Holidays on a Budget: 12 Tips To Make End-of-Year Cheer Affordable

• When connected with the right resources and budgeting tools, it is possible to enjoy the holidays on a budget.
• There are multiple ways to save on holiday decor, winter activities, and holiday gifts. 
• When budgeting for the holidays, don’t forget to plan ahead—both for holiday spending and next year’s expenses.

The holidays should be a time for family, winter cheer, and cozy evenings—not breaking the bank. Yet, many holiday traditions come with a high price tag, leaving many of us with a catch-22: spend more than we feel comfortable with or forgo giving gifts and participating in holiday activities. 

Fortunately, there is a third option: enjoy the holidays on a budget. To help lower costs this holiday season, we compiled free resources, low-cost winter activities, and the best holiday sales and coupon apps. Continue reading for these resources, as well as insight into how to create an effective holiday budget. 

December is a wonderful time of year to make memories with family…and to go into credit card debt. To avoid the latter, determine financial goals (and budget) for the season ahead of time. Holiday budgeting consists of looking at spending habits, last year’s budget, and how much was actually spent last holiday season. Any set holiday costs or items currently on the holiday shopping list can also be factored into the budget.

After reflecting on last year’s holiday spending and this year’s holiday shopping list, write down a specific maximum amount for holiday expenses that’s comfortable. That number is the cap for all holiday purchases. 

However, creating a holiday budget and sticking to it are two different things. For the latter, it may help to utilize a free budgeting app or spending tracker. Some free options include:

• Envelope method: set aside money in envelopes marked for specific purposes, such as gifts or travel. Whenever someone spends in an envelope category, they take out money from the envelope. When there isn’t money left, there’s no budget left for that category. This method makes it visually easy to see how much is left in the budget and to avoid overspending on credit cards.
• Piere: for a more tech-savvy approach, check out this free budgeting app. Piere lets individuals track everyday expenses, see how much is in their bank account, upload credit card statements, and create budgets for specific purposes, such as holiday spending.
• Budget spreadsheet: Notion, a free planning platform, offers a wide variety of budgeting templates. There is a learning curve with Notion, but the templates can also provide inspiration for a budgeting spreadsheet on paper or another computer program.
• Christmas Club: some banks offer a Christmas club, a themed sinking fund where someone sets aside money throughout the year.

Once the budget is set (and checked twice), it’s time to make the most of it. To do so, we compiled some tips on how to save on food and decor during the holiday season. 

Host a Potluck Instead of a Formal Dinner

Purchasing ham, stuffing, dinner rolls, cookies, and eggnog can be expensive for one person. Instead, have everyone in the family pitch in and bring one dish. A potluck is a cost-effective way to enjoy a holiday dinner without putting all the financial burden on one family member. 

Bake Christmas Cookies

For many, cookies are a staple of the holiday season. But buying gingerbread men or frosted sugar cookies can add up. For a more affordable alternative, bake cookies at home instead of buying premade ones. Plus, cookie baking is a fun way to bring friends and family together. 

DIY Holiday Decorations

Americans spend over $63 million on holiday decor each year. To cut back on holiday spending, consider making some decor at home. There are plenty of great ideas on Pinterest and YouTube. For inspiration, check out these videos:

• 30 DIY Christmas Decor Ideas
• Easy DIY Hanukkah Decor
• 12 DIY Kwanzaa Decor Ideas
• Dollar Tree DIYs for Winter Decor

Reuse Decorations

Along with creating decor, it’s also cost-effective to reuse decor from holidays past. For those who recently moved or don’t have much holiday decor at home, head to a local Goodwill, Salvation Army, or thrift store to browse their decor section.

During the holidays, the world shines brighter. There are cozy holiday movies, Christmas lights in neighborhoods and cities, and plenty of winter activities. However, some activities, like paid Christmas lights displays or local Christmas plays, can become expensive quickly. If on a budget, try out these safe and free winter activities.

Tour Free Christmas Lights

While there are holiday light shows to pay for, many great displays are free. Driving or walking around a local neighborhood in the evening is a great way to soak up the holiday cheer. 

If interested in driving or commuting to a larger light display, head over to christmaslightguide.com. This website can help locate free but impressive holiday light displays in your area. 

