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How to Manage Your Holiday Finances
November 16, 2023

How to Manage Your Holiday Finances


This article was recently published in CommunityAmerica's "Let's Talk Money" section of the Kansas City Star.


Although this may be the most joyous time of the year, it’s no secret these next few months also bring a major increase in spending. With all the gift buying, traveling, and party planning, it’s important to revisit your monthly budget to ensure you have a financial plan in place to cover these extra expenses.


Here are 3 key tips to manage your holiday spending this holiday season.

Set a Holiday Budget

To better understand the funds you have available for holiday spending, determine the total amount of income you have over the new few weeks, subtract any bills that are due in this timeframe, and make a list of any holiday-related purchases you know you have coming up to see if you’re on track.


In addition to determining how much you can afford to spend on gifts, also consider food, decorations, travel and other holiday expenses in your budget as these can add up quickly. If you’re traveling during the holidays, book your flights and accommodations early to get the best deals. Consider alternative travel options like carpooling or taking a train to save money. And remember to factor in a small amount for unanticipated expenses - even if it’s only $40 or so.


When it comes to purchasing gifts, here are a few budgeting tips:

  • Decide who you want to buy for and how much you want to spend on each person. This will give you direction for saving and shopping. Or you can take the reverse approach and give yourself a set budget from the get-go, then factor people into it. Say you decide you want to spend $1,500 total on gifts, and you want to designate $100 of that to coworkers. If you have 10 coworkers, then the limit is $10 each.
  • Consider limiting gift giving. Limiting your gift list to close family and friends can help your budget during the holiday season. If you typically buy for extended family members or groups of friends, don’t be afraid to have the tough conversation of pausing or simplifying the gift giving this year. The odds are that these people will completely understand and are wanting to cut back as well.
  • Use group giving to cut back on gifts. Suggest group giving with siblings for parents or grandparents or use a gift exchange such as Secret Santa with a group of friends or co-workers.

  • Shop Smart

    Many retailers offer significant discounts during the holiday season. Black Friday, Small Business Saturday, and Cyber Monday are great days to make the most out of sales and your holiday shopping budget.


    If you plan to shop in-person, one method many people find effective is to use cash when shopping. That will ensure you stick to your budget, rather than charging purchases to your credit or debit card. And remember to save your receipts for what you buy.


    Even on mega sale days, not everything is a good deal — or even a deal at all. It is likely that items will be repositioned in the store with the same regular price advertised in a bigger, flashier way to persuade shoppers. Research ahead of time to ensure you are getting a deal. Also, consider researching other retailers online to compare prices.


    If you are an online shopper, you may be familiar with the cart trick. Many online retail stores are looking for you to close on your purchases. Sometimes if you place a desired item in your shopping cart but don’t complete the purchase, you may receive an email offering you a discount. If you can wait a few days on your purchase, it could be worth the effort. If your gift is a popular item and you have it in your cart on Amazon, you will receive an email notifying you if that gift becomes the “Deal of the Day” at any point throughout the season.


    Use Credit Wisely

    If you’re using a credit card to make holiday purchases, be mindful of your spending. It’s easy to rack up a large balance that you’ll have to pay off eventually. Try to pay it off in full each month to avoid interest charges.

    When to consider using your credit card this holiday season:
  • You have a payment plan. Let’s say you know you want to spend $500 this month on gifts, but do not have that in cash now. If you know that in the term of your billing cycle, you will be able to save and make a full payment on your card — since you are not spending $500 on gifts next month — that would be an appropriate time to consider charging your purchases.
  • You have a good rewards program. When you can pay in full right away, the benefit of choosing your credit card over your debit card can come down to the extras. Unless you have a cashback checking account, you are likely to get more travel points, cash back, or perks from using your credit card. Plus, check with your card provider to see if there is a holiday deal on earning even more.
  • You plan on traveling. Often times there are better security and insurance policies attached to your credit card than your debit card. Check with your card provider for the exact parameters of your card’s insurance. Most credit cards come equipped with some form of insurance or security — enough to give you peace of mind making transactions in unfamiliar places.

  • When to avoid using your credit card:
  • You don’t have any foreseeable plan to pay it back. Credit cards are not free money, but sometimes they feel that way. If you do not have the money now and have no idea how you may get it in the immediate future, it is not wise to put it on credit. Between late fees and interest charges, you will end up owing even more in the long run.
  • You’ve used 30% of your credit limit. One good rule of thumb to maintain good credit – you should not have more than 30 percent of your limit borrowed at one time. It is not an exact number, because your credit score is based on much more than just balances but assigning a number to stay within that 30 percent limit can be just the motivation spenders need to stick to their budget.

    Get a jump start on the holiday season for next year by opening a Holiday Savings account. This account helps you put money away all year so you can get a jump on the gift-giving season. And then on November 1, the money you’ve saved is automatically deposited into the savings or checking account of your choice.


    The holiday season doesn’t have to be a financial burden. With a little planning and discipline, you can enjoy the festivities without worrying about your finances. CommunityAmerica’s Financial Well-Being Coaches offer free expert guidance on budgeting, improving your credit score and managing debt. Start your customized holiday financial plan with a Well-Being Coach to help you achieve financial peace of mind.

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    About the Author
    Ryan Steitz
    Ryan Steitz

    Financial Well-Being Coach

    As a Financial Well-Being Coach, Ryan understands the positive impact of financial literacy, which is why he thoroughly enjoys helping members set and achieve their life financial goals.