holiday budget

Holiday Budget Tips

budget wise

Depending on your perspective, the holiday season is either the most joyous time of the year or the most stressful. If you are apprehensive that the holidays are right around the corner, it likely has something to do with the amount of money you will end up spending in the coming months.

The total number of holiday shoppers grew to a record 196.7 million in 2022, according to the National Retail Federation. With numbers like those, it’s no wonder so many consumers develop a higher sense of anxiety when the final quarter of the year comes a-calling.

However, with the right strategies in place, you can lessen the impact that holiday spending has on your household’s bottom line. It takes a little bit of forethought and discipline, but if you approach it correctly, you can enjoy the season without breaking the bank. Here are a few ways to get your head in the holiday shopping mode.

Scroll down for a holiday budget word search!

Begin Saving up Early in the Year

If you plan to go out on holiday shopping, one way to offset the expense is to factor it into your savings throughout the year. By saving a little each month, you could wind up with several hundred dollars in accessible cash by the time shopping season comes around. As a general guideline, look at what you spent last year and calculate your monthly savings goal. This way, you won’t have to scrounge up all that gift money in the last quarter of the year.

Buying a New Car

Tips and tricks to get you through every step of buying a new car, whatever “new” means to you.

Download Now!

Account for All Holiday Expenses

When most people plan their holiday expenses, so much emphasis tends to be put on gifts that they forget about everything else. But decorations, travel, charitable donations and other traditional expenses add up quickly. So, as you’re building your budget for this year’s holiday spending, don’t neglect to take a big-picture view of everything you’re looking to purchase to make the holidays special. Otherwise, you might find yourself coming up short when the time comes.

Decide on an Overall Budget

Once you know what you want to buy for the holidays – again, gifts and all – then you can decide how much money you’re truly willing to spend to cover all the expenses. Come up with the maximum amount that you can justify spending on the holidays, preferably leaning on your holiday savings or other extra money for most of it. If you don’t have a cap on your holiday expenses, you run the very real risk of overspending.

holiday budget

Divide Your Budget Into Categories

From this point, you can determine how much of your master holiday budget you can devote to each specific category. Prioritize your expenses, devoting money first to the ones you cannot go without, and then adjust as you go along. Sure, you might wind up having to tighten the amount you spend on each gift or even forgo certain less important purchases, such as buying gifts for distant relatives or picking up extra decorations. But in the end, you’ll be thankful that you have specified a concrete way to stay firmly within your overall spending limit.

Know What You’re Shopping For

We know all too well the dangers of impulse purchases. You see something in the store and, on a whim, decide to buy it. However, such a decision completely contradicts the methodical use of a holiday budget. Before you even head into the store or begin shopping online, have a sense of what you want to buy. Knowing how much you want to spend on each person makes it easier to decide what to buy. Consider making a list. Build extra gift purchases into your budget just in case you need them.

Keep an Eye Out for Holiday Sales

The retail business often depends on holiday spending to maximize its profits. To that end, the season is brimming with promising sales, most notably the one-two punch that is Black Friday and Cyber Monday. Thanksgiving weekend sees discounts and doorbusters that you simply cannot find any other time of year. Take advantage of these deals to get more without exceeding your spending limits and get a lot of your shopping done in one fell swoop. Even when you’re not shopping the sales, do your research and get the best price.

Check out AAA Discounts to search for the best holiday gifts this year.

Track Your Spending As You Shop

Taking the time to decide on a detailed budget only works if you keep a close eye on your progress. Have your shopping list with you every time you head out and adjust your remaining total accordingly as you do so. If you do overspend, just make the necessary adjustments to the remaining total. If you do a significant portion of your shopping in person, you could also opt to make your purchases only with cash, as this prevents the urge to spend more than what you originally intended.

Say Farewell to Holiday Stress

If you apply the above strategies to your holiday spending, you’re certain to find ways to stretch out your budget without severely curtailing the generous spirit that has become so synonymous with the holidays. Too often, shoppers get swept up in all the pressures of the retail game that they wind up overspending and paying the price for it in the subsequent months. Hopefully, this won’t be you. Not this year.

Holiday Budget Word Search

Use this opportunity to prepare for next holiday season or even build up your family’s savings. If you hope to infuse a bit more money into your savings, we recommend looking into the AAA and Discover deposit program. With four high-yield savings products to choose from, you’ll be able to maximize your savings account.

Leave A Comment

Comments are subject to moderation and may or may not be published at the editor’s discretion. Only comments that are relevant to the article and add value to the Your AAA community will be considered. Comments may be edited for clarity and length.


Subscribe to Your AAA Newsletter

Sign up and receive updates for all of the latest articles on automotive, travel, money, lifestyle and so much more!