How to Spend Smart This Holiday Season (So You Have Cash to Ring in 2020)


It’s the most wonderful time of the year… and the most expensive. No matter how carefully you’ve crafted your budget or tracked your spending, holiday gift-giving tends to blow even the best financial-planning efforts out of the water. It is possible to make it through the season without overdrafting your bank account, though, if you have the right game plan. Here’s our best advice on crossing everyone off your list, and keeping some cash for the new year: 

Establish ground rules 

Before a single gift is bought, you need to create a total budget for the holiday season that includes all expenses: from big-ticket items like presents to that roll or two of paper you’ll use to wrap them. Personal finance experts say one week’s post-tax income is a good benchmark to use as your total holiday budget. (For someone who makes $50,000, that would be about $700-800.) A majority of that budget will be dedicated to gifts, so create a list of recipients and divvy up your spending among each person, keeping about 20% for miscellaneous holiday costs. To keep yourself accountable, be transparent with family and friends about spending limits to set expectations. You may find out that for your grandmother, just making an effort to visit her is enough, or that all your sister really wants is a charitable donation made in her name. Ultimately, sticking to this plan will keep you on track financially, and make it less likely you’ll be guilted into buying something for your landlord’s dog.

Pay attention to extra charges 

Shipping, “convenience” fees, taxes -- they add up fast, and can easily go unnoticed until they’ve eaten up a big chunk of your budget. During the planning process, make sure these extras are factored into your spending. If you’ve budgeted $50 for your best friend and then find the perfect gift for $48, the taxes are gonna push you over. (Not that you shouldn’t buy it, but you’ll have to make up for that cost elsewhere.) Do your best to avoid fees entirely: shop locally in-person if possible, and if shipping is unavoidable, be sure to buy early enough to avoid express delivery fees. Also, if you need to mail a gift, speak to the retailer directly or adjust the shipping address when you check out online -- doing so will save you on postage (and a trip to the post office).


Make big-batch DIY gifts 

Do-it-yourself gifts are a tried and true method for those on a budget, since you’re the one donating the labor costs. Besides having more sentimental value AND being truly one-of-a-kind, homemade gifts can save you big bucks, especially if you can buy supplies in bulk to make several gifts. That’s especially true for kitchen concoctions like infused liquor (or liquor-infused treats), which are easy enough for the less-crafty to tackle. Pouring your own scented candles is a relatively simple and inexpensive process that’ll bring the recipient cozy vibes all winter long, too. If those still sound too ambitious, just create a custom basket with your recipient’s favorite snacks, coffee, and other simple, store-bought foods. It’s more personalized than a ready-made gift basket, and cheaper, too.

Advertiser Content From

Courtesy of Venmo

The holidays can wreak havoc on your budget, no matter how well you try to plan. But, with the new Venmo Mastercard, you can spend smart and stretch your dollar further this season. This debit card lets you use your Venmo balance to shop at Sephora, grab a coffee at Dunkin’, or fuel your car at Chevron and earn cashback on each purchase -- cash you can use for that holiday happy hour… or the shoes you’ve been eyeing since Black Friday. Plus, the Venmo card makes it easy to split purchases, track your spending, and relive all your holiday festivities by sharing in your feed -- features that truly make the season bright. 

Tally your spending after every shopping trip 

Keeping a close eye on your spending is key to staying on budget, as psychologists say we tend to self-justify while shopping, e.g., it’s easy to rationalize overspending for special occasions. So, do a check-in with your accounts after each shopping trip, and keep a close eye on any overdraft fees or credit card debt -- those are big red flags that you’re overspending. Budgeting apps and even mobile banking can alert you to unexpected fees just like social media call out a new “like” on your photo, so make sure you’re opted in to notifications. Tracking expenses frequently will also help you recognize problematic behaviors, like if you tend to always overspend at a specific store, or if you’re going over budget on a certain individual.

Don’t go overboard on decking the halls 

The average American plans to spend $227 on holiday decorations, food, and other non-gift items this year, and while trimming the tree is sure to get you in the holiday spirit, there are ways to cut down on this cost. Go for a minimalist Christmas theme or scour sites that cater specifically to decorators on a budget (like Save-on-Crafts) for ideas on how to be festive, frugally. For the biggest savings, check Craigslist or Goodwill right after the new year to pick up artificial trees, string lights, and more for cheap -- and sometimes even free.


Beware of sham sales 

The holidays can be prime time for retail sneakery, with studies showing that some stores have been known to artificially increase prices before annual sales to make some deals appear more attractive. In fact, research shows that retailers sometimes offer larger discounts later on in the season. Price check everything to see it can be found cheaper on the retailer’s website than in store (in this case, buy online and pick up in-store is your friend) and in the case of third-party brands, to compare the price history across multiple retailers. Trackers like CamelCamelCamel can monitor price history of items on Amazon, while sites like IFTTT can help you set up custom alerts for when a retailer drops its prices. When it’s finally time to check out, look for last-minute coupon codes with sites and apps like Retail Me Not or Honey to scoop up even more deals.

Stay strong and don’t shop for yourself 

More than half of shoppers admit to buying things for themselves while shopping for others -- and it’s a major budget buster. One tip: shop alone. A well-meaning friend is likely to tell you “you would look great in this!” or encourage you to treat yourself. Another important prep step is to create a shopping list before you step foot in the store (or go online). Haphazard browsing is a great way to zone out and end up with four new kitchen gadgets in your cart that you don’t need. Lastly, use this time of year to unsubscribe from promotional emails that are cluttering your inbox -- you won’t be tempted to spend if you don’t know a sale is going on.

Give your gift exchange a twist

Buying something for every person in your group of friends or family gets expensive fast, so a gift exchange gives everyone a break financially. Secret Santas and Yankee Swaps are classics, but this year add a few twists to keep things interesting. Give your exchange a theme (e.g., everyone must bring a baked good, or gifts must be sports-related) to encourage unique and personalized gifts that won’t end up regifted next year. Other options include playing “musical gifts” -- like musical chairs, but with gifts; forcing people in a Yankee Swap to win a game of Rock, Paper, Scissors before they can steal a gift; or answering trivia questions to determine your order for the exchange.

Gift experiences that won’t cost you upfront

Offering to gift someone an experience can be much more meaningful than any object, and bonus: you probably won’t need to pay for it right away. So instead of picking up a knick-knack for your grandma, offer to take a cooking class with her in January or February. Spending quality time together will be more memorable in the long run, and it’ll give your bank account a few weeks to recover from holiday splurging. If they deserve something big, gifting a flight or a weekend getaway can delay your spending and give you time to track prices for the best rates -- just make sure you’re saving up before you click “buy.”

Each Venmo Rewards Offer Powered by DOSH is available for a limited time only at participating merchants on qualifying purchases (as stated in the particular offer and subject to the full program terms). By participating, you agree that DOSH may create a wallet for you on its system in order for you to earn and redeem Venmo Rewards. Any Venmo Rewards that you earn will be transferred to your Venmo account. All offers made available to you may become unavailable without notice. Additional terms and exclusions apply. See full Venmo Rewards Powered by Dosh Terms of Service and Privacy Policy here.

The Venmo Mastercard is issued by The Bancorp Bank pursuant to license by Mastercard International Incorporated. The Bancorp Bank; Member FDIC. Card may be used everywhere Mastercard is accepted in the U.S. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

All trademarks and brand names belong to their respective owners. Use of these trademarks and brand names do not represent endorsement by or association with this card program. All rights reserved. 

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s).