4 simple ways to keep your holiday spending in check


Even if you carefully budget for year-round expenses, holiday spending can set you back. From holiday decor to end-of-year tips to travel costs, it's easy to get carried away during the most wonderful — and what can also be the most expensive — time of the year.

Americans racked up more than $1,000 in holiday debt each, on average, at the end of 2018, according to MagnifyMoney's annual post-holiday debt survey. On top of that, 28% of shoppers went into the holiday season still paying off debt from 2017′s festivities.

And based on current estimates, holiday spending is expected to rise 3.8%-4.2% in 2019, according to the National Retail Federation.

Consider taking these steps to make sure that holiday spending doesn't send you spiraling into debt.

1. List out all of your holiday expenses

"Having a budget, in general, is so important when it comes to the holidays," says Kelly Smith, a personal finance and lifestyle YouTuber and blogger at "Not just having a regular budget, but having a budget for everything you'll be spending [on] during the season as well, whether that's groceries, gifts, travel, outfits, decor. [You're] using the budget for the entire season."

Smith recommends creating a holiday spreadsheet that lists all of your anticipated expenses. Jot down not only gifts and travel expenses, but also the smaller items you can end up spending a lot on, like holiday dinners, wrapping paper or decorations, tips for service providers, charitable donations, and more.

2. Adjust your budget to cover holiday costs

After you've laid out all your holiday expenses, figure out how much money you actually have to devote to each category. If you've already put a little extra aside, great. Smith, for example, says that her holiday budgeting begins as early as January, when she starts setting aside $100 each month for the coming holiday season.

"Start saving throughout the year and putting aside money every month, so that you can buy things as sales come, and when you see something that would be perfect for a certain person, you can get it right then and there," says Smith.

Start saving throughout the year and putting aside money every month, so that you can buy things as sales come.
Kelly Smith
Personal finance and lifestyle blogger

If you haven't been putting aside money for the holidays, Smith suggests giving yourself extra spending money by shifting your disposable income in other areas.

"Sit down and see how much money you do have," says Smith. "Say you want to spend $600 [on holiday expenses], but you only have $400 available to you. Say, 'OK, let's cut $100 from groceries and $100 from eating out. Now we can do it.'"

3. Take advantage of promotions and rewards

Once you've outlined your expenses and tallied how much you can afford to spend for each one, figure out ways to save. Tapping into rewards points or cash back you've stocked up over the year is one way to add some wiggle room to your holiday budget, Smith says.

"If you earn 2% cash back on all of your purchases throughout the year, come December you might have [an extra couple hundred] worth of cash back sitting in your credit card statement," says Smith. "That would be a great thing to use for your holiday shopping. And you can use your credit card rewards as an alternate savings account that you can't touch until the start of the season."

Consider signing up for coupon apps or browser extensions such as Retailmenot and Honey, which can help you stay up-to-date on special promotions at your favorite stores. And don't forget to dig through your inbox and take advantage of promotions from your favorite retailers before doing any shopping.

4. Treat your credit card like a debit card

The tendency to overspend and rack up debt during this time of year isn't uncommon, but it's best to try to avoid paying for last season's gifts through the new year. "I treat my credit card like a debit card and keep it at a zero balance," says Smith.

That can help you make sure you're not spending more than you can afford to.

There are creative ways to celebrate the season without going bankrupt, like hosting a gift exchange or only purchasing one gift per family, and Smith says it's important to be honest with your loved ones about your financial situation.

After all, when it comes to giving during the holidays, Smith says, appreciation for your loved ones isn't measured by how much you spend: "Remember that whatever you're spending during the holiday season, that value isn't tied to the value of the people you're spending that time with."

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