woman budgeting her holiday spending
Budgeting & Saving

Think of one word that comes to mind when you think of holiday shopping. It’s probably budgeting, right? Okay, maybe it’s not the first word that comes to mind—but it should be. The holiday shopping season can be a lot of fun, but it may also be financially damaging. According to the National Retail Federation, Americans routinely spend more during the holiday season than during any other time of year. Good budgeting is your best defense against overspending, and we have some holiday shopping tips to help you stay smart with your money this season.

Tip #1: Build your holiday budget

Before you even start leafing through the holiday ads or scrolling for deals online, it’s a good idea to create a rough budget. It doesn’t have to be down to the penny, but get a rough picture of your financial plan for the next few months. Consider how much of your savings, income, and credit limits you can responsibly spend.

Once you have that estimate, figure out how much you’re able to spend on your holiday shopping. Think about how much you’ve spent in years past, take stock of what you already have, and set your goals for the season. Be sure to check your credit utilization before shopping as well. It’s a good idea to keep your credit utilization below 30%. Maxing out a credit card could negatively impact your credit score. You can check your credit utilization at Best Egg Financial Health.

Finally, set your holiday spending limit that includes a bit of a cushion just in case you miss out on a few deals or if there’s a last-minute addition to your shopping list.

Tip #2: Create a holiday shopping list

List everything you’re gifting, cooking, baking, and decorating. Once your list is complete, estimate the expenses. You should plan to spend no more than your holiday budget limit.

Think of your holiday shopping list like your grocery list. Write out what you plan to purchase—and stick to that list. Just like a grocery list can help keep you on track and save you money, keeping a holiday shopping list can help keep you organized and prevent impulse purchases that could put you over budget.

Tip #3: Seek out the bargains

Now comes the fun part of holiday shopping—bargain hunting. Research the stores and websites advertising the lowest prices on the items on your list. Most retailers will promote deals well ahead of the popular shopping days, so make note of them and prepare to be in-store or online during those times to take advantage of the sales.

While some door-buster deals may seem too good to pass up, if the items aren’t on your list, don’t buy them. It’s a slippery slope to a busted budget if you allow yourself to stray from your plan. Use your list to keep track of your spending and adjust if you under or overspend on an item. If you overspend for one gift, make sure you spend a little less than you had planned on another to balance it out. If you’re worried that you may be tempted to overspend, it may be a good idea to shop with a friend or family member who can help you stay on track.

Tip #4: Some of the best gifts don’t cost anything

Remember, the holiday season is all about showing others you care. While expensive gifts may be a nice gesture, consider alternatives to traditional gift-giving. Plan a unique experience. Take some time to do something they love, like a trip to the lake, a sporting event, or a ballroom dance class.

Consider cooking their favorite meal, baking their favorite treat, or spending a day volunteering for their favorite cause. Making memories with your loved ones is priceless and can most often be done without overspending.

In conclusion, whether bargain hunting or getting creative with gifts, make sure you’re keeping your holiday spending in check. January credit card bills always seem to come sooner than you expect, so follow these tips, and you’ll be the master of smart holiday shopping.

This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.

Happy family unpacking boxes

A major purchase doesn’t have to be a major hassle

Get the funds you need without the stress with a loan from Best Egg

Learn more

Resources

Learn more about managing debt

7 minute read
4 minute read
3 minute read
3 minute read
4 minute read
6 minute read
6 minute read
5 minute read
4 minute read

Financial confidence starts here

We have the information and insights you need to take control of your financial health.

Get started