Holiday Shopping on a Budget: 10 Expert Tips for Families

Last year the average family planned to spend almost $1,000 on holiday spending. On top of that, 36% of Americans took on debt to fund their holiday purchases.

Christian Lovell, a Certified Financial Educator and one of our GoodBuy Gurus, is here to tell you that you don’t have to go into debt to have a memorable holiday season. Being money-smart during the holidays is all about planning. Here are her top budgeting tips (plus mistakes to avoid) when it comes to holiday shopping on a budget. 

1. Create a Realistic Budget 

Start by categorizing your spending. What major items will you need to spend money on? Gifts, decor, food, travel?

Then, prioritize what means most to you. Do you get joy from gift-giving or would you rather spend your hard-earned money traveling to spend time with distant family? Adjust your budget and spending limit to reflect your priorities. 

2. Shop Secondhand and Open Box 

Shopping secondhand is a great way to cut back on costs when it comes to the holidays (it's also a more sustainable way to gift!). Use sites like GoodBuy Gear to find amazing deals on hundreds of gifts for the little ones in your life. They’ve even included a helpful ‘Guilt-Free Gift Guide’ that makes finding the perfect gift easy! Families who shop with GoodBuy Gear save an average of 50% off retail. 

Shop the gift guide


Another way to save is to buy last season’s electronics. The average person doesn’t need the most cutting-edge features. You can snag deep discounts by purchasing the last version of a device (and it's probably pretty similar to the latest version anyway!).

3. Try a Gift Exchange

This is one of my favorite ways to cut down on your holiday budget. Instead of buying gifts for everyone individually (potentially dozens of gifts), organize a gift exchange where you’ll only have to buy one gift! You can gather your family members and loved ones together and draw names. Don’t forget to set a price limit!

4. Be Thoughtful About the Gifts You Give 

parent baking holiday themed cookies with her two little ones

Before you shop, take a moment to think about the person you are shopping for. What do they love? What might they need or use? Don’t go with the trendiest gift (that may go unused), rather give them something that shows that you were thinking about them. 

You may even want to give a personalized gift. For example, you may give an aspiring baker a hand-assembled jar of baking mix along with an amazing recipe. 

If you have family members or parents who need a little extra help shopping for the kiddos, send them GoodBuy Gear’s Grandparent gift guide full of thoughtful gift ideas to help push them in the right direction. When in doubt, a gift card is always a great option. 

5. Be Proactive and Shop Sales 

I often see people overspending when they wait until the last minute to do their shopping. It’s easier to go over budget when you’re shopping in a rush. Make sure this isn’t you by being proactive and buying gifts as soon as you see a good deal.

Take advantage of holiday sales like Black Friday and Cyber Monday to save some major cash. However, make sure you have your list handy and only buy things that you need.

Shop Sale Collection

6. Use Cashback Rewards, Apps and Coupons 

Sales aren’t the only way to save money. Before you shop, quickly browse the website, do a Google search for coupon codes and check the mailers sent to your home. What deals can you find? Make sure you compare prices and sales across stores.

You can also use cash-back sites and apps to save even more money on your holiday shopping list. Some of my favorite cash-back apps are Rakuten and Fetch.

Try and layer as many savings hacks as possible. Can you get your gifts on sale, with a coupon and get cash back? That adds up to major savings!

7. Shop Online 

Shopping online can help you save both money and time. Once you’ve found a gift you’re interested in purchasing, do a quick price comparison across sites to make sure you’re getting the best deal. Don’t forget to search for coupon codes and promotions. 

Another great hack is to filter by price. If you’re shopping online, many sites will let you choose gifts based on the approximate price. For example, “Gifts Under $10.” Always check for options within your budget!

8. Remember What the Holidays Are About 

It is so easy to get swept up in the holiday season, feeling like you need to buy lavish gifts or spend money on every single one of your friends and family (which can add up quickly.) Before you start spending, take a moment to reflect on what the season means to you and what you truly find important during the holidays. I’ll bet ‘stuff’ and material items aren’t high on that list!

9. Set Boundaries with Presents 

It can be so easy to overspend on your kids. Try shopping using this rule: Only buy them four gifts. 

  1. Something they want, 
  2. Something they need, 
  3. Something to wear and 
  4. Something to read.

10. Start Planning Early 

Here’s a tip for next year: start planning early! An easy way to make holiday budgeting easier is to start planning your holiday shopping budget and holiday expenses in January. Set aside 30 minutes during the New Year and decide what you want your holiday budget to look like next year. 

