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Let It Save: Your Ultimate Holiday Budget Plan

Last Updated: 5/12/2022
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With Santa's sleigh grounded this year due to COVID-19, holiday spending is on everyone’s minds. In a year that has been unpredictable, especially when it comes to the economy and job security, what does it look like to budget well and spend wisely on gifts? Find actionable tips, spending insights and ideas for approaching the holidays in the guide that follows.

COVID-19 and the Digital Spending World

Holiday gifts traditionally account for 20% of annual retail sales, but economists predict the numbers could be askew for 2020. In an interview with the Wall Street Journal, retail industry analyst Sucharita Kodali predicted 2020 holiday spending would likely flatline when compared to 2019. Though she predicts online sales will soar by 20–25%, the lack of in-person shopping will be significant.

Recognizing these trends, retailers with online storefronts are working overtime to transition Black Friday to the digital space. Aside from Amazon's beloved Prime Day, Wal-Mart and Target have already introduced large-scale Black Friday events in hopes of appealing to online shoppers. While this transition may make holiday shopping less stressful than in years past, you may find yourself competing with far more shoppers to get the best deals.

4 Common Holiday Expenses and Ways to Save

Common Expenses and Ways to Save

Each year, Deloitte puts together a holiday retail survey designed to capture how households plan to spend their money and handle budgeting for holiday spending. The 2020 report highlights average spending for various common expenses and offers insight into where you could be saving.

1. Gifts

Average Cost: $487

Gifts can include purchases for both family and friends, though the final dollar amount depends on how many gifts you plan to purchase. Some people also purchase gifts for coworkers and other work professionals. A T. Rowe Price survey found parents spent an average of $422 per child in 2018.

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  • Set a firm budget before you start shopping.
  • Create a set list of individuals you plan to buy gifts.
  • Decide how many presents to buy for each person on your list.

2. Travel

Average Cost: $260

Many spend their holidays traveling to see family while others enjoy time away from their home. Deloitte notes this number is down by 34% year-over-year due to the pandemic, but some individuals may still choose to fly or drive to see their families over the holidays.

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  • Search nearby airports when looking for cheap flights to save on your holiday travel.
  • Book flights and car rentals far in advance.
  • Find a credit card offering ample travel points.
  • Consider flying on the actual holiday for cheaper tickets.

3. Entertaining at Home

Average Cost: $205

Whether hosting dinners, cookie decorating parties or holiday meals with the family, entertaining others at home can quickly add up with food and beverages, miscellaneous gifts and little extras to add sparkle to your festivities.

This year may be slightly different because of COVID-19. You can still have lovely holiday meals and cookie decorating fun with family members currently in your household and video chat with extended family members.

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  • Shop the sales at your local grocery stores, especially when it comes to bigger ticket items such as meat or flowers.
  • Consider styling the party as a potluck and ask others to bring sides, beverages and other dishes to complement the entree.

4. Non-Gift Purchases

Average Cost: $435

Expenses falling into this category can include holiday decorations, greeting cards, flowers, movie tickets and other costs that you commonly incur while celebrating with others.

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  • Buy items such as decorations, greeting cards, wrapping paper and other seasonal items once they go on sale or clearance after the holiday ends. You can use these items next year rather than paying full price.
  • Consider an artificial tree that you can reuse each year.

How to Approach Budgeting for the Holidays

How to Approach Budgeting for the Holidays

It's no secret that overspending during the holidays is tempting, especially if you enjoy seeing the glee of someone receiving a thoughtful present. Whether you tend to go overboard on gifts or holiday baked goods, there are ways to find a balance between keeping your budget and enjoying the holiday season.

By creating a budget early on, you can track your spending and ensure you don't break the bank. Below you can find some tips and ideas for keeping both your tree and your bank account in the green.

Spends by Common Gift Receivers

Deloitte reported the average household would spend $487 on gifts during the 2020 holiday season. This number may be higher or lower for you depending on the number of family members and friends whom you plan to give presents. A 2022 MoneyGeek holiday debt survey found that the average respondent spent $1,131 on holiday shopping.

A Budget Plan That Gives Back

Creating a budget before the holiday season starts can provide multiple benefits. In addition to ensuring you are debt-free, it can also help you set firm boundaries on spending and save money by avoiding frivolous purchases.

Here are ways to get started.


Make a list, complete with amounts

Create an Excel spreadsheet with the name of every person you plan to buy a gift. Decide your total amount for gifts and divide this number across each name. As you purchase gifts, add the actual spending amount to the spreadsheet to track your budget.


Create a gift fund

If paying for gifts from your monthly income in November or December will put you in the red, save a certain amount of money each month leading up to the holidays for the next year. For instance, you may want to save $10 per week that goes towards gifts.


Be flexible

Rather than feeling each person on your list must have one specific gift, regardless of cost, come up with a few different options. Set alerts for each to see which ones go on sale prior to the holidays.

Costs of Hosting a Party

Americans plan to spend an average of $205 on entertaining at home during the 2020 holiday season. It's hard to know exactly how COVID-19 will affect this number. Some individuals may be planning more at-home gatherings to avoid restaurants, while others may slash this budget entirely to limit gatherings.

