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Create a Holiday Budget You Can Stick to (+25 Gift Ideas)

Did you surpass your holiday budget last year? Has inflation left your pockets feeling a little emptier this year? Here are a few ways to create and stick to a holiday budget + 25 good gift ideas for any budget.

Photo by Alisa Anton on Unsplash
Every year, I create a holiday budget that, for one reason or another, I grossly exceed. 
No matter the holiday you celebrate, the spending between mid-November and late December is almost always excessive. There are gifts to buy your loved ones, meals to create and cook, excursions to go on with your family, holiday travel, and all the last-minute expenses that rear their ugly head when you're sure you can't spend another dollar. 
Is there a way to be mindful of your budget
Over the last five years, Americans have spent an average of $641 on holiday gifts, $224 on non-gift items like food and decorations, and $139 on other non-gift purchases, according to the National Retail Federation. This is $1000 before we're even talking about travel. 

Table of Contents

How can a holiday budget be created when "the season" is designed to drain your bank account and fatten your credit debt? This year, I'm preparing a holiday budget, and trimming the tree (so to speak) to maintain a semi-reasonable holiday budget. 
Before you call me a Grinch or a Scrooge, close your eyes and remember the feeling of receiving that credit card bill in January of this year. All of that holiday cheer kind of dissolved when you realized you needed to spend the first half of the year paying for the holiday season.
There are many ways to make the season cozy and special. I promise that the fancy wrapping paper and the superfluous holiday gifts do not make a special holiday special. Most of the ingredients for a special holiday cannot be bought under the fluorescent lights of Target at midnight among throngs of other crazed shoppers. 

7 Reasons Holiday Budgets Fail 

If you exceed your holiday budget every year, you're not alone. The marketing blitz between October and December every year is unavoidable—especially when mixed with twinkly lights, happy music, Buddy the Elf, and a whole lot of eggnog.  

1. Getting Started Too Early

Black Friday is just the beginning of a crazy holiday season. Actually, that's not even true anymore. This year, I started getting my holiday shopping emails and that dreaded Amazon catalog before I suited my sons up for trick or treating. 
Normally, I love getting started early. 
Since Christmas shopping, especially with two young kids, is a big job, it would seem that getting my purchases done early is a good thing. Seriously, how could getting a head start be bad? 
Because the holiday season is such a beast, it's not about gifts anymore. It's about the onslaught of sales emails, the nudges to remember to treat yourself, and the unavoidable trips to HomeGoods or Target where you weren't planning on getting holiday decor, but your cart is full of tinsel and twinkly lights. 
It's the outings that revolve around ice skating, seeing Santa, catching a holiday movie or show, attending a tree lighting ceremony, and the list goes on. Celebrating the season is exciting, but I'd recommend starting your season with some holiday movies at home—with some homemade cookies to get the season started on a reasonable budget. 

2. Retail Therapy + Psychology of Overspending

I'd be extremely irresponsible to write this article without mentioning that the holiday season is a really difficult time of the year for many. While holiday commercials and marketing materials are festooned with twinkle lights and jingle bells, the holidays don't bring joy and festivity to all. They bring quite the opposite to many. 
If you're like me, you might enjoy burning sad-face emotions with impulse purchases and DoorDash, all while blasting the Dolly Parton and Kenny Rogers Christmas album on repeat. Everything is fiiiiiiiiine! 
Writer Emma Steve goes deeper into this subject, and you should read her Medium piece, The Psychology Of Holiday Shopping: Understanding Consumer Behavior for all the psychology involved in marketing around the holidays. Once you know what's happening, it's much easier to tune out. 

3. Lack of Planning 

If you're like me, the last-minute holiday spending always gets you. At this point, you're worn out. That's where overspending is a real danger. 
Make your list before your shopping starts. Know the gifts you need to buy, the events you must attend (more on this in the next section), the meals you need to make, and any unexpected expenses you might recall from last year. If possible, pare this list down. Is everything on it really necessary? 

4. Doing It All

If you need a sign to RSVP "No Thank You," to a holiday party (or two), this is it.
You don't need to attend every event, nor buy a sparkly new outfit for each party you attend. You will never wear the sequin dress outside the month of December—unless, of course, you wake up in it on January 1st. 
A lot is going on, and it's tempting to do it all, but you don't need to. Prioritize events, parties, and even your gift recipient list. 

5. Pressure Traveling 

We travel over the holidays to be with the ones we (sometimes begrudgingly) love the most. We use up all of the airline points we saved for a dream trip to Hawaii to fly in a tin can to a freezing airport for four times the amount a flight normally costs. 
Fa la la la la la la la la....
If we're lucky not to get stuck in an airport with thousands of stranded travelers (a la Holiday season 2022), we have a lovely holiday at home with our family. In this perfect scenario, it's worth it, and it's a beautiful thing! 
For me, every time I try to travel for the Holidays, I am like that Math Lady meme. I'm trying to get my family from point A to point B, but I can't understand how it costs 5x the amount! And, without fail, whenever we travel for the holidays, we receive one last unexpected present: a viral illness that keeps giving all through January. 
I'm wrapping up this rant to say this: There is so much pressure to do too much.
Planes travel to many destinations every day of the year. If the pressure to spend a down payment on a car to get to your hometown for three days is too much, try staying put. It might be time to reduce holiday expenses and start your own traditions.