Reflect on what went well and what could be improved this past season. Once you have your budget target for the next holiday season, divide that number into 12, 24 or 52. This is the amount you need to save monthly, bi-weekly and weekly to reach your goal for the next holiday season.

Common Holiday Shopping Budgeting Mistakes 

Here are the top three mistakes I see individuals and families make when holiday shopping:

1. Failing to Plan 

If you’re not creating a budget, shopping with intention and sticking to a plan, you’re more likely to overspend or rely on high-interest debt to fund your holiday. As the saying goes, “if you fail to plan, you plan to fail.” 

Without a spending plan or budget in place, it’s easy to let your emotions guide your purchases and lose track of your spending. Creating a spending plan for the season will help ensure you’re able to enjoy the holidays without derailing your financial progress (we’ll talk about how to do this below!)

2. Not Planning Far Enough in Advance 

I often see people saving for the holidays beginning in October and November. However, this can put an extreme strain on your regular budget (or encourage you to use high-interest debt like credit cards to cover your holiday purchases.) 

One of the easiest ways to make holiday budgeting easier is to create what is called a ‘sinking fund’ as early as possible. To do this: 

  1. Determine how much you would like to spend on the upcoming holiday season 
  2. Take that number and divide it by the number of months until your holiday celebration

This will break your large budget into more manageable pieces, making it easier to save. I suggest starting in January if possible.

3. Feeling Pressure to Buy Expensive Gifts 

You may see your family, friends or coworkers buying extravagant gifts and feel like you need to do the same. However, it is important to keep the sentiment of the season in mind when shopping for the holidays and ask yourself: would your friends and family truly want to put you in a financially stressful situation for the sake of holiday gifts? Probably not!

How to Set a Budget for the Holidays 

When it comes to setting a budget for the holidays, setting a target dollar amount is a great place to start. Some professional experts suggest 1-1.5% of your income. This means if you make $50,000, your Christmas budget may be around $500. 

Make sure this number is in line with your current disposable income (the amount you have left each month after paying all of your bills and other expenses). It is absolutely okay to decrease this suggested amount if necessary for your personal budget.

Once you have your total amount set, it’s time to determine your expenses. Write down each category you typically spend money on each holiday season. Common categories might include:

  1. Gifts
  2. Decor (tree, lights, baubles, etc.)
  3. Gift packaging (wrapping, bows, tissue paper, etc.)
  4. Travel (do you visit family during the holidays?)
  5. Food
  6. Charitable giving
  7. Clothing (for holiday parties and more)

Once you have determined the total amount you would like to spend, as well as the different categories you need to spend on, you then further allocate your money within each category. 

Since the largest category is usually gifts, I usually suggest starting with allocating money to this group first. To do this, write down the names of each person you would like to buy a gift for this holiday season. 

Next, write the amount you’d like to spend for each person, keeping in mind your total budget and the amount you have left to spend.

Then, take a look at who you have included on this list. If you have more than five people outside of your immediate family on this list, think of cutting back. You can opt for gifting handmade items (like baked goods) to these individuals.

Lastly, total the amount you have decided to spend on gifts. Subtract this from your overall budget amount and adjust the other categories accordingly. Continue this process until you have allocated all of the money in your holiday budget.

Tip: It’s important to track your spending and keep a running record of how much you’ve spent per category and how much you have left to spend. This way, if you overspend in one category, you are able to adjust and reduce spending in another category so you don’t blow your budget!

Affordable Gift Ideas for the Family 

A little girl unwrapping presents under the Christmas tree

Need help thinking of affordable gifts for your family? Here’s what I suggest: 

For the whole family:

  • Books:This is one of the few, low-cost gifts that is great for anyone regardless of age, income, etc. Everyone can benefit from receiving a new, thoughtfully purchased book.
  • Handmade items: Etsy for some awesome gift ideas.
  • Slippers for when the weather turns cold
  • Board games
  • Outings and experiences

For the kiddos: 

  • Contributions to their future:Consider making a small investment to a 529 or custodial investment account for the kids in your life. A small contribution now can compound into a large investment in the future. 
  • Secondhand and open box items
  • Craft kits (think Play-Doh, Slime, etc.)


As a last note: If you’re looking to make some extra cash to fund your holiday purchases, consider selling your gently used baby and kid gear with GoodBuy Gear. Not only will this make room for all the new gifts in your home, but you’ll be doing something that benefits your wallet and the planet. 

Happy Shopping! 



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