Americans tend to spend a lot of money during the holidays. After all, it is the season of giving. 

In fact, the average person planned to spend $1,455 on holiday shopping in 2022, which included the cost of gifts, food and decorations. According to the National Retail Federation (NRF), consumer spending on gifts and other holiday expenses has increased each year since 2009 – and will likely continue to rise this coming year. 

However, some people aren’t so sure. Although overall spending will increase, a recent survey suggests holiday shopping will be more difficult this year than in the past. On average, U.S. consumers said they plan to spend 39% less compared to 2022. A third of Americans even plan on going into credit card debt just to fund their holiday purchases.

10 budgeting tips for holiday shopping

Want to take the stress out of holiday shopping? Here are 10 budgeting tips you can't afford to miss: 

1. Get a head start

Did you know that almost a third of consumers kick off their shopping in October or even earlier? There’s a good reason why. If you wait until the last minute to start browsing, you run the risk of paying extra for expedited shipping or getting stuck with pricier items. 

The earlier you shop, the better chance you have crossing every name off your list without going over budget. Plus, you’ll have a much bigger window of opportunity to think up the best possible gift for every recipient. 

2. Set holiday spending limits

A good way to think economically about your shopping is to put a cap on how much you can spend. Start by figuring out how much you’ll need for your regular monthly expenses. Then, add what you anticipate spending during the holidays. If you’re not sure, use last year’s expenses as a realistic reference.

Now that you know your must-haves and nice-to-haves, you can set a spending limit that reflects your financial position. At the very least, this exercise will help set parameters before you start shopping.

3. Prioritize bills and other essentials

The last thing you want to do is to put holidays over essentials. Try to curb impulse buying and reserve a set amount to cover your most important items: rent, utilities, insurance, loans and so on. If you need help identifying these expenses, try the Consumer Financial Protection Bureau’s free budget tool to get started.

4. Take advantage of shopping holidays

It’s a smart idea to time your buying around certain consumer holidays, such as Black Friday or Cyber Monday. This is usually when stores and retailers feature their best deals of the year, allowing you to scoop up plenty of exciting items at a fraction of the cost. 

5. Consider homemade gifts

Do-it-yourself (DIY) gifts can save you a lot of money in the long run. Plus, they offer a more personalized, meaningful sentiment that store-bought items simply can’t replicate. Whether it be arts and crafts or baked goods, you can’t go wrong with a homemade present.

6. Track your spending as you go 

From parties and presents to food and travel, there are many different ways to blow through your budget in a hurry. So, why not make a list and check it twice?

Start by listing all your planned holiday expenses, then group them into relevant categories (decorations, gifts, etc.). Not only will this process help you keep tabs on your spending, but it’ll also ensure you don’t forget anything important. 

7. Shop online and compare prices 

Do your due diligence and browse around for the best deals. You may find an item on your list at a bargain on one website compared to another. 

8. Leverage cash-back and rewards programs 

If you own a cash-back credit card, you can use it to manage spending on a budget. These cards let you earn rewards for everyday purchases, which could mean more money in your pocket while you’re shopping for presents. 

9. Reuse last year's decorations

Why waste money on replacement decorations when last year’s are perfectly good? Although new is always exciting, reusing older ornaments and trinkets will free up more budget to spend on loved ones, travel and essentials. 

10. Conduct a post-holiday analysis

Look back at your holiday spending. Did you stay within your budget? Did you overspend? Was there an unexpected expense? This activity will help you plan ahead and make next year’s holiday season an even better experience. 


This content is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.

M&T Money Mentor content is provided by EVERFI, Inc, for educational purposes only. It is not intended to be an offer or solicitation for a product or service and is not an offer to extend credit. The information provided is also not intended to provide investment, tax or legal advice and may contain information on products or services not available at M&T Bank and may describe practices or policies not available or applicable to M&T products. All examples are for illustrative purposes only.