5 Ways to Slash Your Holiday Expenses

'Tis the season ... to spend a lot of money.

'Tis the season ... to spend a lot of money.

There's a lot to love about the holidays, but we probably all wish we could skip the hefty price tag that comes with them. Unless you plan to avoid holiday parties and gifting altogether, you'll probably have to spend some money. But with careful planning, you can minimize the blow to your wallet. Try these strategies to keep your costs low this year.

1. Do a gift exchange

My extended family is doing a gift exchange this year because it's getting too expensive and complicated to buy gifts for everyone as our group keeps growing. We each picked a name out of a hat so instead of having to buy individual gifts for 10 people, we now only have to buy for one. It's a lot simpler to shop this way, and much easier on our bank balances.

If you're considering doing a gift exchange with your family, it's best to plan well in advance -- before people start buying gifts for everyone. You should also agree on a price limit so that everyone gets gifts of roughly the same value.

2. Shop sales

Everyone knows about Black Friday and Cyber Monday, but those aren't the only times you can score good deals on holiday gifts. Start shopping well in advance and watch for sales or deals at the stores you commonly shop at. If you plan to purchase multiple items from a single website, try to do so all at once to minimize your shipping costs. 

People with credit cards that offer price protection may want to continue watching prices for a few weeks or months after they purchase their gifts. If an item later goes on sale and you can prove to your card issuer that it's now available for less than what you paid for it, the issuer will refund you the difference -- assuming you used that credit card to purchase the gift within the last few months.

3. Use coupons and credit card rewards

You can use coupons to score deals on holiday gifts, but you can also use them to cover more mundane things, like your holiday meals. Instead of throwing your newspaper into the recycling bin right away, look through it for coupons on food items you were going to buy anyway. 

You could also use credit card rewards, if you have any, to reduce your out-of-pocket costs on gifts or travel expenses. Redeem points for flights or hotels if you'll be traveling for the holidays, or for gift cards in your favorite stores to help you cover your costs.

4. Make homemade gifts

The truly ambitious among us might be able to reduce gift costs even further by making homemade gifts for friends and family members. I have a friend who's a graphic designer and she often uses her talents to create custom T-shirts and artwork for friends. She also gets business from people interested in creating custom gifts for their friends and family. 

Not everyone has the talent or the time to create homemade gifts like this, but it's an option worth exploring if you have a creative streak. You'll still have to pay for materials, but this will likely be cheaper than paying for a store-bought gift.

5. Have a potluck dinner

Gifts often get all the attention when it comes to holiday expenses, but food costs can add up too, especially if you're the one hosting dinner. You can save yourself some money and share some of the cooking burden with your family by agreeing to do a potluck dinner.

Like a gift exchange, a potluck dinner requires a little bit of advance planning. You'll have to decide what types of foods you want and who is making what. But this way, you only have to worry about making and paying for a single dish rather than several courses.

Think about which of the above tips might be a good fit for your family and try a few of them out this year. See which ones work for you and which ones don't. For the best results next year, start planning a few months in advance so that you have more time to check out sales, make homemade gifts, and budget for all the expenses the holiday season brings.