How to Start Planning for Your Holiday Spending Now

Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.

According to the National Retail Federation, “Holiday sales in 2015 increased 3 percent to $626.1 billion.” This was after research predicted people would spend, on average, $830 on holiday shopping.

This year, in 2016, I expect these numbers to rise as they typically have year after year. Even during the 2009 Recession, Gallup predicted that Americans would spend $740 on average on Christmas, so there’s no telling how much the average American will spend this year in 2016.

Since $800 is a pretty high number to spend on shopping, especially for the average family making around $50,000 per year, I wanted to talk about how to plan for holiday spending.

I personally have $800 in a separate high yield savings account earmarked for Christmas. It’s something I started saving for in January, and it reached the $800 mark in mid-summer. I don’t expect to spend $800 on gifts specifically. In fact, I’ve already purchased a few second-hand gifts for my kids for the holidays. Plus, we typically do a pretty tame four gift Christmas for them anyway. Rather, that $800 will go towards food for the holidays, a big Christmas dinner, gifts for family members, holiday decorations and more. Some of it might be used for a new gift or two for the kiddos and maybe something for my husband.

Once we get closer to the Christmas season, I’ll move the $800 I saved to my regular checking account, and then I’ll go about my grocery shopping and holiday shopping knowing I have a buffer to get what I need.

As a recovering Scrooge, I am always anxious when the holiday season rolls around. However, I’m going to try to enjoy it this year and make it special for my kids. Making it special, though, doesn’t mean I need to spend a ton of money on them. They are only two-years-old after all.

So, if you want to have a happy holiday season, one of the best ways you can do that is by lowering your stress. Since one of the best ways to lower stress is to plan, plan and plan some more (especially when it comes to what you will actually spend) step one is to decide what you want to buy and who you want to buy it for.

1. Plan What You Will Buy


The easiest way to develop a Christmas spending plan is to make a list. You can even make an Excel spreadsheet if you want to get fancy. Write down the names of your family members along with a ballpark price range and some gift ideas to help establish your plan.

If you feel like you have too many people on your list, talk to your family members about doing a Secret Santa gift exchange instead. Once you know who you want to buy for and how much you want to spend, you then know the ballpark financial figure you need to have on hand before the holidays get here. When you do start buying look for ways to save on your shopping.

Check out as they usually have good deals or use the Circle App when you shop at a store like Target to save money.

2. Set Aside Money Each Month


Ideally, it’s best to set aside money each month for Christmas starting in January of each year. However, even if you haven’t been saving all year, now is still a great time to begin. If you saved $200 in September, October, November and early December, you’d have $800.00 to spend on Christmas.

Two hundred dollars might seem like a lot to save each month, but you can easily find ways to save money each month by choosing not to go out to eat, selling something of value in your home or simply working a few extra odd jobs every month for the next few months.

Remember, it’s much more fun to go Christmas shopping with cash in your pocket than to charge it on a credit card and hope for the best.

Don't have a holiday spending plan for the upcoming Christmas season. Here are 3 ways to establish a plan so you can save money on gifts this year.

3. Stick to the Plan


What’s most important in all of this is that you stick to the plan. Having a holiday spending budget is just like any other budget; it’s easy to go over. However, I can tell you from experience that it feels amazing to go into the New Year without having a debt hangover from Christmas.

The best way to stick to the plan is to prepare for extras and work that into your Christmas budget. So, if you think you might be invited to a few holiday parties, make sure you add a few bottles of wine to your list for hostess gifts. If you’re worried someone at the office will give you a gift but you won’t have one to give them in return, factor in the cost of extra Christmas cards and a few holiday candles.

Planning, above anything, is your friend when it comes to this upcoming holiday season. It’s coming fast, but since it’s September you still have time to make this holiday season a financial success.


Do you have any tips for staying on budget this holiday season? What are some unexpected holiday expenses people should look out for? How much do you plan to spend this holiday season?


The following two tabs change content below.
Catherine Alford is the go to personal finance expert for parents who want to better their finances and take on a more active financial role in their families.


  • Emily Jividen says:

    I just wrote about this. One of my suggestions was adding to your cash stash by checking to see if you have credit card rewards you aren’t using. Almost 1/3 go unused, and Hubby had a bunch he turned in for gift cards that we’re saving for the holidays.

  • Money Beagle says:

    We actually plan for holiday spending all year around, throwing $100-150 aside every month which completely pays off any and all bills come January.

    But if you haven’t started yet, it’s never too late (well until December 26th anyway *lol*).

  • Amanda @ centsiblyrich says:

    Great tips! Planning ahead is really crucial to keeping holiday spending in check. I always bank our cash back credit card rewards to use for Christmas. We don’t tend to spend much (we do a lot of hand made gifts), but the credit card rewards more than cover the spending we do have.

  • Jayson @ Monster Piggy Bank says:

    Very easy to do tips! I am planing to stick to my budget no matter because that is what can help me in the long run.

Leave a Reply

Your email address will not be published. Required fields are marked *