How to Budget for the Holidays: 5 Key Tips

Money SmartsDecember 12, 2023

Expenses can add up fast during the holiday season. In fact, according to a recent survey by the National Retail Federation, consumers plan to spend an average of $875 on food, decorations, gifts, and related holiday items this year.*

To make sure you don’t get in debt in the new year, consider following these five holiday budgeting tips.  

  1. Set a Spending Limit

Figure out how much you can realistically spend on everything and make a list. Then, break it down for each category, such as presents, decorations, food, holiday baking, and greeting cards. Assign a dollar amount for each group.

  1. Make a Budget for Each Person and Stick to It

For most people, gift-giving is the biggest category in their holiday budget, and it’s easy get off track. Before doing any holiday shopping, plan what you’re going to buy for each person on your list. Decide on a monetary limit for each person and stick to it.

If money is a bit tight this year, consider discussing your budget with family and friends. You can draw names and share gift-buying duties with others so you don’t spread your budget so thin. Buying gifts with others such as parents and siblings can also help your budget go further.

  1. Don’t Underestimate the Power of Homemade Gifts

Heartfelt gifts don’t have to be expensive. Your friends and family will enjoy a scarf you made in their favorite color, or the photo you framed from last summer. These gifts demonstrate the thought you put into creating something meaningful just for them.

  1. Organize Group Volunteering Events

When you add everything up that goes into hosting the perfect party, costs can get out of control fast. Even if you do a potluck, purchasing ingredients for holiday dishes can take a toll on your wallet.

This year, suggest a get-together that gives back. Meet your friends and volunteer for an organization such as Cool Ministries Food Bank, Habitat for Humanity, Bernie’s Book Bank or other local charities. These outings are fun and can make you feel good, too.

  1. Track Your Spending

Keeping track of what you’re spending as you go helps keep you within your budget. You won’t be as tempted to make impulse purchases, and you’ll feel more in control of your finances.

If you overspend this year, make a New Year’s resolution to get a fresh start in 2024 by opening up a GLCU Holiday Savings Account. It only takes $1 to open an account, and you can save money little by little all year long.

A Holiday Budget Is the Gift that Keeps on Giving

Remember: The holidays should be a joyous and happy time spent with family and friends. What people will remember is the time you enjoyed together, not the gifts you gave them. So, try not to feel pressured to overspend, and focus on what’s important. That way, you can welcome 2024 feeling merry and bright and not overwhelmed by debt.

*National Retail Federation, 2023 Holiday Spending to Reach Record Spending Levels, November 2, 2023.

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