The Holidays Are Almost Here: 7 Ways to Save Money Without Ruining Christmas

by Lyle Daly | Updated July 17, 2021 - First published on Dec. 10, 2018

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Woman in santa hat pursing her lips as she carries shopping bags.

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Trying to avoid a mountain of debt as we head into a new year? These expert tips are just what you need to save money.

The holidays may be called the most wonderful time of the year, but it's not so wonderful to check your credit card bill once January rolls around. All those presents, trips, and events can prove costly, and when Americans add debt over the holidays, the average amount is a whopping $1,054.

One solution is to unleash your inner Grinch and go on a total spending freeze. If you're looking for something a little less drastic, here's how you can save money while still having a great time this holiday season.

1. Figure out your budget

Yes, you probably knew this one was coming. To keep your spending in line during the holidays, you need to decide how much you can spend.

Besides gifts, many consumers will also need to pay for travel, family activities, and parties, so it's important to make a detailed budget that covers all your upcoming expenses. If you know that you're a big spender when December rolls around, you may even want to set up a savings account in advance specifically for this time of year. You can get your holiday fund started early, and you'll know exactly what you can afford.

2. Do your gift shopping early

It's a lot easier to shop for deals and make smart decisions about what you buy when you aren't scrambling for presents at the last minute. By doing your gift shopping at least a few weeks in advance, you can also take advantage of the selection and prices available online without paying extra for expedited shipping. It sure beats going to the mall on Dec. 23.

3. Set up a gift exchange

If you have a large family, lots of friends, or both, you could spend lots of money trying to find the right gifts for everyone. Fortunately, there's a simple way to alleviate this issue -- a gift exchange.

Instead of getting a dozen gifts, you and everyone you invite can get just one. Another similar option is a Secret Santa arrangement.

4. Use your holiday expenses for a credit card sign-up bonus

This one may come as a surprise if you've heard any of the traditional advice about paying with cash during the holidays to steer clear of debt. I'm all about avoiding debt, but I also think you should take advantage of easy moneymaking opportunities.

Look at it like this -- you're going to be spending money this holiday season, and probably more than usual. It makes sense to get one of the credit cards with the best sign-up bonuses first and put your purchases on that card, as one bonus can be worth hundreds of dollars.

5. Keep track of all your spending

Putting together a budget is only half the battle. For that budget to help you spend less, you need to track where your money's going. Otherwise, you could start with the best intentions, just to find that you went way over your supposed limit.

There are about a million ways you can do this, so it all depends on your personal preference. If you use Excel all the time, you can put together a spreadsheet. If you want to go the modern route, you can install a budgeting app on your smartphone.

6. Redeem points to pay for travel and experiences

If you've been using a travel rewards card, the holidays are the perfect time to redeem those points. Try to book as early as possible, as it gets tougher to find award airfare and hotel stays on short notice.

By the way, don't think that you're limited to only using your card's points on travel bookings. Many of the biggest rewards programs also let you use your points to book experiences and activities, including:

7. Don't get suckered by the sales

Even though it's natural to look twice when you see signs advertising big discounts, resist the temptation to buy something solely because it seems like a good deal.

Those discounts often aren't as steep as they appear, since retailers may raise prices beforehand specifically for the purpose of slashing them later. And if you're only buying something because it's on sale, then you're not saving money, you're spending extra. When in doubt, stick to your shopping list and your budget.

No one gets out of the holidays unscathed financially, but you can at least keep your spending to a reasonable amount. By implementing the tips above, you could realistically cut your expenses in half and start the new year without any new debt.

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