14 Ways to Save Money During the Holidays

Quick Answer

If you’re worried that inflation will cut into your holiday budget this year, you can keep spending in check by following money-saving tips. Consider making a budget, shortening your gift list and shopping smart this holiday season.

Woman holding credit card while looking up tips for spending wisely during the holidays.

The holidays are on the horizon—and if you're anxious about their impact on your bank account, you've got company. Last year, U.S. consumers spent an average $997.73 on holiday gifts alone, according to the National Retail Federation, and one-third of consumers were worried about overspending. Inflation, recession concerns and other factors may take a toll on your holiday budget this year. To keep holiday spending under control, make a gift list, set a budget and use savvy shopping strategies to save. Here are 14 tips to make the most of the holidays without breaking the bank.

1. Set a Holiday Budget

It's easy to throw financial caution to the wind during the holidays, but reckless spending can sabotage bigger financial goals. Running up your credit cards can also hurt your credit score. If you can't pay the balance in January, you'll owe interest that could wipe out any savings from buying on sale. Review your finances and set a realistic holiday budget to keep spending under control.

2. Make a List…

Gather wish lists from family members and jot down gift ideas for friends. Shopping without a list leads to impulse buys and panicky last-minute purchases that can blow your budget. Armed with a list, you can search for specific items, compare prices and find the best deals.

3. …But Keep It Short

We're all feeling the pinch of inflation, so friends and family will probably be grateful if you suggest dialing down the gift-giving this year. Go over your gift list and consider who you can leave off. Instead of exchanging gifts with everyone in your friend groups, try a secret Santa exchange so each person buys only one gift. Minimize spending on extended family by gifting children and not adults, or exchanging gifts the whole family can use, like board games, puzzles, or zoo or museum memberships.

4. Cut Costs Elsewhere

Look for ways to trim spending in other areas and use the savings for your holiday fund. Eliminate unused streaming subscriptions and memberships. Shop around for lower rates on car and home insurance. Buy generic brands, shop sales and use what's in your pantry to save on groceries.

5. Ease Up on Entertaining

Your guests care more about seeing you than about what you serve. To be the host with the most while spending the least, host small, intimate gatherings instead of big bashes. Go potluck and ask everyone to bring a dish. Throw a cocktail party with drinks and appetizers instead of a sit-down dinner.

6. Limit Little Luxuries

It's tempting to buy yourself gifts when shopping for others or indulge in a latte break after hours at the mall. But little treats can add up fast. Strike a balance between self-sacrifice and splurging by setting a budget for treating yourself.

7. Think Memories, Not Material Things

Put that into practice by focusing on making memories rather than exchanging gifts. Think of ways your family and friends can have fun together for free, like caroling, looking at holiday lights, going sledding or having a snowball fight. Start a new tradition of volunteering at the holidays—local nursing homes, homeless shelters and children's charities are always looking for help this time of year.

8. Socialize Selectively

Are you a social butterfly, getting invited to dozens of parties, dinners and get-togethers? Costs can add up, whether it's paying for dinner at a restaurant, bringing a hostess gift to a party or finding something new to wear. Pick and choose among your invitations and say yes only to those that you really care about.

9. Reuse and Recycle

Holiday décor, gift wrap, greeting cards and postage can add up. Look around your house for things to repurpose instead. Craft pinecones, egg cartons or empty jelly jars into wreaths, tree ornaments or candleholders. Reuse wrapping paper and gift bags; wrap gifts in brown kraft paper you decorate with markers or paints. Customize and send digital greeting cards and videos from sites like American Greetings, Hallmark or Jacquie Lawson.

10. Avoid Temptation

Holiday ads, social posts and marketing emails all urge you to buy, buy, buy. Determine what pushes your shopping buttons and avoid those triggers. Do holiday sights, sounds and crowds in stores induce overspending? Shop online instead. Can't resist a sales email? Create an email account just for retailers and check it only when you're shopping for what's on your list. Do influencer posts spur splurges? Unfollow your biggest tempters until your shopping is done.

11. Shop Strategically

The best holiday deals aren't always on Black Friday or Cyber Monday. More than one-third (37%) of U.S. shoppers plan to start holiday shopping earlier this year, Salesforce reports—a smart way to avoid the impact of inventory shortages and rising inflation. Use shopping apps and browser extensions such as ShopSavvy, Karma, RetailMeNot or Honey to compare prices, get alerts of price drops and automatically apply coupon codes for the best deals.

12. Buy Used

Popular—and pricey—tech gadgets often top holiday wish lists. Save by searching online for used or refurbished smartphones, tablets, game consoles and laptops. Make sure to buy from a reputable source. Many manufacturers, major retailers and cellphone carriers refurbish and sell "certified refurbished" devices, which often include a one-year warranty. And while it may not work for every recipient, shopping thrift stores, resale sites and yard sales for gifts is another way to save.

13. Celebrate After the Holidays

Holiday travel is stressful and pricey, with fares typically sky-high on key days. Plan your family gathering for after the holiday to cut airfares and travel costs. You'll even save on gifts if you wait for post-holiday sales to shop; just know the selection will be limited compared to shopping earlier.

14. Pay Smart

Some credit cards offer purchase protection and extended warranty coverage on products purchased with the card. This can be beneficial if you're buying electronics or other items that may break down. Using a credit card with an introductory 0% annual percentage rate (APR) is another way to stretch your holiday budget. Pay off the balance before the intro 0% APR period ends—often 12 months or more—and you won't incur interest. Some credit cards offer introductory bonuses like rewards or cash back for spending a certain amount on the card within a set period. You'll need good credit to qualify for these cards, so before applying, check your free credit report and credit score. When shopping with a credit card, be sure you can pay off your balance before racking up interest, and don't let rewards entice you to overspend.

The Bottom Line

Does scrimping on the holidays make you feel like Scrooge? Lavishing money on holiday gifts and entertainment can seem like a way of showing our love. But for many of us, the pandemic meant holidays without friends and family. What did you miss most: the presents, or the people? If the past two years have taught us anything, it's that time with your loved ones is what really matters—and that's something you can't put a price tag on.