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How to plan your holiday budget

Learn how to create a holiday budget that covers gifts, travel, and parties without going into debt. BBB shares step-by-step tips to plan spending, track expenses, and save money.

Back to BBB's holiday shopping tips page

Supply chain problems, shipping delays, and inflation can make it even tougher to create and stick to a budget during the holidays.

       

What you'll learn:

  • How to create a holiday budget that avoids overspending
  • Tips for tracking expenses and planning for rising costs
  • Ways to save money with deals, rewards, and creative gifting

Planning ahead and knowing your spending limits are more important than ever.  

How can you build a holiday budget that will cover buying for everyone on your list while keeping you out of debt? BBB recommends the following steps for calculating your seasonal budget and sticking to it.

Holiday budgeting FAQ: How to plan spending and avoid debt

A beautifully decorated Christmas tree placed on a white calculator and with a miniature book. Christmas concept celebrated on December 25 every year.

Planning your holiday budget

How can I create a holiday budget that keeps me out of debt?

  • Start by reviewing your income, subtracting essential monthly expenses like rent, utilities, groceries, and debt payments. Decide how much you can realistically spend on gifts, travel, parties, and other holiday costs, and set a clear spending limit.

How should I account for debt when budgeting for the holidays?

  • Review any outstanding debts, especially high-interest debt. If you can’t pay it off before the holidays, reduce spending and focus on low-cost or free ways to celebrate. Prioritizing debt repayment first helps you avoid adding financial stress.

How do I plan for rising prices and inflation?

  • Inflation can increase the cost of gifts, groceries, gas, and other holiday essentials. Compare prices before buying, adjust your budget where necessary, and consider scaling back gift-giving to stay on track.
Middle aged woman buying online Christmas presents from her cozy home late at night. Woman using PC computer for online Christmas shopping.

Gifts and spending

What's the best way to organize gift-giving within a budget?

  • Create a detailed gift list with every recipient, set a price range for each, and brainstorm ideas in advance. This helps prevent impulse purchases and ensures you stay within your overall budget.

How can I track my holiday spending effectively?

  • Use a budgeting app, spreadsheet, or notebook to monitor purchases. Knowing exactly how much you’ve spent keeps you accountable and helps prevent overspending.

How can I save money while shopping for gifts?

  • Take advantage of Black Friday, Small Business Saturday, and Cyber Monday deals, plus loyalty points or cash-back programs. Compare prices, look for free shipping, and bundle purchases where possible.

      

Are there additional tips to manage holiday expenses?

  • Start saving early to reduce financial strain
  • Set aside funds for unexpected expenses or last-minute gifts
  • Plan for travel costs, including transportation, hotels and meals
  • Avoid panic buying - shortages don't justify overspending
  • Consider alternative gifts, like handmande items, acts of service, or family gift exchange

For more information

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More holiday shopping tips

BBB has tips to help you make smart shopping decisions during the entire holiday season.

Read BBB's holiday shopping tips
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