A Budget Plan That Gives Back

Creating an entertaining budget can help you be aware of expenses such as food, beverages, party favors, games and decorations. By identifying these early on, you ensure they don't sneak up on you during the holiday season.

Here are three tips to help you spend wisely.


Identify budget and categories

Make a spreadsheet with every possible expense and put an amount next to each item that adds up to your total budget. Track your spending in each item as you go along and adjust the categories as necessary, ensuring you stay within your set budget.


Reconsider your menu

If you want to serve filet mignon, but your budget doesn't allow it, get creative. Retailers such as Costco sometimes offer deals on larger amounts of meat, or you can go with a different cut.


Recycle decorations

You can cut your decoration budget almost entirely by reusing materials from years prior. If you want a little refresh, consider adding small amounts of real greenery or flowers.

Traveling (if You Plan to Make the Trip)

Households plan to spend an average of $260 on travel during the 2020 holidays, a number that can vary substantially for families based on how they're handling COVID-19. Some individuals may decide to stay put this year while others may feel confident driving or flying.

A Budget Plan That Gives Back

Budgeting for travel can be tricky when you're at the mercy of changing airline ticket prices, but there are plenty of options for you to rein in spending and save on holiday travel.

Try these three tips for your travel plans.


Be flexible

If possible, look at flights a few days before and after your ideal dates to see if you can find a discount. If other airports are an hour or so away from you or your destination, check to see if it's cheaper to fly in or out of those airports.


Get travel insurance

It may seem counterintuitive, but travel insurance — especially on flights — can help ensure you don't lose money if your flight gets canceled or you cannot travel. Travel insurance can be particularly helpful during COVID-19.


Ask for travel gifts

If you want to get home, but your budget is already stretched, consider asking for travel vouchers instead of physical gifts this year. Your loved ones may decide to go in together on helping you get back for the holidays.

Download a Budget Worksheet to Help You Plan


If you prefer hands-on money management, budget worksheets can help make sure you don't overspend and track your purchases. We provide a downloadable Excel worksheet to help get you started, but you can also create custom financial planners to fit your needs.

Download MoneyGeek's Excel Budget Worksheet

Steps to Take After You've Made it Through the Holidays

Ultimate Holiday Budget Plan

Whether you stayed on budget or went over during the holidays, it's worthwhile to review your expenses, make adjustments to your budget plan and get a head start on your spending for next year.

Check out some of our tips below on taking a proactive step early in the new year.


Assess what worked (and what didn't)

Even though it's now in the past, take time to review your spending over the holidays. This step can help you assess what worked and didn't work, and make changes for the next holiday season. Be sure to look at each spending category and make notes.


Take advantage of clearance sales

If you enjoy refreshing your decorations, wrapping paper and holiday cards each year, go ahead and purchase next year's items when this year's decorations go on sale. Retailers such as Target, Wal-Mart and others eventually mark items down to 75–90% off the retail price.


Create a holiday savings account

Many banks allow you to open free savings accounts and automatically transfer a set amount of money after each paycheck. Set this up early so you can enjoy the rewards without thinking about it all year.


Buy presents throughout the year

You can often get better deals on presents when you don't feel a time crunch to purchase them. Determine the gifts you want to give, create alerts for each item online and buy them when you get a notice about them being on sale.


Set travel notifications

If you already know where you will spend the holidays next year, set alerts based on your available dates and location. If the price of a flight, rental car or other travel essential drops to a price within your set budget, go ahead and book it.

Expert Insight on Holiday Spending

We spoke with several industry leaders to provide expert insight on keeping your holiday budget on track this year. Check out the tips and insight they provide.

  1. What questions should consumers ask themselves before creating a holiday budget?
  2. How can buyers balance the emotional with the practical when it comes to buying meaningful gifts?
  3. If getting gifts for everyone on the holiday list is going to put someone in a monetary bind, what alternatives do they have during this season of gifting?
Adem Selita
Adem Selita

CEO & Co-founder of The Debt Relief Company

Emily Deaton
Emily Deaton

Financial Journalist at Let Me Bank

Meg Nordmann
Meg Nordmann

Author of 'Have Yourself a Minimalist Christmas'

Ben Reynolds
Ben Reynolds

CEO and Founder of Sure Dividend

Additional Resources for Holiday Spending

If you're still looking for additional information or tips on holiday spending, check out some top-tier resources on the subject.

About the Author


Katy McWhirter is a professional writer and owner of Heritage Creatives, a boutique historical branding agency. She has experience in nonprofit management, marketing, personal finance, government relations and education from her decade-plus writing career. Katy’s work has been featured in both the United States and abroad, highlighting the need for research-driven, accessible information on financial topics.

Katy earned her bachelor’s degree in social entrepreneurship from Belmont University in Nashville, Tennessee, and her master’s degree in modern history from the University of York in England. She spends her free time with her husband and two cats, restoring their 1901 home in Louisville and reading up on all things personal finance.