Holiday shopping? Learn the art of the list

Your guide to gifts on a budget.


Christmas shopping on a budget this year? Smart. Trying to keep Hanukkah gifts in check? Understandable. Do the 7 days of Kwanzaa have you stressed? Been there. When it comes to sticking to a savings plan, nothing beats a good list. It’s a simple strategy that helps you show your appreciation and love to your family and friends throughout the season while you keep some cash in the bank for yourself. Here’s how it’s done.

Create a budget

First, settle on a gift budget that you can feel good about. If you already have a monthly budget, great. You probably just need to know how to save on one. Skip to the next section for that. If you don’t have a budget, here’s how to start using this important money-saving tool that holds you accountable for every cent that goes in and out of your wallet.

  1. Gather pay stubs, bills, credit card statements and receipts.1 Split everything from the past year into 3 categories. Income is money earned. An expense is money spent. Subtract expenses from income to get the third category. This “leftover” money often serves people best in a savings account or retirement account.

  2. Crunch the numbers. Create a monthly budget by dividing your yearly income by 12. Then divide your expenses by 12. Subtract your monthly expenses from monthly income to get an idea of how much you could put into your savings each month.

  3. Categorize your budget. Finally, break your monthly expenses down into 2 categories: “needs” and “wants.” Needs are bills that repeat on a regular basis, like rent or groceries. Wants are things you could do without if you had to, like eating out or going on vacation. Cut down on wants to make more money for savings.

If you need a little help, the Federal Trade Commission suggests using this worksheet to create a budget, which you can then use to help create a gift budget plan below.

Save for your budget

Now for the fun stuff—building your list and budgeting for November and December celebrations. Ideally, your budget will come directly by cutting your “wants” instead of dipping into your savings. Say you spend $225 eating out, $50 on movies and $5 every weekday on sodas and snacks. That’s $375 a month right there.

Cutting those expenses just in November and December puts $750 in your holiday budget. Now imagine how much you could stash in your savings each year if you just go without a few of your “wants” every month—cutting out sodas and snacks alone means $1,200 saved in just one year.

Draw up your budget

You’re probably not going to be able to get every person their perfect gift, but with some careful planning, you can get pretty close. First, break your gift budget down by name. Then take your list to the next level for extra savings.

Create 3 categories: dream gift, reasonable gift and adequate gift. Jot down ideas for each category for every person. Maybe Dad wants a new putter ($200), needs new sunglasses ($100) but would be happy with some nice gloves ($50). Having these different price points for each person ahead of time will help your budget be more flexible.

Next, use a point system2 to estimate how much to spend on each person.

  • Assign everyone on your list a number based on how much you’d like to spend on them, 5 being the most and 1 being the least.

  • Add these numbers up and divide your total gift budget by that number. Say your total was 30. In our example, $750 is our budget, so 750/30=25.

  • You now know that one “point” is worth $25. Since your spouse has 5 “points,” their gift budget is $125 ($25 x 5), a close friend’s is $75 ($25 x 3) and your babysitter’s is $25 ($25 x 1).

Now that you have a preliminary gift budget plus some ideas at different price points for each person, see how everything lines up. If you see some people aren’t going to get the gift you really want to give them with this budget, try moving some numbers around. For instance, if you lower each of your close friends’ budgets by $25 and get them their adequate gift, can you afford your spouse’s dream gift? This should give you a good holiday budget foundation, but if you really want to up your gift list game, you can create a budget spreadsheet like this one on Microsoft Excel.

Ring in the new year

These budget tips should help you out this year. But what about next year? Well, there are a few things you can do to start planning ahead for the celebrations to come.

  • Use an interactive budget calculator to help you see how much you need to save each day to reach your goals for next year.

  • Cut down on splurging just a tiny bit each month and put those savings into your bank account. Eat out a little less and cook a little more. Start a book club instead of going to the movies. A tiny bit of savings goes a long way!

  • Consider using an automatic savings plan that stashes away some money at regular intervals that you set. This way, you don’t have to worry about forgetting to save.

With this type of budgeting in place, you'll hardly think of next year as being on a budget, but rather as holiday shopping (and saving) made easy.


This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

  1. FTC. (n.d.). Making a Budget. Retrieved on November 29, 2021 from: https://www.consumer.gov/articles/1002-making-budget#!what-to-know

  2. Scott, L. (2018, August 14). How to Create a Christmas Budget in 6 Easy Steps. Retrieved on August 15, 2018, from: https://lifeandabudget.com/christmas-budget/

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