5 Smart Money Hacks to Help You Budget for the Holidays

UPDATED: September 11, 2023
PUBLISHED: December 7, 2022
5 Smart Money Hacks to Help You Budget for the Holidays

With the economy making everyone extra cautious about spending, I really wanted to give myself the gift of not worrying about money this holiday season. But even with inflation going down, I knew I could be setting myself up for disappointment. How can anyone on a budget relax about money during the holidays? 

Of course, we can make attempts like embracing self-care. But even if I carve out some time to meditate, I know I won’t be focusing on the present but rather the debt I will accrue after buying holiday presents.

So, how can we enjoy the holidays without stressing about the inevitable dent they’ll leave in our savings? Here are a few hacks I’ve used over the years to help me both budget and enjoy the holidays. Consider it my gift to you, my fellow budgeters. 

1. Be honest.

I honestly love gift-shopping. But the stress of starting the new year already over budget detracts from the fun of finding items friends and family will love. So, before I start shopping, I come up with a realistic figure that I can spend on holiday presents. (Warning: You’ll need to be truly honest with yourself to pull this off.) Upon settling on an amount, I write it down (in ink) on a piece of paper. Somehow, once I have it in actual writing, the stress dissipates, because now I know what I can “really” spend.  

It’s true that, as the sole breadwinner for my family, I can sometimes budget only a very small amount for presents, and recognizing that fact can be hard. Still, having a fixed sum in my head that won’t put me over budget leaves me freer to enjoy what shopping I can do. Of course, there are times when I plow right through those meager earmarked funds and have to get inventive. One year, I even wrapped up some of my favorite books from my bookshelf to give. This might seem overly frugal, but each book was chosen with care—and in the end, far more meaningful than some gadget impulse bought on Cyber Monday.

2. Remember, it’s December.

Consider giving donations instead of physical presents. This is the last month in the calendar year you can donate to charities and deduct them from your taxes, so you can afford to be generous. Plus, donations are both great for your soul as well as your budget. They also double as a kind of mini gift to yourself when you file your tax return in April.  

There are many other deadlines in December that work well for thrifty gift-givers. Parents only have until Dec. 31 to add to a 529, so if you do have extra money in your budget, you can “gift” a student an extra bump in their college account. And if you’ve been putting money into your company’s flexible spending account, you can fill your holiday stockings with allergy meds and other items from Amazon’s FSA-approved store, since most accounts require you to use that cash by New Year’s Eve. For years, I put in for my FSA reimbursement to be paid out in December and used it like a “holiday bonus” to cover my extra expenses. Although you have until Tax Day to contribute to a Roth IRA (if you’re able to), this is the time of year that I usually reach out to my employer’s benefits department about increasing any contributions to company-sponsored retirement plans.  

3. Increase your income.

Start your spring-cleaning early and sell everything you don’t want to keep. Given the plethora of reselling platforms these days, you can always throw a micro yard sale from your computer. Those with artistic inclinations can also earn extra cash selling wares at holiday fairs or online. You can also consider taking on other end-of-year income-boosting jobs, since many businesses need extra holiday help. You don’t have to be a mall Santa, but you’d be surprised how much financial freedom a little extra holiday work can give you. Personally, I consider all extra cash earned (as well as credit card rewards points) to be “found money” and make a point of spending it on “happy” things like theater and concert tickets, which I wouldn’t otherwise indulge in due to my extremely tight budget. These experiences aren’t just free—they’re also guilt-free. Which in and of itself is a gift. 

4. Try a dollar diet.

I dislike the word diet, but it works well for this hack. Like many, I spend much of my holiday season socializing rather than in my default setting: curled up on the couch binge-streaming TV. So, it makes sense to take a pause from my streaming services. Of course, I do love holiday films—what’s December without Jimmy Stewart?—so I keep one. If you’re like most folks and have at least two streaming services, make a decision to pause all but one. You can always restart your subscriptions in the New Year. 

Another hack for all those shindigs you’ll be attending: Buy host gifts like wine or candles in bulk—wine shops and other stores often offer discounts for larger orders. So, plan one big shopping trip and save when you go to your many holiday soirees. 

5. Host the holiday party.

Initially, throwing a party might not seem like a cost-saving measure. But when you factor in travel costs, it sometimes makes sense to bring the bash to you. Even better, make it a potluck, BYOB event, so everyone saves on food and drink. And instead of giving pricey gifts, do a grab bag of smaller items (instead of the dreaded “secret Santa”). It’s a great way to celebrate with friends and family and one that won’t break the bank. It’s also a good reminder that the holidays are about spending time with people you love—not about spending cash you don’t have.

Photo by DGLimages/Shutterstock

Alison Lowenstein is the author of children’s books, guidebooks, and plays. She’s written for The Washington Post, Newsday, The Daily News, Huffington Post, Narratively, Lilith, McSweeney’s Internet Tendency, and many other publications and websites. You can find her at brooklynbaby.com and on Twitter @cityweekendsnyc