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Holiday Budgeting

Budgeting for the Holidays

The holiday deals arrive much earlier than in years past. Major retailers like Amazon and Walmart offer holiday deals as early as mid-October. Shoppers don't have to wait for Black Friday deals and can get a much earlier head start on holiday shopping. Great deals may provide a little normalcy and joy during challenging times, but shoppers should be aware of emotional spending and do a little planning. 

Let Your Budget Determine Your Needs

  • A lot or a little, identify how much you have to spend. This is important before you start shopping. Make a “gift” list to help you prioritize what you need to buy and set limits on how much you will spend on each person. 
  • If your budget doesn’t stretch to cover everyone, that’s ok. Homemade cards and gifts are personal and have been shown to have more value than mass produced items.

Plan How to Shop

  • In addition to watching your wallet, safety can be a huge factor for many shoppers who are concerned about flu season or other diseases. Many stores have increased online shopping opportunities or provide curbside pickup. 
  • Plan where and when to do your shopping. Start early and do your research. Holiday sales and Black Friday flyers start much earlier. 
  • Be sure to update your apps, as many stores may offer discounts through apps, and discount or rebate sites can help you find great deals.  

Be Honest and Respectful of Family and Friends 

  • Whether this is flush year or a lean year, it may not be the same for those you love. Ask if you can change traditions to help each other out. Instead of buying gifts for everyone, create Secret Santa traditions, set spending limits, agree to make homemade gifts, make donations in each other’s names or pass down precious heirlooms. 
  • Have fun creating new traditions while reducing holiday stress for everyone. Find ways to make the gifts less about the amount, and more about the meaning.

Expect the Unexpected

  • Online shopping offers many benefits, but sometimes there are shortages or delays. Supply chain issues for "in demand products" may cause shipping delays or even availability of items. 
  • Try to go with the flow, plan as best you can and move to Plan B if that doesn’t work out.

Buy Local and Support Community Organizations

  • Shopping local can support jobs and benefit your community. Many local retail shops may offer curbside pick up or delivery, so you can avoid shipping costs and delays.  You also can find unique and customized gifts at local retailers . 
  • Consider celebrating the season by making donations to local charities or volunteering your time to support those in your community who are struggling this season.

Avoiding Holiday Debt

The spirit of the holidays can be full of joy, but it can also be full of stress and pressure. Avoiding overspending can make things easier and allow you to enjoy the season – and the months after. 

According to the National Retail Federation, consumers plan to spend on average $1,048 during the 2019 holiday season, a 4% increase from 2018 and up from an average of $783 in 2009. Approximately one-third of those using credit cards will still be paying them off in December of the following year. Making a plan to avoid overspending can make all the difference, saving you stress and anxiety this year and helping ease financial burdens as you start a new year.

What are some of the holiday overspending pitfalls? Knowing what to avoid can help avoid busting your budget.

  • Don’t try to keep up with the Joneses. Providing a bigger and better Christmas for your loved ones may be the dream, but keeping things within your means can be more fun and relaxing far beyond the holidays.
  • Avoid emotional shopping and holiday guilt. Token gifts and last-minute purchases are tempting, but often put you over your own limits. As well, roughly one-third of consumers plan to give to charity during the season. It’s important to know how much you have to give and when to stop.
  • Avoid last minute shopping. Stores are just waiting for last minute shoppers. It is easy to go overboard when you know you are facing a deadline.

Here are some tips for making a holiday spending plan to help you enjoy the holidays and avoid the financial hangover.

  • Track your holiday spending. Not just on gifts, but be sure to add wrapping, decorations, special food, travel and any other expenses.
  • Make a holiday budget. Once you know how much you regularly spend, you can set that money aside well in advance. Be careful to stick to it.
  • Have a holiday savings plan. This could mean putting money aside throughout the year or getting an extra job in the late fall to accommodate the extra spending.
  • Make a list for gift giving, including spending limits. Having a list ahead of time can also help you to locate holiday bargains. Finding gifts on sale well before the holiday season can make it easier to afford as well as save money and time.
  • Use cash, avoid credit cards. When you go to the store with a fixed amount you are more likely to stay within your plan. Credit cards are very tempting to well beyond what you intended to spend.
  • Shop online. You are more likely to find the discounts and comparison shop when looking through a screen. It’s harder to say no to a salesperson or an incentive when in the store.

Save some money for after season sales. Decorations, wrapping and more can be found at discounts of 50% or higher after Christmas. Buying at these greatly reduced prices, can save a lot of time and money for next year’s holidays.

Lastly, think of alternatives to traditional gift giving, parties and time spent with loved ones. Also consider those who may not have the means to give as much as others. Ideas like asking everyone to bring items for a family scrapbook can create new family traditions and memories for a lifetime.

We wish you a stress-free holiday season.


By Lauren Weatherford, WVU Extension Service Agent – Fayette & Nicholas Counties
Reviewed: October 2020

A person holds a shopping bag.