Published in: Credit Cards | Dec. 7, 2019

6 Tips for Holiday Shopping on a Tight Budget

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Is your holiday budget pretty small? Follow these tips to make it stretch as far as possible. 

The holiday season is an expensive time of year and, ideally you've been saving up for it so you can avoid holiday debt

Unfortunately, far too many people find they have too little saved when the festive season arrives. If this sounds like you and you're stuck with a small budget, here are some ways to do your shopping without breaking the bank. 

A woman in a festive sweater wrapping gifts.

Image source: Getty Images

1. Limit who you're buying for

If your gift list has gotten out of control in recent years, it's time to pare it down. Chances are good that many people in your life don't really need more stuff and may also feel they're buying for too many friends and family members. 

Go through your shopping list to see who's on there because you genuinely want to give them something and who only made it out of habit. Then, broach the idea of not exchanging gifts this year. 

To make sure the conversation goes as smoothly as possible, be clear that your feelings for the recipient have nothing to do with your proposal to end gift-giving. Explain that you'd rather spend the season making memories with them than struggling to find the perfect present. 

2. Suggest a get-together instead of a gift exchange

Even when you have the best of intentions, it can feel uncomfortable to tell your loved ones you don't want to buy them a gift. So propose that you schedule a get-together to enjoy each other's company rather than exchange presents.

This can work especially well if you have a bunch of family members or friends who all know each other and all exchange gifts. Send out a group email or text and suggest everyone spend their money on a shared meal at someone's house or an inexpensive holiday show instead of presents for everyone. 

One special event will cost a lot less than buying tons of gifts -- and hopefully everyone will be happy to enjoy time together without worrying about what to buy.

3. Establish some spending limits with your loved ones

Talk to the people you still plan to exchange gifts with and agree a spending limit. You can let them know your budget is tight or that you feel like spending has crept up each year and you want to put the kibosh on it. 

If you both agree to limit what you spend, you won't feel pressured to buy something you can't really afford just to give a comparable gift. 

4. Get creative with homemade gifts or gifts of time

If you can come up with gifts that cost you little to no money, you'll be able to stretch your budget even further. You can do this by engaging your creativity or by giving the gift of yourself rather than something material. 

Consider making a coupon book containing a homemade meal, free babysitting or dog sitting, or other gifts of time you can provide that you know your loved ones will appreciate. Or make gifts they'll love, such as paintings, a knitted blanket, gourmet cookies, or whatever other foods or crafts you're great at creating. 

5. Cash in credit card rewards or maximize the rewards you're earning

If you have a rewards credit card with points you can cash in for gift cards or merchandise, consider saving up your rewards and using them for holiday purchases. This could enable you to do some or all of your shopping without actually spending any cash out-of-pocket. 

If you don't have any rewards to spend, you can still stretch your budget by doing your shopping with a credit card that earns you cash back or points. Your holiday spending rewards could really add up if you choose a card that offers bonus rewards for the type of gifts you're buying the most. You can cash them in to save on future trips or get a statement credit that reduces the post-holiday bills.  

6. Shop around for the best bargains

Shopping around for good deals can also help make your limited funds last. Be on the lookout for deals throughout the season and keep a running list of people you need gifts for. Any time you see a great bargain on something, check your list and see who might appreciate receiving it as a present. 

You don't have to blow your budget over the holiday season

While it's tempting to get into the holiday spirit and start spending to make the season magical, there's no reason to blow your budget. You don't want to start next year with a new financial struggle to overcome. Instead, follow as many of these tips as possible so you can keep costs down while still enjoying the festive season. 

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