There’s no doubt Christmas is an expensive holiday. In fact, consumers plan to spend nearly $1,000 on gifts, holiday items, and other non-gift purchases for themselves and their families this year, according to an annual survey by The National Retail Federation and Prosper Insights & Analytics.
It might not sound like all that much, but when the average American makes just $68,703 per year and spends an average of $164.55 on the rest of their expenses, the math simply doesn’t add up.
And although a big Christmas certainly feels magical, it’s not a good reason to go into debt. The good news: You don’t have to. With a few smart strategies, you can save big on the costly holiday. Here’s how:
1. Set a budget
Creating a budget is one of the most important things you can do to keep your spending in check. When you have your sights set a specific dollar amount, you’re less likely to spend blindly, which only leads to overspending.
Write out each person’s name, then set a realistic dollar amount based on their age and your relationship. Then add up the total. Adjust if necessary until you have a realistic plan in place.
2. Set up a separate account for Christmas funds
Money-saving strategies are only great if you have a place to put all of the funds you’ve saved. And when you have a separate place to put said funds, you’ll be less likely to touch them throughout the year. Plus, you’ll know exactly how much you have at your disposal—no risk of accidentally spending the money you need for your day-to-day expenses
3. Start shopping early
Don’t wait until the last minute to shop. Shopping ahead of time will not only save your sanity during the holiday rush, it’ll also reduce your costs.
Post-holiday sales are some of the best all year. But even if you can’t get it together nearly a full year in advance, you can always use this time to stock up on other Christmas expenses, like wrapping paper, gift bags, tape, and holiday stationery.
4. Try frugal February
Why not start a new annual tradition that helps you save big for Christmas? Here’s how it works: You simply commit to a money diet during the month of February. Since it’s a short, dreary month, it’s a great time to hunker down at home and limit excess spending like dinner out.
It doesn’t have to be boring, either. Rather than visit a fancy restaurant on date night, cook something special together, then sit down at the dining room table.
At the end of the month, schedule a check in. How did your spending compare to a more typical month? If you succeeded in saving money, put all (or a portion of) those funds aside for holiday spending.
5. Download Acorns
This easy-to-use platform automatically rounds up any purchases you make on linked credit or debit cards to the nearest dollar. Then, you can save or invest that money. (You can also get cash back at over 350 retailers through the platform.)
There is a small service fee of $1 to $3, depending on the plan you choose, but it’s nothing compared to how fast those very painless incremental deposits add up
6. Save credit card points
If you have a rewards-based credit card, use that card for the bulk of your purchases. Of course, you never want to put more than you can afford on a credit card, but if they’re purchases you’d make anyway, you can’t go wrong with this strategy.
At the end of each month, check to see how many points you collected. Then, swap those points for cash back, and put those funds toward holiday spending.
7. Use cash back services
There are tons of browser extensions and websites, like Rakuten, that essentially pay you to shop. Here’s how it works: when you shop through these services, you can get cash back from a selection of stores. Those stores pay the platforms you’re shopping through a commission for the referral, then they share the commission with you in the form of cash back. It’s a totally free and easy way to save some extra cash.
8. Sell your stuff
No, not the things you need or want. Take the easier way out: Chances are, you’re holding on to plenty of perfectly good, usable items your family has out-grown or simply never uses. Think: clothes, baby gear, or even furniture.
List these items on sites like Facebook Marketplace or Poshmark, or bring them to local consignment shops. Put any money you earn towards your Christmas fund.
9. Use price comparison websites
Sites and browser extensions like Pricegrabber let you seamlessly compare prices at various retailers to see if you’re getting the best deal out there. No tiresome Googling required. Other sites, like CamelCamelCamel, will even show you 90 days of price data, so you can see if prices are currently inflated or, conversely, at an all-time low. You can even set alerts—when the price of an item you’re interested in drops, the site will notify you. That way, you can jump on the deal.
10. Take advantage of online coupon codes
Download the browser extension Honey. It’ll notify you if the site you’re shopping on has any current deals or promotions running, plus aggregates coupon codes that might help you save. With the press of a single button, the extension will run all of the various codes available to see which one nets the best final price.
11. Use gift cards
Chances are you have plenty of unused gift cards in your wallet or junk drawer, so why not put them to work? Sure, you’re still spending the money, but if you weren’t using them anyway, you won’t feel the sting of those purchases.
12. Sell your unused gift cards
Alternatively, you can sell your unused gift cards for cold hard cash. Though the services that buy gift cards—Card Cash, for example—take a small percentage in the form of their service fee, it’s a great option if the cards you have aren’t for stores you want to shop at.
13. Buy discounted gift cards
14. Buy second-hand
While it’s undoubtedly fun to rip open brand-new items, you can score some seriously good deals on the second-hand market. In some cases, these items may even be new without the box. Some particularly great items to get second-hand include antique housewares, children’s bicycles, video game consoles, and even clothing.
15. Send digital holiday cards
Printed cards are expensive—and so are the stamps you need to mail said cards. Plus, as cute as they are, these kinds of paper goods are inherently wasteful—most people toss them. You don’t have to go all bah-humbug on your friends and family, though. You can send a sweet sentiment and still save by sending digital greetings with a site like Paperless Post.
16. Use loyalty points
If you regularly shop at certain stores, you might be racking up points you can use toward future purchases. Many clothing and department stores have these types of programs, as do electronics retailers and even grocery stores. See if you can cash in some of these points to help save on everything from presents to the holiday meal.
17. Host a secret Santa
Have a large family, and thus, a list as long as Santa’s? See if your family members would be up for hosting a secret Santa in lieu of buying presents for each and every person. This way, you can spend a little bit more on one person, getting them a quality gift, but still save both time and money while shopping. Chances are, everyone will be on board.
18. Host a potluck
Rather than foot the entire bill for the meal, see if you can divide and conquer. You can take on the main dish—like the roast, for example—but ask your guests to all be in charge of one additional food item. Just be sure to assign each guest a specific category—appetizer, side dish, dessert, or beverage—so you don’t end up with too much of one thing and not enough of another.