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7 Ways to Save for the Holidays


The holiday season is right around the corner. Some people are cheerful and excited. Unfortunately, many people are stressed.

No, it isn’t (just) having to endure Aunt Ida’s nagging that stresses people out. And it isn’t the long lines at the airport. Some people are stressed out about how to afford the holiday season.

giftsThe holidays are an expensive time of year. In 2011, the average American spent $646 on holiday gifts, according to a study by the American Research Group, Inc., and many experts predict that Americans are spending even more now that we’re firmly out of the recession.

That $650+ price tag is only for gifts. Most people are also expected to travel out-of-town and host parties at their home, both of which can be expensive undertakings. The American Auto Association (AAA) estimates that almost 100 million Americans travel a distance greater than 50 miles during the holiday season, and median spending on holiday travel was $718.

Add travel to gifts, and now we’re talking about almost $1,400 in expenses. Wow!

How can you prepare financially for the holiday season?

#1: Open a Special Savings Account

Ideally, you should save year-round for the holidays. Open a savings account that’s especially designated as your holiday fund, and make a habit of contributing $50 – $100 per month into that account, every month. Think of this as a “bill” that you pay yourself, each month. By the time December rolls around, you’ll have $600 – $1,200 saved for the season.

#2: Put Savings on Auto-Pilot

If possible, see if you can get that money automatically transferred from your checking account to your savings account every payday. If you get paid twice a week, for example, then divide the amount you want to save (let’s say $1,400) by the number of paychecks you get each year (26). This equals $53.84. Now, set up an automatic transfer every payday from your checking to your holiday savings account. This puts your savings on auto-pilot.

#3: Look for Deals

Don’t forget about the traditional ways to trim costs while shopping: Always shop with a list (so that you don’t make impulse purchases), use search websites like (owned by Google) to comparison-shop, and — perhaps most importantly — don’t buy something just because it’s cheap. Lots of retailers offer holiday discounts in order to goad people into buying more than they were planning on purchasing.

#4: Fly on Christmas Day

If you’re willing to do so, consider booking your air travel for Christmas Day, which is when you can typically find the cheapest deals on flights.

#5: Have a Backup Plan

Winter storms can create delays, so have a backup plan prepared in case inclement weather upsets your Plan A. If you’re driving a long distance, a AAA membership (with towing privileges) is definitely worth investing.

#6: Carry Snacks

In case of travel delays, have a stash of snacks and other goodies with you. This will help you avoid the tempatation to grab fast food or a restaurant meal just because you’re hungry.

#7: Impose a Limit

Do your kids have a list of presents that runs a mile long? Tell them that Santa can only bring them 1-2 gifts per year, and then ask them to choose which 1-2 items from their list that they want the most. This has the bonus effect of teaching your children the lifelong skills of restraint, budgeting, and prioritizing.

Kennedi writes about frugality, fashion and fitness.

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My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Having a gift limit is so important! Otherwise, I would get caught up in the “just one more thing” framework, which led to me trying to balance it out with “one more thing” for another person. ARG!!!

    Thankfully, we have our Christmas savings on auto-pilot throughout the year, so we have the budgeted $700 sitting in our bank account. But I was just laid off, so our budget has changed and I haven’t spent more than $10 on any gift for anyone. The big kicker is the Christmas tree. I love a living tree, but we dropped $70 (ahhhh!!!) on it last year. I’m not sure how to get a living tree for much less this year.

    • Exactly! Sounds like you have your Christmas shopping under control Rebecca. Seems weird to think about Christmas already, but it’s right around the corner isn’t it?

  2. Great tips! Setting a limit on your spending can really do wonders. It’s also a good way to test how good you are in making and following a budget.

    • Setting a limit is key. We all love to give during Christmas and it is so easy to lose track. I personally shop with cash. When it’s gone, I’m done.

  3. Having a good plan and some limits to what you’re willing to spend can surely help a lot. Good advice 😉

    • It’s always best to plan for future expenses. Even the unexpected ones! Thanks for the comment dojo.

  4. Personally, I shop online to get the great Black Friday deals and avoid the crowds.

    Combine that with a good cashback rebate and you can stretch those dollars mighty far.

    • Yup. Smart move. Those crowds are crazy! No sense getting trampled for a $250 HDTV.

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