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How to Create a Holiday Budget Without Breaking the Bank

With the holidays approaching, the pressure is on – time to get all your holiday shopping done while staying on budget!

With only weeks to go, tensions and emotions may be running high. Inflation is spiking, and consumers have been warned for weeks that shipping issues will result in fewer items on the shelf.

According to, the average American shopper will spend $998 on gifts and other holiday expenses. If you have a large family or like to throw holiday parties, you could possibly double or triple that number. A NerdWallet survey revealed that travel expenses can add an additional $1,500 to your holiday budget.

With four in 10 shoppers willing to go into debt over the holidays, survive this busy season without breaking the bank by trying these financial planning tips.

Prepare a Holiday Budget

Prior to beginning your shopping, determine how much can you reasonably afford to spend.

  1. Start by subtracting your “must pay” expenses from your income and see what is left over.
  2. Once you know “your number,” make a list.
  3. Break down your list into categories, such as:
    • How much can you spend on:
    • Decorations
    • Party Supplies and Food
    • Holiday cards
    • Gifts
    • Travel expenses

Stick to Your Budget and Save Your Receipts

If you go over in one category, be prepared to reduce your spending in another. If you can’t stretch the budget enough to cover everything, consider the following:

  • Participating in a Secret Santa —This is a tradition in which members of a group are randomly assigned a person to whom they give a gift instead of giving an individual gift to everyone. This works well with work friends, book clubs and extended family.
  • Hosting “potluck” parties —With each guest bringing their favorite dish, you don’t have to buy and cook everything.

Bring In Extra Cash by Taking on a Seasonal Job

With the economy recovering from the pandemic, jobs are plentiful, and employers are fighting with each other to secure workers. It isn’t unheard of to get an offer at the conclusion of an interview, and some companies are offering signing bonuses and special payments if you stay through the end of the season.

Already have a full-time job and just want to work nights or weekends? No problem – flexible schedules are now the norm. You may even be able to get a position at a large retailer where you can get an employee discount on all your purchases!

Avoid Credit Card Debt

Do your best to avoid taking on credit card debt to get through the holidays. Starting the New Year with a balance on your credit card racking up interest at a rate of 20% or more can be a setback.

Also, be wary of Buy Now Pay Later plans. They are exploding in popularity and are expected to account for 6% of online retail purchases by the end of 2021. These plans are enticing because they often entail a 0% interest rate, but it is easy to lose track of the payments owed and the due dates.

Save Now For the 2022 Holiday Season

Years ago, people set up “Christmas Club Accounts” at their local bank and made weekly deposits throughout the year so they would have money available when the holidays arrived. Although these accounts are no longer as popular, you can accomplish the same thing by setting up a sub-account where you hold your high yield savings account. Saving roughly $83 per month in 2022 is a lot easier than trying to scramble together $1,000 at the holidays.

The process of examining income and expenses is an important first step to manage your money—especially during the holiday season. Working with a CFP® professional can help you better budget your money, by analyzing how you spend your income and where you might be able to cut back. For more budgeting ideas and financial tips, check out

Get started on securing your financial future today
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