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

(923)Rated 4.55 out of 5 stars, 923 reviews

90%

would recommend

Citi Double Cash^® Card

Intro bonus:

$200

Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou^® Points, which can be redeemed for $200 cash back.

Intro APR:0% for 18 months on Balance Transfers

Ongoing APR:18.49% - 28.74% (Variable)

Rewards:

2% (cash back)

Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time. Plus, earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel.

Annual Fee:$0

ApplyView detailsRates and fees

Blue Cash Everyday^® Card from American Express

Intro bonus:

As High As $200 Cash Back. Find Out Your Offer.

You may be eligible for as high as $200 cash back after spending $2,000 in purchases on your new Card in the first 6 months. Welcome offers vary and you may not be eligible for an offer. Cash back is received as Reward Dollars, redeemable for statement credit or for other select options. Terms Apply.

Intro APR:0% on Purchases and Balance Transfers for 15 months

Ongoing APR:19.74%-28.74% Variable

Rewards:

1% - 3% (cash back)

Earn 3% Cash Back on Groceries at U.S. supermarkets, on up to $6,000 per year in purchases (then 1%). 3% Cash Back on U.S. Online Retail purchases, on up to $6,000 per year in purchases (then 1%) 3% Cash Back on Gas at U.S. gas stations, on up to $6,000 per year in purchases (then 1%) Cash back is received as Reward Dollars that can be redeemed for a statement credit or for other select options.

Annual Fee:$0

ApplyView detailsRates and fees

Terms Apply

(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

(14)Rated 4.64 out of 5 stars, 14 reviews

92%

would recommend

Marriott Bonvoy Brilliant^® American Express^® Card

Intro bonus:

100,000 Bonus Points

Earn 100,000 Marriott Bonvoy^® bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership.

Ongoing APR:19.74%-28.74% Variable

Rewards:

2x - 6x (Points per dollar)

Earn 6X Marriott Bonvoy^® points for each dollar of eligible purchases at hotels participating in Marriott Bonvoy. Earn 3X points at restaurants worldwide and on flights booked directly with airlines. Earn 2X points on all other eligible purchases.

Annual Fee:$650

ApplyView detailsRates and fees

Terms Apply

(23)Rated 4.74 out of 5 stars, 23 reviews

91%

would recommend

Hilton Honors American Express Surpass^® Card

Intro bonus:

130,000 Points

Earn 130,000 Bonus Points plus a Free Night Reward after you spend $3,000 in purchases on the Hilton Honors American Express Surpass^® Card in the first 6 months of Card Membership. Offer ends 01/13/2027.

Ongoing APR:19.74%-28.74% Variable

Rewards:

3x - 12x (Points per dollar)

Earn 12X Hilton Honors Bonus Points for each dollar of eligible purchases charged on your Card directly with a hotel or resort within the Hilton portfolio. Earn 6X Hilton Honors Bonus Points for each dollar of eligible purchases on your Card at U.S. restaurants, at U.S. supermarkets, and at U.S. gas stations. Earn 4X Hilton Honors Bonus Points for each dollar of U.S. Online Retail purchases. Earn 3X Hilton Honors Bonus Points for all other eligible purchases on your Card.

Annual Fee:$150

ApplyView detailsRates and fees

Terms Apply

(87)Rated 4.31 out of 5 stars, 87 reviews

Bank of America^® Customized Cash 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% - 6% (cash back)

Earn 6% cash back for the first year in the category of your choice. You’ll automatically earn 2% cash back at grocery stores and wholesale clubs, and unlimited 1% cash back on all other purchases. After the first year from account opening, you’ll earn 3% cash back on purchases in your choice category. Earn 6% and 2% cash back on the first $2,500 in combined purchases each quarter in the choice category, and at grocery stores and wholesale clubs, then earn unlimited 1% thereafter. After the 3% first-year bonus offer ends, you will earn 3% and 2% cash back on these purchases up to the quarterly maximum.

Annual Fee:$0

ApplyView details

(54)Rated 4.5 out of 5 stars, 54 reviews

BankAmericard^® credit card

Intro APR:0% Intro APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days

Ongoing APR:15.24% - 26.24% Variable

Rewards:

N/A

Annual Fee:$0

ApplyView details

(42)Rated 4.62 out of 5 stars, 42 reviews

Bank of America^® Unlimited Cash 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:

1.5% (cash back)

1.5% cash back on all 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.