How to Make a Holiday Budget

1. Review Last Year's Spending

Last year's holiday spending can be a good jumping-off point when making this year's budget. Start by looking back on your debit and credit card statements from last holiday season, which you should be able to pull up online. Seeing the numbers in black and white can help you clarify your spending habits—and set realistic expectations for this year.

Don't forget to account for the fact that this year's shopping may cost more due to inflation. Global management consulting firm Bain & Company forecasts holiday season sales to exceed $1 trillion for the first time in 2026, estimating 4.5% growth year over year.

But, some expert analysts point to increased costs as a major reason for this year's potential growth in holiday spending. The overall consumer price index was up 3.7% from the same period last year, according to September 2026 data from the U.S. Bureau of Labor Statistics.

2. Consider All Holiday Expenses

You can't make a budget if you don't know your expenses.

Holiday spending can include:

• Gifts for friends and family, as well as presents for gift exchanges like secret Santa
• Decorations such as lights, ornaments, a Christmas tree and lawn décor
• Travel expenses
• Food and entertaining

If you're self-employed or a career freelancer, you may also need to plan ahead for unpaid time off.

3. Set Spending Limits

Once you're clear on your holiday expenses, think about how much you can reasonably spend in each category. Sharing this number with close friends and family might not be a bad idea either. For example, you might set a $75 limit for family gift giving, or a $30 cap on secret Santa exchanges. Gifts aside, it's also wise to put financial boundaries around how much you can spend on traveling, hosting get-togethers and buying decorations. The goal is to assign a rough dollar amount to each holiday spending category.

4. Decide How You'll Pay for Holiday Expenses

Once you're comfortable with your spending limits, the next step is to figure out how you'll cover them. You might choose to:

• Include your expenses in your monthly cash flow. Add your holiday costs to your budget and cover them with your regular monthly income.
• Pull money from your savings as needed. If you go this route, make a plan to replenish those funds as soon as possible. For example, if you withdraw $500 for holiday spending, you could set aside $100 per month going forward to set things right again. Consider it a repayment plan you're making with yourself.
• Use a rewards credit card. With a rewards credit card, your holiday spending could earn you cash back, airline miles, hotel perks or other rewards. Just be sure to pay off your balance at the end of each billing cycle. Carrying a balance from month to month could mean paying interest on your purchases, which will likely negate any rewards. Charging holiday expenses you can't afford could also put you in a debt cycle and damage your credit.

Best rewards cards of 2026

Compare cards from our partners that earn points, cash back or miles on everyday spending.

Offers from our partners

Advertiser Disclosure

(1254)Rated 3.82 out of 5 stars, 1254 reviews

72%

would recommend

Revel^® Platinum Mastercard^®

Ongoing APR:35.90% Fixed

Rewards:

N/A

Annual Fee:$49 - $125

ApplyView details

(188)Rated 4.56 out of 5 stars, 188 reviews

91%

would recommend

Wells Fargo Active Cash^® Card

Intro bonus:

$100

Earn a $100 cash rewards bonus after spending $500 in purchases in the first 3 months.

Intro APR:0% intro APR for 12 months from account opening on purchases and qualifying balance transfers

Ongoing APR:18.74%, 24.74%, or 28.74% Variable APR

Rewards:

2% (Cash Rewards)

Earn unlimited 2% cash rewards on purchases.

Annual Fee:$0

ApplyView detailsRates and fees

(59)Rated 4.88 out of 5 stars, 59 reviews

98%

would recommend

Costco Anywhere Visa^® Card by Citi

Ongoing APR:18.99% - 26.99% (Variable)

Rewards:

1% - 5% (cash back)

Earn 5% cash back rewards on gas at Costco and earn 4% cash back on other eligible gas and electric vehicle (EV) charging purchases for the first $7,000 combined spend per year, and then 1% thereafter. 3% cash back on restaurants and eligible travel purchases and eligible travel, including Costco Travel. 2% cash back on all other purchases from Costco and Costco.com. 1% cash back on all other purchases.

