How To Avoid Overspending This Holiday Season

How To Avoid Overspending This Holiday Season

The holidays are a time of indulgence, but that doesn't mean that your finances have to pay the price. If you start planning early, you will have more time to enjoy the things that really matter to you.

Check out our guide to avoid holiday spending and get ready to save money, time, and stress.

Get Started Early

One of the best ways to avoid overspending this holiday season is to start early. For many, having the entire year to save and shop can lessen the financial blow of the holiday season. For instance, start stocking up on everything from gifts to shelf-stable baking ingredients as early in the year as possible.

Members of the ChooseFI Facebook group provided some great insight on avoiding overspending during the holidays. Member Ray H said:

“Instead of doing all my holiday shopping in December, I do it all through the year, taking advantage of sales, coupons, and other deals as much as I can. I find I spend less and get more for my money if I can shop when I am not under holiday deadline stress. By the time Halloween rolls around, I'm usually done with all my holiday shopping except a few last-minute items and any fresh foods with a limited shelf life.”

If it's too late in the season to take advantage of this tip this year, keep it in mind as the new year rolls around.

Create A Budget

Knowing how much money you have to spend is a crucial first step in planning for the holidays. After doing the math and setting a spending limit, it is time to sit down and create a budget. Your budget should include not only gifts, but food, travel, decor, and even new clothing for holiday parties. Incorporate your early holiday spending into your monthly budget to make it a priority.

Here's an example, using a $1,200 spending limit.

ExpensesBudgeted Amount

Make A Plan

No matter how many people you are buying for, creating a gift plan will help eliminate added stress. If you have ever been to a crowded mall on Christmas Eve searching for the perfect gift, you know how difficult last-minute shopping can be.

Save yourself the stress and make a plan before you head to the stores. Take the time to create a list, including what you plan to buy, where you are going to buy it, and how much it will cost you. You can even plan out where you are going to park.

The more specific and detailed your plan, the easier your gift shopping will be.

Alternative Gifts

Gina R from the ChooseFI Facebook follows her family's own set of rules when it comes to the holidays. She commented:

“My entire family has restrictions on gift-giving. It must be either homemade, repurposed, or an experience. This keeps the cost down while eliminating landfill waste. It also keeps us all out of the stores that try to make you feel like you should spend more to show your love.”

Gifts don't always have to be expensive, store-bought items. More and more families are seeking alternatives to gift-giving, with some opting out of giving gifts at all.

No Gifts

While the idea of forgoing gifts may make you sound stingy, it is one of the easiest ways to save money during the holidays. Even better, this gift-giving alternative can completely eliminate the stress of not knowing if your gift will be well-received.

This no-gift alternative is often popular with families who do not have young kids. However, it can easily be implemented by a family that has everything that they want and need. Not giving gifts can leave more room for spending quality time with your loved ones to focus on what the holiday truly means for your family.


Many families are choosing to skip traditional gifts altogether and travel for the holidays instead. This gift is a great opportunity to bond with those you love while making memories that will last a lifetime.

Traveling is not always easy on the wallet. But with a little planning, your family could be jetting off on their next great adventure in no time. Using travel rewards credit cards, you can rack up rewards points throughout the year to help pay for flights and hotel accommodations.

Chase Sapphire Preferred Card is our top pick when it comes to travel rewards cards. After being approved, Chase offers a sign-up bonus of 60,000 Ultimate Rewards points for users who spend $4,000 in the first three months of the account opening. These points can be used to book travel through Chase's booking portal, transferred to one of their travel partners, or even used to pay for exclusive events picked just for you.

Chase Sapphire Preferred Card cardholders will earn 2x points on travel and dining at restaurants, plus one point per dollar on all other purchases. This card has a low annual fee of $95.00.

Check out our full review of the Chase Sapphire Preferred Card here.


Holiday games are a great way to give small gifts and simultaneously make memories with your guests. Instead of buying personalized gifts for everyone attending the party, each guest brings one gift purchased with a preset spending limit. These gifts are then exchanged, following the rules of one of many different games. Here's a list of gift exchange games.

DIY Gifts

DIY gifts are some of the most personal and customizable gifts that you can give. From food to hand-knit socks, DIY gifts are a great opportunity to give your loved ones something homemade. You can even source some of the materials from your own home!

Whether your entire family decides to join you in a DIY gift pact, or you do it alone, handcrafting your gifts can save you some serious cash this holiday season.

Let Your Credit Cards Pay For You

Credit cards, when used correctly, can help offset the cost of the holiday season. If you have been watching your cash back collect, consider using it to pay down the balance on your credit cards during the holidays.

Tyler H from our ChooseFI Facebook community has the right idea, saying:

“We use our 2% cash-back credit card money primarily for Christmas gifts. This usually covers everything with some extra to spare.”

Check out ChooseFI favorite cash back cards.

Related: How To Pay For Christmas Using Credit Card Rewards

Local Events

Taking part in community events can make for a fun holiday season without breaking the bank. If you haven't looked into your town's holiday events lately, now might be the time.

Many towns host festive light parades, craft fairs, and community dinners. You might even find opportunities for your little ones to meet Santa Claus. Usually, these events are cheap, if not free, and provide a great way to get your family involved in the community.

If you would like to take it the extra mile, why not consider volunteering? Everyone could use an extra pair of hands around the holidays. This is a also great time to teach children how to give back.

Related: How To Find Free Things To Do In Your City


After gifts, food is one of the most exciting parts of the holidays. People like to break out the favorite family recipes and spend the evening filling their homes with the scents of baked goods. While the kitchen is exactly where some want to be during the holidays, remember that you don't have to overdo it.

Keep It Simple

Simplicity is key when deciding not to overspend during the holidays. While leftovers are a beloved part of the holidays for many, don't feel pressured to make food in excess. Simple dishes made with love make some of the best meals and remind your family why they enjoy gathering around your table.


If you are hosting a large gathering for your holiday dinner, why not consider a potluck? Potlucks take a lot of the stress off of hosting, opening up time to spend with family while saving money.

When planning your potluck, make sure to keep a running list of what everyone is bringing. You want to make sure that everyone brings something different so you don't end up with a table full of desserts and no side dishes.

Consider making the main course yourself, saving your guests from figuring out how to transport a large dish to your home. The best way to make sure that everyone participates is to ensure that your potluck is easy on your guests.


Decorating for the holidays is a great way to keep the holiday spirit alive inside of your home. If you only shop for your holiday decorations at the end of the year, you are missing out on some great deals. But post-holiday clearance sales are a great way to save on decorations for the next year.

If you are low on decorations, why not check out thrift shops and yard sales? They are amazing resources for decorations for almost every holiday. Sometimes you can find unique pieces your guests will adore.

Final Thoughts

Holidays have a funny way of creeping up on all of us, but they don't have to leave your wallet in distress. The holidays should be about what is important to you and the ones you love. If you can eliminate the stress of overspending by making a plan, you free up more time to celebrate what means the most to you.

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How To Avoid Overspending This Holiday Season

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ChooseFI seeks to uncover helpful services that help you be financially resilient. However, we may receive compensation, at no cost to you, from the issuers of some products mentioned in this article, including from CardRatings for our coverage of credit card products. Opinions are the author’s alone, and this content has not been provided by, reviewed, approved or endorsed by any of these entities. See our disclosures for more info.

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