7 Ways to Save Money This Holiday Season Without Losing the Festive Spirit
Image by Erin McKenna on Unsplash
As the holidays approach, many of us feel the familiar mix of excitement and financial stress.
Between inflation, credit card interest rates, and the pressure to make the season magical, it can feel like our wallets are being pulled in every direction.
Bankrate recently reported that one in three shoppers plans to cut back on spending this year, and it’s easy to see why. But the good news is, with some smart strategies and a little creativity, you can keep the holidays festive without breaking the bank.
Here are seven tried-and-true ways to save money while making this holiday season truly special for your family.
#1: Set a Holiday Budget and Stick to It
If I’ve learned anything from being a parent, it’s that budgeting is the backbone of family sanity.
This applies especially during the holidays, where everything from gifts to decorations can add up faster than your kids spotting an Elf on the Shelf.
According to Bankrate, only 29% of people set aside money specifically for the holidays. Don’t be like the other 71%.
Sit down with a cup of coffee (or whatever keeps you going), figure out what you can afford to spend, and make a plan. Allocate funds for gifts, food, and other festive expenses, and make sure you’ve set limits. Treat it like a holiday shopping survival guide.
Start a “Holiday Fund” as early as possible by saving a small amount from each paycheck.
Use a high-yield savings account or CD Ladder for extra interest. This makes holiday spending feel like a planned activity rather than an emergency expense.
Another idea to consider is to create a visual budget tracker to keep everyone on the same page.
You can use a whiteboard, a notebook, or a spreadsheet, and list each expense category.
Make it a family project—let the kids help color in the sections as the budget is met. It can turn a mundane task into something more engaging, plus it keeps everyone accountable.
A final thought…talk openly about budgeting with your children. Let them know how much things cost and why it's important to save. You’ll be teaching lifelong financial skills, and it might even lead to fewer requests for every shiny toy they see in the store.
#2: Shorten Your Gift List
Let’s face it—gift-giving has gotten a bit out of control.
You don’t need to buy a present for every co-worker, second cousin, or random acquaintance who once babysat your cat. Instead, focus on meaningful gifts for close family and friends.
Secret Santa exchanges are great for reducing your gift load while keeping the tradition alive. When it comes to family, set expectations early—no one needs the pressure of buying for the entire clan.
My wife and I usually set a limit on how much we can spend on each other. Typically it’s around $20, which makes it much harder (and more fun). It started out of necessity in college and we just kept it going since.
#3: Shop Early for Discounts
Remember how department stores used to wait until after Halloween to start putting up Christmas decorations?
Well, those days are long gone, and honestly, I’ve embraced it.
Almost half of shoppers start their holiday buying before Halloween, which means early bird deals are real. Shopping early helps spread out costs, keeps stress levels lower, and ensures you aren’t scrambling to grab something last minute.
Something I’d recommend is signing up for newsletters from your favorite stores and paying attention to flash sales. You can even set up alerts on deal sites like Honey or CamelCamelCamel to know when prices drop.
If you can plan ahead, August and September are surprisingly good months to find discounted holiday items as you can take advantage of those “back to school” discounts. After all, who said holiday shopping doesn’t include supplies for crafting or other DIY activities?
As a fun family idea, you could turn early holiday shopping into a scavenger hunt for deals. Take the kids with you and make it a challenge to find the best bargain on each item.
Not only does this help you stick to your budget, but it also teaches them the value of smart shopping. Plus, kids love a good challenge.
#4: Use Credit Cards Wisely for Rewards
Bankrate noted that many shoppers plan to use debit cards for holiday purchases, but there’s a smarter way to maximize your spending—use credit cards responsibly to rack up rewards.
The key is to use your credit card for everything and then pay off the balance in full each month.
This way, you avoid interest charges and still earn those valuable cashback, points, or miles.
Use a rewards card for all your holiday purchases, but treat it like a debit card. Only spend what you know you can pay off immediately to avoid interest charges. This way, you’re earning rewards without the risk of debt.
If you have older kids or teenagers, consider giving them a prepaid card for their holiday shopping. It’s a great way to teach them budgeting while giving them some independence in picking out gifts for family and friends.
#5: Prioritize Affordable Experiences Over Expensive Gifts
Think back to your own childhood—chances are, you remember the traditions more than the toys.
Holiday memories are made from experiences, not price tags.
Instead of focusing solely on buying gifts, create holiday traditions that cost little to nothing.
Many shoppers are stressed about the season’s costs, but there’s something liberating about shifting the focus away from gifts and towards experiences.
Nothing beats a good ole’ fashioned holiday movie marathon weekend. Make popcorn, drink hot chocolate, and watch all the classics: Elf, Home Alone Die Hard (it counts right?).
These experiences don’t just save money, they create memories that last far longer than any toy.
A few other affordable ideas include taking a drive to see neighborhood holiday lights, baking and decorating cookies as a family, or building a gingerbread house together.
Each of these activities can become a beloved family tradition. The best part? They don’t come with a hefty price tag.
Another idea is to volunteer as a family. Many communities have holiday events where you can help out, such as wrapping gifts for charity or serving at a holiday dinner for those in need.
It’s a fantastic way to teach your kids the value of giving back, and it can become a heartwarming part of your holiday routine.
#6: Avoid Taking on Holiday Debt
Debt may seem like a quick fix, but it always lingers longer than the wrapping paper crumpled up on the living room floor.
Bankrate’s survey shows that 27% of shoppers are planning to take on debt for holiday spending.
Trust me, it’s not worth it. The thrill of the holiday doesn’t compare to the anxiety of a bloated credit card bill come January.
Instead, get creative with your gifts—think DIY or using loyalty points to lower costs.
Here are three ideas:
Rewards Points: If you use a rewards credit card all year, use points to buy some of the gifts. It’s a win-win—no out-of-pocket cost, but the gifts are still top-notch. Just make sure you don’t overspend to earn those points in the first place.
DIY Gift Ideas: Homemade gifts can be some of the most cherished ones. If you’re crafty, consider making personalized ornaments, homemade candles, or baked goods. Not only are these gifts thoughtful, but they’re also budget-friendly and show that you put in extra effort.
Debt-Free Gift Alternatives: Try giving the gift of your time. Offer a coupon book with things like “one free night of babysitting” or “a home-cooked meal.” For grandparents, create a photo album with pictures of the kids throughout the year. These gifts are low-cost but high in sentimental value.
#7: Layer Discounts for Maximum Savings
Stack as many discounts as possible - combine rewards from credit cards, store promotions, and cashback websites to maximize savings.
Yes, it takes a little extra effort, but the payoff is real.
For example, if you’re shopping online (who isn’t?), use a cashback site like Rakuten, add a rewards credit card, and make sure you’re hitting a store sale.
You’re essentially stacking three discounts for one purchase—it’s the ultimate money-saving trifecta.
There are tons of apps that can help with stacking discounts. Apps like Honey will automatically apply discount codes at checkout. Combine these with your credit card rewards, and you’re golden.
P.S. Keep an eye on flash sales and stackable coupons. Many retailers offer stackable discounts during Black Friday or Cyber Monday.
Make a list of what you want and strike during these sales to get the most bang for your buck.
A Final Thought About Saving During the Holiday Season
The holidays don’t have to be synonymous with financial stress. It’s about family, love, and the little moments that make the season bright.
By planning early, cutting back on what doesn’t matter, and focusing on what does, you can make this holiday season both memorable and manageable.
Remember, your kids won’t remember how much you spent—they’ll remember the time you spent together.
