Holiday Budgeting 101

The holiday season is a time for giving, enjoying good food and company, and making memories. However, it can also be a time of immense stress and financial strain. With all the extra expenses that come with the holidays, it’s easy to overspend and end up in debt. But it doesn’t have to be that way. With a little planning and discipline, you can stay on budget and enjoy the holidays without breaking the bank.

How much does the average person spend during the holidays?

It’s no surprise that the holidays are one of the most expensive times of the year. Between buying gifts, hosting parties, and travel expenses, it’s easy to let your spending get out of control.

According to the National Retail Federation, Americans plan to spend an average of $997 this year on holiday gifts, décor, and travel. That’s down 5% from pre-pandemic spending in 2019, but it’s still a significant chunk of change. With that said, you’re not alone if you’re worried about overspending this holiday season.

To help you get started, we’ve put together a comprehensive guide to holiday budgeting. We’ll cover everything from setting a budget to cutting costs on gifts and travel. So, whether you’re looking to save money this holiday season or just want to be more conscious of your spending, this guide will help you navigate this season mindfully.

How do I budget for the holiday season?

There are plenty of ways to save money during the holidays if you’re willing to be creative. Here are a few tips to help you stay on budget this holiday season:

Shop early to find deals

One of the best ways to keep your holiday spending under control is to start your shopping early. Starting your holiday shopping early will give you more time to find the perfect gift. That said, we’re not just talking about Black Friday and Cyber Monday, where big box companies intentionally jack up prices to make it seem like you’re getting a good deal. We’re more explicitly referring to starting your holiday shopping around mid-August or late September, when the end-of-the-season sales really take off. Not only will this help you avoid the last-minute rush (and associated stress), but you’ll also be more likely to find good deals on items.

Set holiday spending limits

Another way to keep your holiday spending in check is to set limits on what you’re willing to spend. Sit down with your significant other or family members and devise a realistic gift-giving budget. Once you have some numbers in mind, stick to them. It can be helpful to create a list of everyone you need to buy gifts for and allocate a specific amount of money to each person. This will help prevent overspending on any one person.

Give yourself a set amount to spend and pay in cash

If you’re worried about temptation, another option is to withdraw a set amount of cash you’re comfortable spending and use it to purchase all your gifts. This way, you’ll be less likely to impulse buy because you’ll physically see the money leaving your hands. At the end of the day, whatever money is left over can go back into savings.

Manage impulse buys

We all know how tempting it is to buy gifts on a whim. Whether it’s that expensive watch your husband will like or the $100 bottle of perfume your friend will adore, there may be other cost-effective and thoughtful spending alternatives.

While indulging in an occasional splurge is okay, try not to let impulse buying become the norm. To resist temptation, try waiting 24 hours before making any big purchases (this goes for non-holiday-related purchases too). If after 24 hours you still feel strongly about the purchase, go ahead, and buy it.

But more often than not, those initial impulses will have passed by that point. This will also help reduce the infamous “buyer’s remorse” that can often cause more stress than buying the gift was worth to begin with.

Always consider shipping costs

When shopping online, it’s easy to get swept up in deals and forget about shipping costs until it’s too late (i.e., when your credit card bill arrives). To avoid this, always factor in shipping costs when comparing prices between different retailers.

Sometimes, shopping at smaller brick-and-mortar stores may be cheaper as they offer free or discounted shipping options, as opposed to big box companies, which only provide discounts when you spend a considerable amount with them.

Recycle decorations

Finally, don’t forget about how expensive holiday decorations can be. Most of us have experienced the thrill of buying Target’s newest holiday collection of seasonal home décor items, but that doesn’t mean it’s sustainable.

If you’re looking for ways to cut holiday costs, consider recycling some of your older decorations instead of buying new ones every year. This is especially true for items like Christmas lights which tend to get pricier each year as technology advances. Not only will recycling decorations save you money, but it’ll also help reduce waste during this already wasteful time of year.

If recycling decorations isn’t really your thing, see if any of your friends or family members are willing to loan or trade decorations with you. That way, everyone gets new-to-them decorations without having to spend a ton of money.

