7 Money-Saving Holiday Shopping Tips

Don’t let holiday spending wreck your personal finances. Follow these money-saving to tips to make the holidays less expensive and more memorable.

Laura Adams, MBA
4-minute read
Episode #246

MoneyThe holidays are supposed to be filled with happiness and joy—but they can also wreck your finances if you’re not careful. Besides overspending on gifts for family and friends, there are other financial pitfalls that can sneak up on us. In order to make sure you have fun during the holidays and don’t do anything you’ll end up regretting after the New Year, follow these 7 tips:

Tip #1: Plan Ahead

Start planning for the holidays as early as possible. Decide how much you can afford to spend on the whole enchilada, like gifts, wrapping paper, shipping, holiday cards, a party, decorating, travel, and new clothes. If you still haven’t paid off last year’s holiday expenses, you definitely overspent—so be sure not to repeat that mistake again this year.

Why not start a separate savings account that’s just for the holidays? You can automatically deposit a small percentage of your paycheck each month throughout the year, so when the holidays roll around you’ll be sitting pretty with cash in the bank.

Tip #2: Stick to a Gift Budget

Instead of deciding what present to buy each person on your gift list—like a sweater for Aunt Jane and a new grill for your brother—set a gift budget for each person instead. That way you don’t get fixated on buying a particular item, which might turn out to be too expensive.

Once you know the total amount you can spend on gifts, make a list of people to buy for and then assign each person a gift amount (remember to include sales tax and shipping where necessary). If you don’t have enough money to cover each person on your list, either you need to shorten your list or reduce the amount you spend on certain people.

Next, put the list in order of importance. For instance, you might rank spending $75 on Mom as a higher priority than $30 for Great Uncle Randolph. You should buy the most important gifts first, so you aren’t tempted to overspend using a credit card if you drain your budget on low priority gifts.

Tip #3: Shop Online

Many people are eliminating co-workers, friends, and extended family from gift lists and are buying fewer items overall.

The internet is the best way to find the gifts you want to buy at the lowest prices. To make the most of online purchases checkout ebates.com, where you get cash back at over 1,200 brand name stores. There’s no fee to join, points to redeem, or forms to mail in!

Online stores typically offer nice holiday discounts and free shipping. Plus, you’ll avoid having to fight the crowds and save gas and a ton of time.

Tip #4: Shop With Cash

If you insist on heading out to the mall to do your holiday shopping, consider taking your gift budget with you in cash. If you have a tendency to be a little too jolly with your credit cards, spending cash will save you from a nasty credit hangover in the New Year.

Create an envelope for each person on your shopping list that contains the amount of money you budgeted to spend on them. If you overspend on Dad, you’ll have to adjust your budget by taking money from someone else’s gift envelope.

Tip #5: Don’t Sign Up for Retail Cards

Store clerks are trained to entice you to sign up for a retail credit card at checkout. Unless you really need a card or shop at the store often enough to really take advantage of rewards, don’t be tempted.

Getting a 10% discount for signing up sounds great—but remember that it results in a hard inquiry on your credit report, which can lower your credit score. Plus, store credit cards typically come with high interest rates that wipe out the upfront discount and may even cause you to end up paying double or triple what you originally intended to spend.

Tip #6: Don’t Spend on Yourself

If you’re like me and tend to buy yourself a few gifts while you’re holiday shopping, stay away from your favorite stores. For instance, if you’re a gadget junkie, avoid going into any electronics stores. Also, when you’re shopping online, stay focused and don’t get sidetracked by sale items.

Tip #7: Be Creative

Though the holidays are steeped with tradition in some families, there’s nothing wrong with getting creative. Here are some gift-giving ideas that can make your holiday party less expensive yet still festive:

  • Do a Secret Santa where each person buys a gift only for one randomly-assigned person.
  • Agree to buy gifts for the children in the group only.
  • Buy gifts for everyone in the group, but decide ahead of time to limit purchases to a low dollar amount.
  • Give coupons for free services you can do, that you know other people need, like computer work, cooking, yard work, or washing their dog.
  • Give donations to charity instead of buying each other gifts.
  • Spend money on traveling to see loved ones or taking a vacation together that doesn’t include gifts. 

There’s no rule that says you have to continue buying for someone just because you gave them a gift in the past. Many people are eliminating co-workers, friends, and extended family from their gift lists and are buying fewer items overall.

When you do something different, it makes the holiday more memorable. Make it a goal to spend quality time with family and friends that doesn’t destroy your budget or put you in debt.

Download FREE chapters of Money Girl’s Smart Moves to Grow Rich

Books always make an affordable holiday gift, so give someone on your list Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite book store in print or as an e-book for your Kindle, Nook, iPad, PC, Mac, or smart phone. You can even download 2 free book chapters at SmartMovesToGrowRich.com!

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.