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7 ways to stick to a holiday budget

November 10, 2020

By Katie Levene

Sometimes the most wonderful time of the year can feel like a financial burden. This year could be different with our seven tips for sticking to a holiday budget.

Budgets can get a bad rap for making you feel restricted, but a budget can help you feel a sense of purpose and bring clarity to your holiday budget. ‘Tis the season for increased expenses but it doesn’t have to hurt your wallet. Let’s take a look at some ways you can start rocking this holiday season.

1. Create a realistic holiday budget

Starting a budget sounds more daunting than it has to be. To get going, take a look at your holiday spending last year. It’s as simple as logging in to your online banking and looking at purchases for November and December.

Subtract your typical monthly expenses like housing, utilities and subscriptions. These calculations can give you an estimate of what you spent last year and can help you set some realistic goals for this year.

Once you have your budget set, you can start spending with a clear goal in mind.

2. Set expectations for family and friends

If the holidays are going to look different to your family and friends, it can be good to set expectations for your gift receivers. You can explain that Santa is only giving one gift this year to your kids. You can also brainstorm a virtual party instead of dinner with the extended family.

Sometimes extended families will have everyone give a holiday gift. Discuss mixing up the tradition by drawing names in a hat so that one family member can get another family member something meaningful.

In some families, these conversations can be extremely difficult. Don’t be afraid of talking about your personal finance goals. It could be a good way to talk about the spirit of the season and how you plan to share the love in other ways.

Ask for creative ideas (include the kids too). You might be surprised by their ideas and you’ll start new traditions everyone loves!

3. Create a list, check it twice and stick to it

Now that you have a better idea of what the holidays will look like this year, create a comprehensive list of expenses for the season. The list can be as detailed or general as you’d like. List out who you’ll be getting gifts for and what they may want. With a gift list, you can spend more time finding deals than thinking about what gifts you might be forgetting.

Pro tip: Factor in items like wrapping paper, bows and decorations. Those types of expenses can sneak into a big part of your holiday shopping budget.

4. Track your purchases

As you start spending on your holiday items, keep a log of your purchases and how you’re doing against your budget. Shop around before you buy to find the best deals. Also, don’t forget to take advantage of your credit card rewards as you shop. Ideally, you’ll use a card that rewards you for all your purchases.

If you find that sticking to a budget is harder than you thought, move to using only cash or your debit card. There is nothing better for a budget than looking in your wallet and seeing that you just can’t go over.    

Pro tip: Reduce impulse purchases online by keeping items in the store’s shopping cart for a day. If you’re unsure of a gift, sleep on it.

5. Avoid extra shipping costs

Due to the pandemic, even more shoppers are getting their gifts online instead of in-store. This means that more packages will be shipped, which may cause some delays.

Alliant’s Deposit Product Manager Sarah Hussain advises shopping early to avoid shipping fees. “In the past, consumers may have been able to order items online and still receive it in under 48 hours. Delivery times are expected to take longer this year so avoid expedited shipping costs and plan ahead.”

For stores that have don’t have free shipping, look for in-store pickup options. Overall, get your shopping done earlier than later. Deals can be found throughout the holiday season.

6. Find a “budget buddy”

You may be more likely to stick to your budget when you can celebrate your wins and share your struggles with someone. Find someone who can be a budget buddy. Your budget buddy can be a spouse, coworker or friend.

You’ll want someone who is also creating a budget for this season to save money and who will support you. As you make your budget and track your spending, check in with your buddy. Make budgeting fun by sharing that deal you’re super excited about or a tip you just learned.

7. Start planning for next year

As your spending this holiday season, it’s important to think about next year’s holiday budget. Make a note on your phone about what in your budget is working and is not working.

Then, set up a savings account specifically for holiday spending. “A separate savings account allows you to easily bucket your savings for each financial goal and track your progress. This way you’re not taking away from your future vacation fund and overspending on your holiday expenses,” said Hussain. A high-rate savings account with a great APY will help your money go further next year with added interest.

Finally, set up automatic recurring transfers to your savings. “Once you automate your savings, make a habit of reviewing your transactions weekly. You can start small and then increase the savings amount when you feel confident that you can set aside more,” said Hussain.


Katie Levene is a marketer fascinated with finance. Whether the topic is about the psychology of money, investment strategies or simply how to spend better, Katie enjoys diving in and sharing all the details with family, friends and Money Mentor readers. Money management needs to be simplified and Katie hopes she accomplishes that for our readers. The saying goes, "Knowledge is Power", and she hopes you feel empowered after reading Money Mentor.

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