If you have some of this plastic hiding at the bottom of a dusty drawer, dig them out and put them to good use.

9. Reduce, reuse, and regift.

One person’s giveaways are another person’s treasures. Take a good look at your unwanted storage items and see if there might be someone on your gift list who would love it. Family heirlooms, new or gently used books, jewelry, clothing, kitchen gadgets, and electronics are all good options. This is also better for the planet.

10. Make it a potluck.

Throwing a holiday party is a huge investment of time, money, and energy. So perhaps spread the responsibilities around by having guests bring their favorite side dishes, desserts, and drinks. This can add up to a big savings at the grocery store. Plus, it gives guests the opportunity to showcase their culinary genius and share the limelight.

11. Thrift (or share) your holiday style.

From ugly sweaters for the holiday office party to sequined cocktail dresses and tuxedos, you can create a whole new look on a dime at the thrift store. If there’s no convenient store nearby, look online. Many flagship locations have gone virtual, making it easier than ever to thrift. If you aren’t an online shopper, try swapping closets with a friend so you both can wear something new-to-you.

12. Send e-cards.

Creative, sometimes musical, and usually free—sending e-cards instead of the expensive paper version is a fun, easy way to stay in touch with distant friends and family. Apps like Punchbowl® and Blue Mountain® offer free greeting cards, as well as fancier ones with an annual subscription.

13. Plan for free shipping.

December 14, 2022 is Free Shipping Day for more than 1,000 big name and niche online retailers who promise that items shipped that day will reach your recipient by December 24. This day of free shipping can be a great way to finish last-minute holiday shopping, save on shipping costs, and avoid the crowds. Some participating stores also waive minimum ordering requirements and offer additional discounts.

14. Skip Black Friday.

On Black Friday (November 25) and Cyber Monday (November 28) more than 100 million people step away from their Thanksgiving celebrations to take advantage of what they perceive to be great deals. But retailers take advantage of the hype around these days and the deals often aren’t all they’re cracked up to be. In fact, Black Friday 2021 reportedly saw the least generous deals in years. The hype often lures people into piling their carts high with budget-busting impulse buys. This year, consider opting out altogether.

15. Upcycle holiday decor.

Shop your home to turn what you already have into holiday decorations. Get crafty and turn cookie cutters and tin cans into tree ornaments, mason jars into outdoor luminaries, wine corks into table decorations. Save paper or tinsel garland and used wrapping paper for shipping gifts.

16. Enjoy the harvest.

Instead of spending money on plastic decorations, take a neighborhood walk or hike with the kids to gather natural materials like leaves, evergreen branches, and pinecones. Match them with inexpensive supplies like candles, cinnamon sticks, and ribbons to adorn your tabletops, mantle, and front door.

17. Protect yourself from porch pirates.

Don’t let a package thief ruin your holiday. Sign up for UPS® My Choice, USPS® Informed Delivery, or FedEx® Delivery Manager—free services that let you know when your packages are scheduled to arrive. You can also have Amazon® orders delivered to an Amazon Hub Locker near you. USPS and UPS will also hold and redirect mail and packages for you.

18. Do it yourself.

If you practice a craft like knitting, carving, drawing, pottery making, calligraphy, jewelry design, scrapbooking, or baking, there’s a chance someone in your life might prefer the feel-good vibes of your craftsmanship instead of something factory-made and store bought.

19. Resist the self-gifting urge.

In the rush of gift shopping, it’s tempting to throw a present for yourself into your cart. No doubt you deserve it, but this urge runs counter to belt-tightening. Remind yourself to stay on track, and add your wants to your wish list, instead. If you still feel the urge to reward yourself, add your name to your official shopping list with a set dollar limit.

20. Embrace the joy of giving no gifts.

More and more families are choosing not to exchange gifts at all and focusing on the holiday experience instead. Take a moment to reflect on the true spirit of the holidays and what that means to you. Whether it’s reaffirming your faith, reconnecting with loved ones, giving back to your community, being kind to strangers, or something else entirely, gaining some perspective on what and why you’re celebrating can provide the comfort and strength you need to stick to your financial goals. And it’s free.

The Bottom Line

Perhaps the best tip of all is one that you can use for the next holiday season: set aside a little money every month for your holiday expenses between now and then. Some banks and apps have a “round up” savings mechanism on purchases (for example, if you spend $3.25 for a cup of coffee, 75 cents is deposited in your savings account). When you take time to budget wisely and plan for your holiday spending, you feel more in control of your money and your life.

And if you’re still paying off last year’s holiday debt, don’t beat yourself up. There are solutions available, such as a credit card consolidation personal loan, that can help you regain control of your finances and still have a festive holiday season.

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