7 Tips for Holiday Budgeting and Spending

Check out these ideas to help keep your holiday budget on track


’Tis almost the season! But if you’re feeling cautious about holiday spending, you’re not alone. 

A recent McKinsey & Company survey showed many Americans are planning to spend even less this year. So if you’re hoping to scale back a bit this season, a little planning before you’re in the thick of holiday shopping may help. 

1. Start Planning Early

Ready to strategize your holiday spending? Consider looking at upcoming expenses before the season ramps up:

  1. First, figure out how much you’ll need for your regular monthly expenses. 
  2. Next, add up what you expect to spend over the holidays. Try to be as realistic as possible. For example, include the cost of decorations, gifts, cards and postage. And don’t forget about groceries you might need for a special holiday meal. 
  3. Then, consider how much you have available to spend. This can include income or any savings you’ve set aside for the holidays. 

Once you subtract your monthly and estimated holiday expenses from your available funds, you’ll have a better idea of how much you can spend. Think of this as your budgeting moment of truth—and the first step toward knowing exactly what you can afford. 

2. Take Inventory

Another simple way to stay within your budget is by taking stock of what you already have. Older decorations you may have forgotten. Unopened packages you meant to gift—or regift—in years past. If they’re useful this year, you can take them off your list of expenses. You might be surprised at what’s hiding in storage spaces like closets, the attic or the basement.

3. Make a List

Here’s a popular tip: Decide early on how many people to put on your gift list. It may sound simple, but sticking to a list can be challenging when the excitement of holiday sales take hold. Once you’ve made your gift list, you can go through each name and jot down ideas that fit in your budget.

After you have your list, be sure to check it twice! In fact, checking it multiple times can help you stay on track. Remember to give your list a quick review before you shop. This will help you tie every purchase back to someone on your list. Committing to crossing off each name as you buy can help you save and stay on budget. 

4. Set Your Spending Rules

Hoping to get through the holidays without overspending? You could benefit from a list of personal rules to guide your spending.

One way to avoid overspending is to bring only the amount of money you plan to spend. 

You could also consider using your credit card instead. Using your credit card can keep you from having to carry large amounts of cash. And as the Consumer Financial Protection Bureau points out, using your credit card for a purchase “can give you more consumer rights if the item is broken when you open the box.” 

If you do decide to use your credit card, just be sure to have a plan to pay your credit card bill.

5. Track Your Spending

Consider tracking what you regularly spend to get a sense of your personal rules in action. 

Set up a budget that includes separate columns for both estimated costs and the actual amount spent. Taking the time to record what you’ve budgeted versus what you’ve spent can help you keep track of when you might need to cut back on spending. 

And with online shopping becoming even more popular, don’t forget to keep an eye out for fraudulent charges. If you’re a Capital One cardholder, Eno monitors your account around the clock, reaches out if something unusual is spotted—like potential fraud—and helps you fix it. 

6. Consider Gift Cards

Another option: Give unused gift cards you already have as gifts. Or use them to purchase presents. 

And if you have a Capital One credit card that earns rewards, you can redeem your rewards to buy gift cards. You can check your rewards balance each time you log on to the Capital One Mobile app.

7. Create Low- or No-Cost Gifts

The holidays don’t have to strain your finances. Flex your creative muscles! This could be the year you set a few new holiday traditions with experiences that don’t cost a thing. Like a walk with friends to take in Christmas lights (don’t forget a thermos of hot chocolate). Or instead of gifts, consider giving things like personalized playlists or customized, online recipe books. 

You can also consider low-cost options. For example, give cards with personalized messages instead of gifts. Bake and deliver treats to people on your gift list. Or set up a gift-exchange system where each person in your family buys for just one person. 

Time to Start Shopping

It can be easy to overspend in the hubbub of the holiday season. Tips like these may help you, though. There are also online tools that can help you save. At the end of the day, even small things can bring joy and holiday cheer to your family and friends. 


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