Check for Events Hosted by a Local Town or Religious Organizations

Many towns, local communities, and religious groups host free or low-cost holiday events, such as a tree-lighting ceremony or visits with Santa. A nearby community center may also host a holiday-themed bingo night or a local synagogue may offer a free Hanukkah dinner. 

To find free local events, start by visiting local towns’ websites or looking at a community activity board. It may also be beneficial to visit (virtually or in person) nearby religious groups or community centers to see if they are hosting any interesting holiday activities. 

Visit Outdoor Holiday Markets and Festivals

Along with free events hosted by towns or religious organizations, many chambers of commerce and other groups host holiday markets or festivals. To jumpstart the market and festival search, here are a few online directories:

• German Christmas Markets: this list consists of German Christmas markets in all 50 states
• Yelp’s Directory: Yelp isn’t only for reviews. They also have a robust directory of holiday markets across the US.
• Best Christmas Markets: this list is smaller and more geographically restricted, but these holiday markets may be worth checking out. 

Volunteer at a Local Charity

Focus on giving back during the holiday season by volunteering at a local charity or soup kitchen. Not only is it free, but it’s also a way to show gratitude and give your time back to your community during the holiday season. 

While the look on loved ones’ faces when we give them a holiday gift is priceless, the cost of presents is not. To cut back on the cost of holiday gifts, organize a Secret Santa gift exchange, shop sales, use coupons, and/​or create homemade gifts. 

Do a Secret Santa Gift Exchange

Instead of buying gifts for every family member and friend, organize a Secret Santa exchange where everyone buys one gift for one person. For an extra budget-friendly option, make it a White Elephant Gift Exchange. 

For a White Elephant Gift Exchange, everyone wraps a present (regifted or new) and puts it in the center of the holiday party. All guests then draw a number, and the person who pulls one picks a gift first. After, everyone else has the option to steal someone else’s gift or pull from the wrapped gifts in the middle. 

Shop Sales

It’s hard to get through the holiday season without spending. When you shop for gifts, shop sales, including Black Friday and Cyber Monday. Places with the best deals include:

• Walmart Holiday Shopping and Meals: Walmart often has one of the best holiday sales, which started in October and will run through the end of the year.
• Target’s Affordable Holiday Deals: to make shopping more affordable, Target has vowed that over 50% of their toys will be less than $20 and 80% of their holiday items will be less than $10 per item in 2024.
• Costco Holiday Savings: Costco is also committed to providing affordable holiday gifts, decor, and meals throughout the season.
• Angel Drive: each year the Salvation Army provides free gifts to children whose parents meet certain income requirements. 
• Customized Sources: individuals who are part of a government program may be able to ask their case worker about local gift drives. These programs can be similar to Salvation Army’s Angel Drive and may provide free or low-cost gifts. 

Use Coupons

Alongside holiday savings programs, it’s possible to cut back on spending by utilizing coupons. A recent study suggests the average American family could save $122 a year if they used coupons. There are even apps, such as Ibotta and ShopSavvy, that can scour the internet for the best coupons and cashback deals.

Create Homemade Gifts

Similar to DIY decor, homemade gifts can help save money. Crafty gift-giving is an affordable, thoughtful way to show loved ones that they matter. Sweaters, hats, tins of cookies, and homemade ornaments are some of the most common homemade gifts (and the easiest to make). 

When trying out these holiday-saving ideas, remember to plan ahead. One-third of holiday purchases in the United States are impulse purchases, usually purchased at the last minute. When someone puts off shopping until the last minute, they’re more likely to spend more or buy unnecessary items. Instead, plan ahead. Schedule time earlier in the holiday season to buy gifts and decor. 

Life gets busy during the holidays—and it can be hard to plan ahead for the new year. While it’s okay to put off setting goals until January, enrolling in a Healthcare Marketplace plan or Medicare plan should probably happen before January 1^st. Open enrollment is November 1^st through January 15^th for Marketplace plans and October 15^th through December 7^th for Medicare.

When navigating healthcare options, there are resources to help save costs and get the best coverage. To speak to an unbiased insurance expert about Medicare or the Children’s Health Insurance Program (CHIP) options specifically, contact your state’s Medicare agency.