9 holiday budgeting tips to prepare for the season

The holiday season is filled with the excitement and joy of spending time with loved ones and, for many people, exchanging gifts. While it's often said that it's better to give than to receive, you may experience financial stress when trying to meet your family's and friends' expectations — especially if you haven't planned for the expenses of presents, gatherings and travel. Even if you have an established budget, emergency and surprise scenarios may mean unexpected expenses.

You can be ready to face the season with confidence with these nine holiday budgeting tips to help you spend and save smartly.

1. Set caps on your gift spending

No matter who you're shopping for, identify your limits upfront based on what's reasonable for your budget — and stick to them. It can be easy to overspend on gifts, particularly if you're picking up items here and there rather than buying all your presents in one go. Review your finances, set up a budget and leverage financial tools — such as Citizens Savings Tracker™¹, which helps you easily track and set goals to determine the total amount you can afford. Then, set an overall spending target for yourself that's less than that so you have some wiggle room.

As you're divvying up your gifting budget, you could set an equal spending maximum for everyone or cater it per person based on the closeness of your relationship. For example, you may want to spend more on a gift for an immediate family member than for a co-worker. Also, decide what's comfortable for your spending rather than basing your limits on someone else's wants or preferences.

2. Shop with a specific plan in mind

A tip that can help both your gift selection and your budget is to consider what to get the people on your holiday shopping list year-round rather than browsing at the last minute. That way, you won't waste time wandering around stores or online, you'll be less likely to impulse-buy the overly promoted items stores are trying to offload, and your gift may be more useful or thoughtful. Plus, if you know exactly what you're after, you can hunt for bargains.

3. Get creative with your celebrations

One way to tighten a budget is to make meaningful gifts and host holiday parties yourself. For example, you could use a free photo editing app to create a collage of memories and add it to an inexpensive but custom-decorated photo album for a unique present. Or if you're hosting this year's holiday party, you could skip the sit-down dinner and opt for an appetizer-based event, such as a painting party or game night. You can show your friends and family that they mean a lot to you in many creative ways while also reducing the financial burden of spending.

4. Book your travel when there are deals

Did you know that, generally speaking, Tuesdays and Wednesdays are the cheapest days to travel by plane, train or bus? Fridays and Sundays tend to be the most expensive. Rather than planning your travel when everyone else is traveling, consider adjusting your dates so you can maximize savings.

You can also score big by booking travel through discount sites, using travel-reward credit cards or shopping for tickets on well-known deal days, like Black Friday and Cyber Monday.

5. Take advantage of cash back

If you use your credit card responsibly for everyday expenses, you may want to consider a credit card that offers spending-based benefits. For example, some credit cards reward you with a certain percentage back on purchases, and you can use that cash back credit to offset your next purchases, such as holiday gifts. As long as you're covering your credit card expenses to avoid late fees and interest charges, credit card rewards can be an advantageous tool for your budgeting.

6. Dial back the holiday decorations

It's easy to get caught up with adding bigger, better decorations every year. While bargain shopping or creating your own are smart ways to save money, it's OK to focus on utility. Pull out decorations from the previous year and see if you can freshen them up to use again. Or, rather than investing in a glut of holiday-specific decorations, consider buying and repurposing items that can be used for other occasions or even year-round — like fragrant candles or color-changeable outdoor flood lights.

7. Think twice about the latest trends

Gifts don't need to be the shiniest new tech or the season's hottest looks. Instead, do some comparison shopping. Sometimes, the features that define it as an upgrade from the old version or style aren't crucial and may not be worth the added cost. Especially if the person you have in mind for the gift treasures functionality over trendiness, you could get a deal on something that's considered "newish" but still has long-lasting value to offer.

8. Remember post-holiday clearance sales

If the holiday purchases you need this year can wait until late December or early January because your gift exchange or gathering is delayed, you could shop the post-holiday sales to stretch your budget. Year-end clearances are also a great time to buy what you need for next year at a steep discount, like an artificial tree or a folding table and chairs for future holiday gatherings.

9. Budget and save all year for the next holiday

Once you're done with your holiday spending for the year, evaluate what you spent and how it impacted your budget. Doing a real-time assessment while it's fresh can give you a head start on planning your budget for next year. You may decide to cut back your spending a little or a lot, keep it the same or expand it. Take your ideal holiday-spending amount and split it across the next 10 or 11 months as a savings goal.

Tip: When you have budgeting tips at the ready for the holidays, you won't be taken by surprise or overcome by financial stress and guilt. Focus your holiday spending priorities on what really matters to you and your family and friends, and consider all the ways you can be creative and thrifty to tighten your budget a bit more.

Ready to tackle your financial goals?

Wherever you are in your financial journey, Citizens is here to help — with banking that stands with you and grows with you. With automatic transfers from your checking to your savings account, you can set money aside and watch your savings grow. Get a jump on your financial path by exploring our savings solutions.