How to Save Money While Preparing for the Holiday Season

image of holiday spending

As the 2024 holiday season approaches, many families are looking for ways to celebrate without breaking the bank. For consumers on a budget – that is, most of us, it’s important to plan ahead, make smart choices, and use strategies that allow you to enjoy the holiday season without financial strain. Here are some effective ways to save money on family gifts, holiday meals, and some important information about the growing trend of using installment options like Buy Now, Pay Later.

Saving Strategies for Family Gift Buying

One of the biggest expenses during the holiday season is buying gifts for family and friends. To keep costs down, start with a clear and realistic budget for gifts. A good rule of thumb is to avoid spending more than you can comfortably afford, even if it means fewer or smaller gifts.

Here are a few specific strategies for saving on holiday gift buying:

  • Shop sales early: Black Friday and Cyber Monday remain two of the biggest discount events of the year. However, many retailers now offer "early Black Friday" sales and extended discounts throughout November and December. Starting your shopping early allows you to take advantage of these deals and avoid paying full price closer to Christmas. Buying early can also mean you won’t need to spend extra to get expedited shipping.
  • Use cashback apps: Apps like Rakuten, Ibotta, and Honey allow you to earn cashback or find coupons on purchases from popular retailers. Over time, these small savings can add up.
  • Buy in bulk or multi-pack gifts: Purchasing sets of items, such as candles, lotions, or toys, allows you to break them up into multiple gifts, which is both thoughtful and cost-effective.
  • DIY gifts: Homemade gifts, such as baked goods, handmade crafts, or framed family photos, offer a personal touch that can be more meaningful than expensive store-bought items.

Saving Strategies to Keep Holiday Meal Expenses Under Control

Holiday meals can become expensive, especially if you're hosting large gatherings. However, there are several ways to keep meal costs manageable without sacrificing the festive experience:

  • Plan a potluck-style meal: If you're hosting a large family gathering, ask each guest to contribute a dish. This not only reduces your costs but also adds variety to the meal. Everyone feels included, and you avoid the stress of preparing everything yourself.
  • Buy non-perishable items early: Pantry staples like canned goods, spices, and baking ingredients often go on sale before the holiday rush. Stock up on these items well in advance to avoid paying premium prices later.
  • Use coupons and grocery store loyalty programs: Many supermarkets offer discounts, digital coupons, or rewards points leading up to the holidays. Take advantage of these programs to cut down on your overall grocery bill.
  • Simplify the menu: Stick to classic, easy-to-make dishes that won’t require exotic ingredients or expensive specialty items. Focusing on quality over quantity can still create a memorable meal without overspending.

The Practice of Family Lotteries to Reduce Gift Spending

One of the most effective ways families are cutting down on gift expenses is by organizing a family lottery or Secret Santa. This practice, in which each person draws a name and is responsible for buying only one gift for that family member, helps to significantly reduce the number of presents to buy. It’s an especially helpful approach for large families, where buying gifts for every person can quickly become overwhelming and expensive.

Not only does a gift exchange reduce spending, but it can also encourage thoughtful gift-giving since participants can focus on buying something more meaningful for one individual. To add fun to the event, families often set a spending limit, ensuring that the cost stays manageable for everyone.

The Return of Christmas Layaway Buying

Layaway programs, which allow customers to pay for items in small, manageable installments over time, have made a resurgence in recent years. Retailers like Walmart and some local stores are bringing back layaway plans, allowing families to reserve holiday gifts and pay over a set period leading up to Christmas.

This is a helpful strategy for those who prefer to avoid taking on credit card debt. Layaway plans typically don’t charge interest, unlike credit cards, making it a budget-friendly option. However, it’s important to check the store’s terms for any service fees or deadlines to avoid losing the items if you can’t complete the payments.

The Popularity and Dangers of Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) services like Klarna, Afterpay, and Affirm have exploded in popularity during online checkouts, especially during the holiday season. BNPL options allow consumers to spread out payments over weeks or months, often with little or no interest, making it easy to purchase gifts without immediate full payment. BNPL seems a lot like the older layaway plans, but there are some key differences and dangers you need to be aware of:

  • Overspending: Because BNPL offers the ability to defer payments, many consumers may be tempted to buy more than they can realistically afford. This can lead to financial trouble in the months following the holidays as payments start to accumulate.
  • Hidden fees and interest: Some BNPL services offer interest-free periods, but if you miss a payment, you could face late fees or high-interest charges. Be sure to read the terms carefully before choosing this option.
  • Impact on credit: Although some BNPL services don’t affect your credit score, others may report late payments, which could negatively impact your credit rating. If you're considering BNPL, ensure that you fully understand the potential consequences of missed payments.

With a little planning and some simple strategies, it’s possible to enjoy this holiday season without overspending. The key is to plan early, stick to a budget, and make the most of opportunities to save. You’ll enjoy the holidays even more when you experience the peace of mind that comes from knowing you didn’t put your family’s finances in jeopardy.