6. Unexpected Gifts 

Normally, receiving a thoughtful and unexpected gift is exciting! During the holiday season, it's a nightmare. 
If you receive an unexpected gift from your cousin's spouse's sister, just receive it. Don't feel panicked about running out to buy her something on December 24th. Accept the gift with grace and gratitude. 
Some people love to give gifts. That doesn't mean you must burden yourself with re-gifting or purchasing more. If you've done your preparation, you can chalk this gift up as an unexpected perk. If your cousin's spouse's sister is a main character next holiday season, add her to next year's giftee list. 

7. Not All Holiday Sales Are Created Equal 

Preparation is also so important because holiday sales and discounts are designed to get you—and get you good. 
In the next section, I'll share how to create a working gift list. This list will detail your gift recipients, how much money you're willing to spend on each person, and where you intend to shop. If you're aware of past Black Friday, Small Business Saturday,  or Cyber Monday sales, you can also note that on your gift list. 
This pre-planning protects you from popping into a store in the mall because the sale seems "too good to pass up." 
Knowing your budget and your shopping targets is key to cutting out the draw of slashed prices, free shipping, and unexpected coupon codes. 

How to Trim Your Holiday Budget 

I set out to write this article specifically because I wanted to keep my budget under control this year. Sometimes, writing out the advice you're not so great at keeping yourself is extra helpful. 
Since we often look for ways to budget thoughtfully (and without shame), the holiday budget seemed the next logical budget to trim. 

1. Make Your List, Check it Twice 

If everyone has been nice this year, making your list is the most important part of your holiday budget. 
Depending on whether you're a spreadsheet queen or a pen-and-paper person, here are the essential elements of a great shopping list. Here's what I include on my holiday shopping list:

The Holiday Gift List

Name of Person:

Budget: 

Specific Item:

Where to Shop:

Any Sales to Note:

Additional Small Items (If Any):
This list works because it keeps me focused on the who, what, when, where, and why.
With this list, I will not make any impulse buys at the last second. Bath & Body Works can keep their simultaneously intoxicating and nauseating smell to themselves this year. Unless you plan to spend at a certain retailer, no "ten items for $10" sale should be able to sway you. 

2. Secret Santa or Gamified Gift-Giving 

A fun fact about me? I have nine siblings, and we all still get along. That's great for our family, but it's a killer when it's time to give gifts. 
On my side alone, I also have 14 nieces and nephews. Unless I was Bill Gates and my full-time, year-round job was shopping, there is no way I would be getting all of these beloved angels a gift. 
Years ago, we started a Sibling Secret Santa, and it's saved us all from grossly exceeding our spending limits—not to mention giving and getting a lot of dud presents. Have you ever received a present from your brother? Spoiler alert: it's usually not great. 
Since we live in different places, we use Draw Names, a Secret Santa Generator. This free tool lets you set your whole family up for a great surprise. Gifters and giftees can share wish lists, anonymously ask each other questions, and generally make the gift-giving experience pretty fun! 
Another way to "gamify" your gift-giving is by establishing a theme. I've heard of families who plan a trip together. When the holidays come around, the gifts are all themed around the upcoming vacation to Italy or Florida...or Legoland. 
Other Gift Themes to Try:
  • Sustainable Gifts (All gifts come from secondhand sources) 
  • Favorite Things (All gifts are around the giftee's favorite things, like Golden Girls memorabilia, coffee mugs, or nostalgic gifts) 
  • Date Gifts (All gifts are experiences that the gifter and giftee can do together) 
  • Cozy Gifts (All gifts are cozy in nature. Think socks, slippers, heated blankets, hygge!) 
This "themed" or gamified giving works better with family or close friends. You can try this with more casual acquaintances, but it might be tougher to pull off. In these cases, it's best to gather more information going into the gift exchange.
For example, pretend you're participating in a workplace Secret Santa, and the theme is "nostalgia." In this case, have each coworker share fun, nostalgic facts, like their favorite television show, first concert, or things they like to collect. This gives every participant a leg up in searching for a fun gift. 

3. Give Personalized, Homemade or Experience Gifts

You knew this tip was coming, but it's a good one! Hear me out, ok? 
If you're a talented knitter, your loved ones have likely been coveting a hand-knit scarf for quite some time.
If you have a child, chances are that they are the apple of your in-laws' eyes. This opens you up to a world of opportunities for heartfelt and budget-friendly gifts. What grandparent wouldn't want a framed photo of the smartest and most beautiful two-year-old the world has ever seen? Get your little elves to work on DIY ornaments or a Christmas letter they can send to Gammy and Poppy yearly. 
Pro Tip: If you're participating in a gift exchange with an explicit dollar amount, don't go homemade! I don't want to catch the blame for it! 
Personally, I love experience gifts. I love gift cards, IOUs, promises of babysitters, food subscriptions, and anything that has the potential to keep giving. 
Experience Gifts:
  • At-home massage from Zeel (This is a gift we give to each other at Career Contessa all the time. Okay, it's not inexpensive, but it is truly the best gift ever.) 
  • Cooking class
  • Cameo video 
  • Gift certificate to a favorite restaurant
  • Food of the Month Club 

25 Gift Ideas That Won't Break the Bank

This wouldn't be a *fun* holiday budgeting guide without at least a few real gift ideas, so I put some of my favorites together. 

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