Still Paying for Your Holiday Spending? Here’s How to Do Better.

The holidays are the most wonderful time of the year. It’s a time for celebrating with friends and family. We travel, share meals, and exchange gifts. These are times to enjoy the company of others.

Our holiday spirit can quickly fade when the bills come due, however. The average American family spends >more than $1,000 on travel, gifts, and goodies. Those outlays mean many start the new year in the red.

It doesn’t have to be that way. When it comes to affording the holidays, a little planning can go a long way. Here’s what experts have to say about finding room in your budget for the most expensive time of the year.

1. Budget ahead for the holidays.

Given the expense that the holidays represent, you’d think we’d plan carefully to afford our celebrations.

But you’d be wrong. In fact, three-quarters of Americans report not budgeting at all for their end-of-year festivities. No wonder we come out of the holidays with thousand-dollar debts.

The best way to avoid costly spending sprees in December is to start thinking about them in January. Start by figuring out how much you’ll need to set aside. Be realistic: It’s better to surprise yourself by coming in under budget than to pay more than the fanciful total you imagined you’d spend.

Once you’ve developed a strategy to afford your holidays, stick with your plan. It helps to stay accountable using an app like Mint or tools offered by commercial banks.

2. Spread your costs out throughout the year.

Quick question: Is it easier for you to spend $1,200 in one lump sum or in 12 installments of $100?

Given that almost half of Americans don’t have money in the bank to cover an emergency $400 expense, it’s hard to see how they’d pay three times that amount all at once without going into debt. But $100 a month? That’s realistic — about what we spend monthly on coffee.

To see what you need to set aside from your earnings, take your budgeted expenses for the holidays and divide them by 12 (or by however many regular pay periods you like). Put those funds in a savings account, and don’t use them except for holiday expenses.

Make a little more one month? Getting behind another month? Experts say it’s OK to vary the monthly contribution, as long as you keep an eye on the big picture.

3. Buy gifts and make travel reservations at strategic times.

Ever notice how everything goes on sale after the holidays? Or how the price of that flight to Jamaica you’d been watching went up $400 from the last time you checked?

Retailers, airlines, and hotels operate on predictable pricing cycles. That means there are better and worse times to get presents and make travel reservations for the holidays.

To get the most bang for your buck, consider shopping during peak deal-finding seasons. Keep in mind that the calendar for sales tends to stay relatively constant:

  • Fitness memberships, electronics, and winter clothing go on sale after Christmas — just in time for New Year’s resolutions and the Super Bowl.
  • May and November are good times to consider electronics and appliance purchases. Furniture buys should happen May through October.
  • Booking travel? Do it between four months and four weeks ahead of your departure for the best prices.

4. Take advantage of rewards, incentives, and promotions.

As you buy gifts and make holiday plans, don’t forget to look for special rewards you may already be accruing. If you’ve got an airline credit card, for example, keep track of your Frequent Flyer miles; you might be eligible for a free flight.

Many companies offer reward points or incentives for buying at a certain time. There are often BOGOs and deep discounts available if you pay close attention.

Keeping an eye out for these special deals can help reduce your holiday costs. Those savings might make space for more gifts, higher travel expenses, or bankable savings.

5. Set up automatic ways to save.

Using an online debit card like the one Chime offers through Visa can be a great way to save up for the holidays. There are no hidden fees, and you can manage it entirely from its app platform (including for mobile payments like Apple Pay and Google Pay).

Best of all, you can save as you pay for everyday expenses using Chime’s Round Up feature. Every time you spend, Chime rounds up to the nearest dollar and places the difference in a savings account. That means the $1.85 for your coffee or $29.11 filling up the tank deposits $0.15 and $0.89, respectively. Over time, that change adds up, meaning your pockets will be full by the time the holidays come.

6. Make unwanted gifts work for you.

We all get some gifts we love and some that…well, it’s the thought that counts, right? Look for gift receipts, make your returns, and recycle those gifts (if you can find someone who will enjoy them). You’ll be ahead of the game for next year’s holiday season.

As long as we’re celebrating the holidays, it’s going to cost us. But by implementing some simple budgeting techniques, the most wonderful time of the year doesn’t have to be the least wonderful time of year for our bank accounts. Advance planning, strategic purchasing, and promotional gaming can all make the holidays what they should be: enjoyable and affordable.

Brad Anderson

Brad Anderson

Editor In Chief at ReadWrite

Brad is the editor overseeing contributed content at He previously worked as an editor at PayPal and Crunchbase. You can reach him at brad at

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