Annual Fee:$0

ApplyView detailsRates and fees

(113)Rated 4.66 out of 5 stars, 113 reviews

90%

would recommend

Citi^® / AAdvantage^® Platinum Select^® World Elite Mastercard^®

Ongoing APR:19.74% - 29.74% (Variable)

Rewards:

2x (Miles per dollar)

Earn 2 AAdvantage^® miles for every $1 spent at gas stations and restaurants, and on eligible American Airlines purchases. Earn 1 Loyalty Point for every 1 eligible AAdvantage^® mile earned from purchases.

Annual Fee:$99, waived for first 12 months

ApplyView detailsRates and fees

(6)Rated 3 out of 5 stars, 6 reviews

40%

would recommend

First Progress Select Secured Mastercard^® Cash Back Rewards

Ongoing APR:17.74% Variable

Rewards:

1% - 10% (cash back)

Earn up to 10% Cash Back on everyday purchases at participating dining, grocery, retail, and other eligible merchants, plus 1% Cash Back on payments made to your First Progress Card.^^

Annual Fee:$39

ApplyView detailsRates and fees

(898)Rated 3.89 out of 5 stars, 898 reviews

73%

would recommend

Credit One Bank^® Platinum Rewards Visa^® Card

Ongoing APR:29.99% Variable

Rewards:

1% (cash back)

Earn 1% cash back rewards on eligible gas, grocery purchases and mobile phone service, internet, cable and satellite TV services, terms apply

Annual Fee:$39

ApplyView detailsRates and fees

Terms Apply

(65)Rated 4.58 out of 5 stars, 65 reviews

88%

would recommend

Delta SkyMiles^® Blue American Express Card

Intro bonus:

10,000 Miles

Earn 10,000 bonus miles after you spend $1,000 in purchases on your new Card in your first 6 months.

Ongoing APR:19.74%-28.74% Variable

Rewards:

1x - 2x (Miles per dollar)

Earn 2X Miles per dollar at restaurants worldwide, plus takeout and delivery in the U.S. Earn 2X Miles per dollar spent on Delta purchases, and 1X Mile on all other eligible purchases.

Annual Fee:$0

ApplyView detailsRates and fees

Terms Apply

(39)Rated 4.23 out of 5 stars, 39 reviews

Bank of America^® Travel Rewards credit card

Intro APR:0% Intro APR for 15 billing cycles for purchases, and for any balance transfers made in the first 60 days

Ongoing APR:17.74% - 27.74% Variable

Rewards:

1.5x - 3x (Points per dollar)

3 points per $1 spent on travel purchases booked through BofA Travel and 1.5 points per $1 spent on everyday purchases

Annual Fee:$0

ApplyView details

Show more Show less

See all our best rewards credit cards for 2026.

5. Find Ways to Save

There are plenty of ways to save money this holiday season (and beyond). Here are a few ideas to help your holiday budget go a little further:

• Shop around and compare prices before buying gifts.
• Follow brands on social media and keep an eye out for sales.
• Look for discounts and coupon codes.
• Cancel unused subscriptions and redirect your savings.
• Try a savings challenge in the run-up to the holidays.
• Start meal planning and curb your restaurant visits.

Learn more: Ways to Save Money This Year

6. Keep Track of Your Spending

When it comes to budgeting for the holidays, you'll want to pay attention to how much you're spending. Remember those spending limits you created earlier? Tracking your spending can help you stick to them. One simple way to do this is to keep your holiday shopping list as a note in your phone. Next to each category, put the amount you're able to spend.

For example:

• Mom's gift: $50
• Holiday travel: $400
• Secret Santa gift: $25
• Decorations: $75

Whenever you make a holiday purchase, deduct that amount from the corresponding total. You can also track your spending with an app or by reviewing your debit and credit card transactions. What matters most is being aware of what you're spending.

Learn more: Best Budgeting Apps

7. Get a Jump on Next Holiday Season

It's never too early to start padding your budget for the holidays. If this season is already underway, look ahead to next year and start saving in January. Let's say your total holiday budget is $1,000. If you put aside $100 a month, you'll meet your goal by October. (Saving little by little is the idea behind sinking funds.) You can also put a portion of cash windfalls, like side gig income and tax refunds, toward your holiday budget.

The Bottom Line

Taking the long view can help you make a strong holiday budget—and avoid holiday debt. Just be sure not to neglect your other financial goals in the process, like paying down high-interest debt and improving your credit score. You can check your FICO^® Score^Θ and credit report for free with Experian.