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Phoenix Forward

How to celebrate the holidays on a budget

Budgeting tips for the holidays

It’s that time of year again when it’s easy to get swept up in retailers’ unceasing festive cheer — and alluring prices. Suddenly, your innocent shopping trip turns into an all-out gift-spending spree, and you’ve forgotten that you planned on celebrating Christmas on a budget this year.

“It is important to understand how much you can afford to spend during the holidays,” says Art Elliott, area chair for accounting and financial planning programs at the University of Phoenix St. Louis Campus.

Elliott suggests the following money-saving ideas:


Set a budget ahead of time.

Avoid out-of-control purchasing by developing a detailed budget — before you shop, warns Elliott, a corporate controller for Peterson Enterprises in St. Louis. “List each individual who you will purchase gifts for and the amount that you can afford to spend on them,” he says.

Then stick to the list by tracking your expenses throughout the shopping season.


Never pay full price.

It’s easy to feel you’ll miss out on the best gifts for loved ones if you factor in the prices, but that thinking also leads to impulse spending. “Look for sales,” Elliott emphasizes. You can increase your savings with online discount codes or, if you’re shopping at brick-and-mortar shops, by asking retailers if they offer free gift-wrapping for presents.


Limit credit card spending.

If you really want to keep your finances in check, consider leaving the plastic at home. If that’s not possible, Elliott suggests using a credit card with a low interest rate and making a plan to promptly pay off debt.


Simplify holiday parties.

“Don’t forget to calculate the food, wine and other costs of hosting or attending get-togethers that go along with gift giving,” Elliott warns. If you’re used to doing a lot of expensive entertaining, consider some new holiday traditions, such as potluck dinners and cookie exchanges.

In addition, you may want to avoid the expensive invitations — which require stamps, too — and just send out digital invites.


Organize gift exchanges.

Don’t buy a present for every relative, co-worker and friend, Elliott suggests, recommending white elephant exchanges and secret Santas instead.


Get crafty.

You can really reduce holiday costs by making homemade decorations that also serve as gifts, Elliott says. Gifts from the heart, such as homemade blankets, knit hats, house-made pickles and jarred cookie dough mix can cost less and feel more personal since they require time and effort.


Buy after Christmas.

If you aren’t exchanging gifts with loved ones until after the holidays, consider shopping the post-Christmas sales. “The gift pickings may be slimmer,” Elliott says, “but retailers will be looking to unload excess inventory at steep discounts.”

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