How to rein in your holiday spending

Walmart Christmas decorations
Christmas decorations fill shelves of a Walmart store in Houston earlier this month.
(David J. Phillip / Associated Press)

The holidays are a huge deal in the Weston household — and every year, the expenses threaten to gallop out of control.

Keeping the holiday joyous and less stressful means keeping a firm rein on our spending. Here’s what we do, as well as smart frugal tips from others.

Budget for every expense

By early November, I set up a spreadsheet with budgeted amounts for:

♦ Gifts, with names and how much we expect to spend on each person.


♦ Holiday tips, again with names and amounts.

♦ Travel expenses, including gas, hotel and meals.

♦ The tree, lights and other decorations.

♦ Food, drinks and treats for holiday gatherings.


♦ Holiday cards, postage and wrapping supplies.

Spreadsheets aren’t exactly warm, fuzzy and cinnamon-scented. But they allow us to see our total expected holiday spending and to make adjustments as necessary. (Adjustments are always necessary.)

We’ve used various ideas over the years to curb expenses, as our fortunes and the size of family gatherings have changed.

One year the adults drew names for gifts. We’ve also asked friends and more distant relatives to exchange cards instead of presents.

We set an overall budget for our daughter’s presents, then have her prioritize her wish list. Learning to prioritize is an important life skill, so this exercise does double parenting duty.

Check the ‘cushions’

Remember the days when you ransacked the couch cushions for loose change? There are better places to hunt for forgotten money. Some places to look:

♦ Your gift card stash. Pass them along, use them to buy presents or cash them in at sites such as Gift Card Granny or Raise.

♦ Credit card rewards. Rewards points can be used to buy gift cards and merchandise. We typically use our rewards for travel, but I sometimes turn points from little-used or orphaned accounts into gift cards.


♦ The coin jar. Some banks and credit unions will count change for free, or you can use the CoinStar machines found at many grocery and drugstores. We avoid CoinStar’s exchange fee by opting for electronic gift cards from Amazon, Starbucks and other retailers.

♦ The gift stash. Surely I’m not the only person to tuck away the perfect gift for someone, only to find it years later. Now I keep a bin in the closet to stash presents year-round. The bin also includes some all-purpose gifts (candles, scented soaps, fancy corkscrews) that can be used to thank a hostess or give to the friend who ignored the “no gifts this year” agreement.

♦ The heirlooms. Consider passing along a treasured object while you’re still around to enjoy the recipients’ pleasure. It could be something you inherited or that the other person admired: a piece of artwork or jewelry, a beloved toy, a musical instrument, a grandparent’s toolbox or baking supplies.

Take a hatchet to other expenses

Our holiday spending surge requires cutting other expenses to keep our budget in balance. Here’s how we save:

♦ Eat out less and plan meals that mostly use items from our pantry.

♦ Scour our recurring bills for possible savings, such as pausing subscriptions or canceling an unused gym membership.

♦ Look for cheap entertainment, such as free community concerts or baking cookies with friends.

We’re also changing how we make charitable donations given that the 2017 tax overhaul probably means we’ll no longer get a tax deduction.


Instead of rushing to make big year-end contributions, we’ve set up monthly payments to our favorite charities. That provides them with a steady source of income and avoids another big December dent in our budget.

Keep the budget updated

A budget should be a living document, regularly updated and adjusted. I log our spending every week or so and use apps such as Santa’s Bag or Christmas List that I can update on my phone.

This approach does more than keep us honest about our spending.

At the end of the season, I have a realistic idea of how much to save for next year. I divide that total by 12, and set up a monthly transfer to an online savings account labeled “Christmas.”

Having the money to pay for the holidays in cash every year may be the best gift of all.

Liz Weston is a certified financial planner and a personal finance columnist for NerdWallet.

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