Americans will spend $900 this holiday season—Avoid the hefty price tag.
Published on November 13, 2024
•4 min read
The holidays are expensive—and this year will be record-breaking.
According to the National Retail Federation, holiday spending on gifts, food, decorations, and other seasonal expenses will reach $902 per person. This is $25 more per person compared to 2023, and $16 higher than the record high from 2019.
Of the $902, the NRF predicts $620 will be spent on just gifts.
But what if these numbers don’t make sense for your holiday budget? We have a few helpful strategies to avoid spending more this season.
Create a Holiday Budget
Building and sticking to a strict holiday budget will help you avoid overspending.
Start with a number that you find reasonable. Let’s say you can’t afford more than $400 on gifts. Once you land on a number, break down all the people you need gifts for.
Make sure to include any additional events you have on your schedule like a work secret Santa or a gift grab with friends.
Do your best to allocate the money toward each person or event. If you have one event, dedicate $15-$20 toward that gift. This leaves $380-$385 left that you can divide up as you see fit.
Let’s say you have five people you need presents for, that’s a little over $75 each split evenly. If you would rather spend more on the kids, subtract from the spending on someone else if that makes more sense.
These scenarios need to make sense for your situation and can be adjusted as you go. Make sure what isn’t adjusted (or changing too much) is the spending limit you’ve set.
Start Saving Now
If you haven’t started saving for holiday expenses, it’s not too late!
Determine how much you can put away weekly to build toward a reasonable holiday spending goal. Saving weekly may be easier than biweekly, even though that’s when most people get paid, because you can break down the savings into smaller chunks.
If you start today, and save $65 a week, you will have about $400 allocated a week ahead of Christmas, Kwanza, and Hanukkah.
Avoid Added Debts
If you cannot afford to swipe your debit card, it doesn’t always mean swiping your credit card is the next option.
Using credit cards during the holidays to earn points and rewards is smart, but it’s also important to have a plan to pay them off quickly.
The issue with credit cards is that you don’t see the immediate impact on your bank account, so it’s easy to forget that the card balance is going up. Additionally, other financial needs may pop up and direct your attention away from the credit card balance, which means interest starts piling up.
Shoppers should also be aware of in-store credit cards and the incentives they say they offer. As we jump into the holiday season, you will start to notice a push from retailers to sign up for their store cards.
These offers sound great, 10-20% off your order if you apply. Sometimes you don’t even have to get approved to receive the discount on your order, but applying is not free for your credit score.
When you apply for a store card, they will run a hard check on your credit, which means your credit score takes a hit. If you sign up and cancel, that can have a temporary impact on your overall score too. Even more dangerous, you might sign up and use the card beyond your means and have more debt to then pay down.
If prioritizing paying down a credit card balance is a challenge, do not use one or sign up for a new one. There are ways to get creative with the holidays that don't require spending money you cannot afford to pay back.
Black Friday, Deal Days, Sales
Research, research, research.
Days designated for discounts andsales are a great way to get your holiday needs on a budget, but you should still plan for those purchases.
Scout out what sales are happening when, and which ones are offering the things you need at the greatest price reduction. Read into the rules about stacking coupons ahead of time, so you don’t include those discounts in your budget and there are no surprises at the counter.
Sales and discounts can cause you to overspend if you don’t go in with a plan! You see the sales and think you’re saving money when you’re really purchasing more than anticipated. Know where you’re going (or what website you’re logging on to), when, and why—and stick to that.
Plan for Next Season
Preparing your finances for the holidays can create more time for celebrating and less time budgeting.
A great way to save for the holidays is with a savings account. At Metro, we offer a Christmas Club account, specifically designed for this reason.
With a Christmas Club account, save for the holidays by depositing a set amount each week, monthly, or on a schedule that works for you, and when the funds are released October 1, you will have what you need for the season.
How much you chose to deposit is up to you—whether you start with $10 a week or $100 a month, the choice is yours.
Having a separate account for a specific savings goal ensures that the money doesn’t get reallocated toward other purchases. The ‘set it and forget it’ method can help you and your family spend the holiday season doing more of what you love!
