8 Ways to Make the Holidays Less Expensive and More Memorable

Don't let financial pitfalls of the holidays sneak up on you. These wise money tips will make the season brighter, less expensive, and more memorable!

Laura Adams, MBA
7-minute read
Episode #569
The Quick And Dirty

There are 8 easy ways to make the holidays memorable without breaking the bank. 

  1. Create a holiday giving plan
  2. Remember your values
  3. Shop strategically
  4. Avoid new retail cards
  5. Don’t shop for yourself
  6. Be creative
  7. Maintain savings
  8. Practice gratitude

It seems like we start thinking and talking about the holidays a little earlier every year. It begins well before the Halloween candy and costumes appear and ends with a hangover on New Year’s Day.

The holidays are supposed to be filled with happiness and joy—but they can also wreck your finances if you’re not careful. It’s the most expensive time of year for most Americans, who racked up more than $1,000 in debt on average last year.

Besides overspending on gifts for family and friends, there are other financial pitfalls that can sneak up on us. I know what it’s like to get caught up in too much shopping and consumerism during the holidays.

To make the season brighter, less expensive, and more memorable, consider these eight tips.

8 Ways to Make the Holidays Less Expensive and More Memorable

Here are the details on a variety of ways to financially survive and thrive during the holidays.

1. Create a holiday giving plan.

As early in the season as possible, start thinking about every gift you plan to give. Jot down family, friends, neighbors, co-workers, teachers, and service professionals you’d like to remember. Estimate a gift amount for one, even if you have no idea what to give him or her yet.

Add up your total estimated gift amount and see if it fits into your budget. 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.

To cut costs, you could buy less expensive items or make an economical batch of something homemade and from the heart, such as cookies or tree ornaments.

Also consider additional expenses such as travel, throwing a party, wrapping paper, cards, postage, decorations, or new party clothes. If the total is more than you can afford or want to pay, you might reduce the estimated gift amounts or shorten your gift list.

Next, put the list in order of importance. For instance, you might rank spending $50 on Mom as a higher priority than $30 for Great Uncle Norwood. 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.

To cut costs, you could buy less expensive items or make an economical batch of something homemade and from the heart, such as cookies or tree ornaments. It’s also nice to have extras of inexpensive, homemade gifts so you can reciprocate when someone gives you a gift that you didn’t expect to receive.

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.

Bonus Tips from The Penny Hoarder:

Here are three ways to make a little extra cash for the holidays. If you're looking for more ways to make money fast, check out The Penny Hoarder. 

1. Take an online survey for a $5 gift card. Check out sites like Swagbucks for paid surveys and other bonuses. 

2. Pet Sit for Your Neighbor. Use sites like Care.com, Facebook, or Craiglist to advertise your services to friends, family, and community members.

3. Share Your Amazon Purchase History.  You'll get $3 a month on an e-gift card for sharing your purchase history with the ShopTracker app. 

2. Remember your values

The holidays are the perfect time to remember your values and financial goals. A great way to think about values is to imagine your life in five, 10, and 20 years from now. What do you need to accomplish between now and then to feel successful?

Maybe you want to be retired in 20 years, pay for a child’s education in the next 10 years, or be free of credit card debt within five years. Write down your goals and keep them close to you during the holidays to avoid making poor spending choices. You might tape them to your bathroom mirror, refrigerator, or car dashboard so you’re reminded of your goals and values every day.

3. Shop strategically

It’s important to know the maximum amount you can spend on each person before you start shopping for gifts. That’s because there are a lot of distractions and temptations out there.

I find that shopping online saves time and makes it easy to quickly compare prices to find the best deal. Most online stores offer nice holiday discounts and free shipping. Plus, you’ll avoid crowds, save gas, and not be tempted to eat out.

To make the most of online purchases use Ebates, where you get cash back at thousands of well-known stores. There’s no fee to join, points to redeem, or forms to mail in!

Using a rewards card for holiday expenses is a smart way to rack up cash back or rewards points. But if you can’t pay off your balance in full, this strategy can backfire.

Using a rewards card for holiday expenses is a smart way to rack up cash back or rewards points. But if you can’t pay off your balance in full, this strategy can backfire. Rewards cards typically charge higher interest, so if you know that you’ll need a few months to pay off your balance, choosing a low-interest card is a better option.

Ideally, you’ll have a game plan to maximize card rewards and minimize debt. But if not, consider spending your holiday gift budget 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.

4. Avoid new 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.

So, unless you’re committed to paying off the balance in full each month, stay away from retail cards.

5. Don’t shop for 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.

If you have a history of self-gifting, work it into your holiday budget with a set limit.

6. 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 or gift swap 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 and know other people need, such as computer work, cooking, yard work, babysitting, or washing their dog.
  • Give coupons to inexpensive outings, such as “Trip to the Aquarium” or “Trip to the Skating Rink.”
  • 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. 

When you do something different, it makes the holiday more memorable. Talk to your family and friends about what you want to get out of the holidays. Don't be afraid to break tradition and try something new to save money and give you a more peaceful holiday season.

7. Maintain savings

Being in the holiday season is never an excuse to stop saving money; it’s critical that you stay on track to achieve your financial goals. The end of the year is the perfect time to adjust your 401(k) contributions to make sure you put in as much as you can, up to the allowable annual limits.

If you get a year-end bonus, you might elect to save a larger amount of it for retirement and bump up your total contributions for the year. Also, consider increasing your savings rate for the New Year. For instance, if you’re currently saving 3%, make a commitment to save 4% next year.

As I previously mentioned, you can get ready for the next holiday season by setting up a bank account. You or your employer can set aside a percentage or a flat amount from each paycheck into that account so you can spend it on gifts next year.

8. Practice gratitude

We do a pretty good job of being grateful around Thanksgiving, but we need to keep an attitude of gratitude all year long. Studies about gratitude have shown that it gives us many mental and physical benefits, including increased happiness, stronger relationships, reduced anxiety, better sleep, and lower blood pressure.

Being grateful for what we have helps us focus on what’s really important, and in turn, can nurture good financial habits. Consider starting each day with a moment of gratitude or ending it with an entry in a gratitude journal. That can keep you focused and in a good state of mind all year long, but especially during the often hectic holiday season. 

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.