How to Budget for Your Holiday Shopping This Year
The holiday season is a time for cheer, giving and connection — but for many people, it’s also a time of financial stress. Between pricey gifts, expensive decor, big parties and costly travel, expenses can snowball faster than a runaway sled.
What if you could enjoy the season without drowning in bills that start showing in January? With a little planning and a few clever strategies, it’s possible to celebrate without sabotaging your finances. Here’s how to pay for your holiday shopping — and actually feel good about it.
1. Start with a holiday budget
Before you buy anything, decide how much you can realistically spend this season. Include gifts, wrapping paper, decorations, food, travel, donations and all the little extras. Break it down by category and set spending limits. A budget might not feel all that festive, but neither does credit card debt.
Pro tip: Use a budgeting app, like YNAB, to track spending in real-time.
2. Use cash or a prepaid card
If you tend to overspend with a credit card, consider shopping with cash or a prepaid debit card. Load it with your budgeted amount, and once it’s gone, it’s gone. It’s a foolproof way to avoid overspending and it gives you a clear sense of what you’ve got left.
3. Leverage credit card rewards
If you have a credit card that issues rewards for prior spending, now’s the time to cash in. Points or cash-back earnings from earlier in the year can help pay for gifts or groceries. Alternatively, use the card strategically — earn rewards on your purchases, then pay off the balance immediately to avoid accruing interest.
4. Split the cost with others
Coordinate with siblings, coworkers or friend groups to go in together on larger gifts. Pooling resources can help you give something meaningful without shouldering the full cost. For parties or meals, don’t be afraid to suggest a potluck or gift exchange like Secret Santa or White Elephant — it’s fun and budget-friendly.
5. Use layaway or buy now, pay later cautiously
Some stores offer layaway programs, allowing you to reserve an item and pay in installments without using credit. Others offer “Buy Now, Pay Later” (BNPL) services like Afterpay or Klarna. While these can be helpful if used responsibly, they do tend to carry heavy fees and late charges. It’s best to follow this rule of thumb: If you couldn’t pay for it in full today, reconsider whether it’s worth the long-term cost.
6. Tap into side hustles or seasonal gigs
A little extra income can go a long way this time of year. Consider picking up a holiday side gig. Many retailers, delivery services and catering companies need seasonal help. It just may be the perfect solution for both you and them!
7. Give meaningfully, not expensively
The best gifts don’t have to cost a lot. Handmade gifts, photo books, home-baked treats or even heartfelt letters can mean more than something off the shelf. You can also create “experience” coupons for meaningful gifts, like a movie night, babysitting service or homemade dinner.
Remember: What people treasure most is your thoughtfulness, not the price tag.
8. Use store coupons, sales and cash-back tools
Maximize every dollar by shopping with coupons, loyalty points and cash-back tools. Download apps like Rakuten, Honey or Ibotta to get instant savings or rebates. You can also sign up for store loyalty programs or newsletters that offer exclusive discounts. Stack deals when you can by using a promo code on top of a sale and pay with a rewards card for triple savings.
9. Shop early and strategically
The earlier you start, the more options you have — and the less likely you are to panic-buy last-minute overpriced items. Watch for early Black Friday sales or clearance sections. Shopping slowly over a few paychecks also prevents big, painful hits to your checking account.
Bonus: Early shoppers tend to spend less overall — no rush, no pressure.
Use these tips to find the perfect way to pay for your holiday shopping this year.