15 Ways to Lower Your Holiday Spending

For many people, the holiday season is a time when careful financial planning flies out the window. It's all too easy to justify going into debt to make the season magical, but derailing your efforts at fiscal responsibility won't help anyone in the long term.

The last thing you want is to be sitting looking at a mountain of big bills in the new year, so to make sure you stay on budget, follow these 15 simple steps.

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Often, it's easy to get so caught up in the holiday spirit that you don't pay attention to how much you can actually afford to spend to make things merry.

You don't want to go wild purchasing gifts and decor without knowing if doing so could mess up your finances well into the new year -- so sit down and figure out exactly how much spare cash you have available to devote to seasonal purchases.

Once you've got your top-line number, break your holiday budget down in detail so you can easily see what's available to spend on gifts, decorations, food, and other extras.

Making a budget won't do you much good unless you stick to it -- and the only way you can tell if that's happening is to track your spending.

When you make a purchase for the holidays, add it to a spreadsheet, write it down, or use an app that tracks it. Keep tabs on how closely you're sticking to your budget and pull back on your spending if it seems you're starting to go overboard.

Santa shouldn't be the only one with a list this season -- you should also make a list of people you're purchasing for and what gifts you plan to buy.

By planning your shopping in advance, you can make sure you stick to your budget and avoid impulse purchases that could push you over the limit on spending.

Are there people on your list who you only buy gifts for out of obligation? Or loved ones who don't really need or want anything? There's no rule that says you have to buy a present for everyone in your circle of family and friends.

Of course, you don't want to just show up empty-handed and have a present waiting for you -- so have a talk in advance. You have a good excuse to question the present-exchange tradition this year due to COVID-19, so talk with your friends about whether it really makes sense to exchange gifts.

You may just find they're as happy to end the tradition as you are, and you could free up a lot of spare cash for other, more important purchases.

If you don't want to go cold turkey on gift exchanges with friends or family, suggest a Secret Santa instead of everyone giving and getting gifts from one another.

Having to surreptitiously buy only one gift for your assigned recipient instead of presents for everyone can make the gift exchange more fun while also saving you substantially .

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As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

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It's not just gifts that can be holiday budget busters. Throwing parties or meeting at restaurants to celebrate the season can also add up.

This year, large gatherings are a bad idea for more reasons than just the expense. It's a good time to start turning down invitations to things you don't really want to attend and simplifying the events you do.

If you decide you want to have safe, socially distanced in-person gatherings despite the pandemic, you can also save on costs by arranging for everyone to bring their own food and snacks. This is both safer due to COVID-19 and far less expensive for the host. (And Zoom parties are both safer and cheaper!)

Layaway is a good way to pay for holiday gifts over time without owing interest. It simply involves making payments for the cost of an item at the store and taking it home after it's paid for in full.

Layaway used to be much more popular than it is now, but many stores still offer these programs. It can make sense to use them if you've got plans to buy gifts that you can't afford to pay cash for all at once.

Being smart about which credit card you use to pay for purchases can also help you to cut your spending costs if you have a cash back card. Or, if you have another type of rewards card, you can at least earn extra points or miles for seasonal purchases.

To get the most bang for your buck, aim to use cards for purchases that will maximize the points or cash back you get. If you have a card that offers bonus rewards for dining, for example, get gift cards to restaurants to give those for whom you don't have a specific gift in mind.

Both online and in-store coupons can help you to cut costs and avoid going over budget for the holidays.

There are also websites you can sign up for and apps you can download that give you bonus cash back if you shop through their portals. It takes a few extra clicks, but if you can get more cash back on your purchases, you'll benefit from the added savings.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

Borrowing to buy presents or cover other holiday costs is only setting yourself up for hardship in the new year. Make a rule that if you cannot afford to buy something with cash, you aren't going to purchase it.

If you're concerned that will leave you with too little, consider looking into options for safe side gigs or doing some overtime so you can build up extra money to spend. You still have time before the holiday season kicks into high gear to pick up some extra cash.

ALSO READ: 3 Ways to Avoid Credit Card Debt This Holiday Season

If you're like most people, chances are you have some gift cards lying around your house that you were given but that you didn't spend.

If that's the case, consider regifting them to people on your list who would get better use out of them. You won't waste the gift card balance or have to buy a new gift if you do that -- and you'll get the clutter out of your purse or wallet.

There's no harm in looking at sales flyers to see what's on sale when you decide what to purchase for people in your life. You may just find a bargain on a gift that you think would be a great fit.

If you're running short of cash or simply don't like how commercialized the holidays have become, consider putting some sweat equity into preparing your gifts.

Baked goods and crafts are just a few of many homemade gifts you could offer to your loved ones. Think about where your special talents are and look into ways you can translate that into the perfect present for your loved ones.

If you don't have the talent to make gifts, you still have something else to give: your time.

Offering your services for loved ones this year as a gift instead of just another off-the-rack present could make the holiday season extra special. For example, you could offer baby-sitting or pet-sitting services for when your loved ones need it. Or promise your best friend who hates weeding the garden that you'll handle the fall cleanup.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

Celebrating the holidays shouldn't mean compromising your financial situation all year long. By following these 15 tips, you can hopefully keep costs down to a manageable level while still making the season a happy and memorable one.