Make sure your budget covers all holiday expenses & not just gifts

One of the most important things to consider when holiday budgeting is to know your categories. Regarding holiday spending, there are three primary categories most Americans fall into:

1. Gifts for family and friends

2. Non-gift holiday purchases like food and decorations

3. Non-gift purchases for ourselves and our families

As the National Retail Federation’s annual consumer spending survey states, the average person spends about $648 on gifts, $231 on non-gift holiday purchases, and $118 on other non-gift items. So, consider this before spending all of your funds in just one category.

Entertaining at home

Another expense to consider during the holidays is hosting gatherings. While it may seem like you won’t spend that much money having guests at your home instead of going out, the bills can still rack up fast.

If you’re hosting friends or family for a holiday meal or party, be sure to factor in the cost of food, drinks, decorations, and any other supplies you may need. To save money, try potluck-style meals where everyone brings a dish to share and decorate your home with items you already have or make DIY decorations.

Travel

If you’re planning on traveling during the holidays, be sure to factor in the cost of gas, airfare, lodging, rental cars, and any other travel-related expenses. To save money on travel costs, try carpooling with friends or family members who are also going to your destination.

You can also look for discounts on hotels and flights and take advantage of loyalty rewards programs if you frequently fly with one airline or occasionally stay in one hotel chain. With some planning, you can make sure your holiday travel is both enjoyable and affordable.

Gifts

Of course, one of the most significant expenses during the holidays is gifts. To stay on budget:

1. Try making a list of everyone you need to buy for and setting a spending limit for each person.

2. Once you have your list and limitations, research online or in stores to find the best deals or compare prices.

If all else fails and you don’t have the funds to go out and purchase everyone in your family something new, remember that it’s the thought that counts. A heartfelt and homemade card or sentimental item can often have more of an effect than something new in the box. Either way, your loved ones will appreciate any gift you give them, no matter how big or small.

Get creative with gift giving

Shopping for the perfect gift can be challenging, especially if you have a limited budget. But being thrifty or crafty doesn’t mean your presents must be boring.

In fact, some of the best gifts are unique and personal. So, if you’re looking for something different this holiday season, why not try shopping secondhand or making something homemade? Not only will you find special items at unbeatable prices, but you’ll also be supporting local businesses and helping the environment.

Crafts & homemade gifts

One of the best things about homemade gifts is that they come from the heart. It doesn’t have to be anything big or fancy – even a simple card or ornament can mean the world to someone when you make it. And if you’re crafty, there are endless possibilities! Here are a few ideas to get you started:

– knit or crochet a scarf, beanie, or blanket

– make a batch of your favorite cookies or candies

– bake a loaf of bread or a cake

– put together a photo album or scrapbook

– paint or draw a picture

– write a poem or song

– build something out of wood

– create a piece of jewelry

– make soap, candles, or bath bombs

The options are really endless, so use your imagination and get creative.

Repurposed & reused gifts

If you’re looking to save money this holiday season, why not give gifts you already have? We all have items around our homes that we never used or gently used for a period that we no longer need. So why not put them to good use? Here are some ideas:

– Give books: Giving books to someone who loves to read can be incredibly special and thoughtful.

– Give clothes: For the fashion enthusiasts in the family that love a vintage tee shirt or handmade skirt, clothes can be an affordable and sentimental option. Maybe you have something in your closet that’s collecting dust and would work better for someone else?

– Give games: For kids or adults who love to engage with their friends in a good board game, giving your gently used or unopened games to someone else can become an excellent gift for someone who will use it.

So, consider giving some of your high-quality and gently used items to friends and family if you are being more budget-conscious this season.

Thrifted & secondhand items

If you’re looking for unique gifts that won’t break the bank, look no further than your local thrift store or consignment shop. You’d be surprised at the gems you can find with just a little bit of digging.

Find everything from vintage clothes and collectibles to one-of-a-kind pieces of art and furniture. Not to mention, shopping secondhand is a great way to reduce waste and support local businesses.

We at Kaiyo understand that looking for the perfect holiday gift can be a daunting task. But your holiday gift searching just got easier when browsing our wide selection of gently used, high-quality furniture items at the most unbeatable prices.

Whether you’re shopping for a home décor lover or someone who just appreciates high-end or vintage pieces, we have something for everyone. Plus, our inventory is constantly changing, so you’re sure to find something new and exciting each time you visit us.

So, why spend hours fighting the crowds at the local big-box outlets when you can find everything you need from the comfort of your home? Visit our website today and take the hassle out of holiday shopping this year!