by Chelsea Springli 
The holiday season can be hard on our wallets. The cost of gifts, food, drink, travel, and decorating can pile up fast. According to the National Retail Federation, Americans spent over $1 trillion on holiday-related purchases in 2025. In light of the rising costs, many of us are likely to expect to spend more this year too. Nobody wants their holiday cheer brought down by stressing over money. With some clever holiday budgeting, you can take control of your holiday spending and focus on the joy of the season instead.
So, how do you save money during the holidays? Whether you’re starting a year out or setting your budget the month before, setting guidelines for yourself is the most helpful thing you can do. Here are some of the best holiday budgeting tips.
Make a List
It’s never too late to make a plan. Make a list or spreadsheet where you can outline all your gift recipients with an estimated budget per person. Next, add up your expected travel or hosting expenses. Finally, account for any other categories that apply to you, like decorations, gift wrapping materials, food, and anything else you’ll need to spend money on. Then total each section and you will get an estimate for how much you plan to spend this year.
If you have combined finances with a partner, make this list together. That way, no one is counted twice, expenses aren’t missing, and you have the same expectations for how much you’ll spend this year. When my husband and I made our list, we included each other, our parents, siblings, and a few close friends as gift recipients. For the travel and hosting section, we plan to stay local this year. However, we know we’re hosting a night at our home, and will be bringing dishes with us to three other occasions. We also put a lump sum in the other category for forgotten expenses and miscellaneous spending.
Check It Twice
If you feel dazed after seeing how much you plan to spend, it’s okay to reevaluate. Take another look at all the expenses you’ve listed and decide what you can cut. Decide whether there are some things you can cut or even wait to buy them on sale after the holidays are over.
When my husband and I looked at our planned expenses, we mutually agreed to cut back on our allowances for sibling and friend gifts. Then, we reduced our budget for the dishes to bring to other gatherings too. This allowed both of us to be more comfortable with how much we planned to spend.
Decide Where to Splurge and Where to Save
Once you’ve decided what your holiday budget will be, divide that amount up into different categories (like gifts, decor, and travel). You likely won’t have enough to cover absolutely everything you want to spend money on. So, you’ll have to decide which categories are most significant. Try giving yourself permission to pull from one category to supplement another. For example, maybe your friends decide to do a white elephant gift exchange instead of trading gifts individually. You could shift those savings toward the purchase of a more extravagant gift for your spouse. Maintaining your overall budget is key when going through this step.
Determine Needs vs. Wants
If you’re working with a tight budget, you’ll have to cut back in some areas. Making a list of needs and wants can help you decide where to allocate your funds. For example, if you classify gifts as ‘needs’ and new decorations as ‘wants,’ put most of your money in the gifts category and save a very small amount for new decor. And before you click “add to cart” on any decor piece, try to imagine exactly where the item will go in your home. If you can’t visualize a good spot for it, take it as a sign not to make the purchase.
Shop the Sales and Stick to Spending Limits
Planning ahead of time means you can shop for gifts while taking advantage of sales rather than paying full price for a gift a few days before Christmas. After you make your list of gift recipients (and a budget for each person), keep an eye out for sales. Some of your items may never be on sale. If you just remember to stick to your budget and set some time aside, you will reap the benefits.
Put It into Practice
It’s always easier to make the budget than to stick to it. If you have never used a holiday budget before, be mindful that you may not get it right the first time. Take lots of notes on your budget as you run into moments of overspending. By doing this, you can make more realistic estimates for next year. If you follow some of these simple holiday budgeting tips, you should have a successful and financial-stress-free holiday season!
