featured image by kristen kilpatrick 

As I personally recover from my turkey and pie-induced food coma, I’m ready to shift my focus to the December holidays. I love this time of year because it gives us a platform to give thanks, spread joy, and celebrate with loved ones. But the holidays can also be stressful on our wallets. As the platitude goes, ‘tis the season for giving. And since giving is often synonymous with spending, many of us will find ourselves in a financial rut come January 1. And trust me, nobody wants to start the new year with a fresh pile of debt. Keep scrolling for the holiday budgeting tips that will enable you to enjoy the season and spoil your loved ones without putting too much stress on your wallet.

image by lark & linen

1. Create a list of holiday expenses.

This list should include any seasonal expenses you expect to incur outside of your normal day-to-day life. Start by writing down everyone you need a gift for this year. Don’t forget teachers, colleagues, and others outside your friend-and-family circle. Also be sure to consider holiday cards, wrapping paper, ribbons and shipping fees. If you’re hosting any special parties or dinners, account for the groceries or decor you may need. Holiday travel and charitable donations should also be included on this list.

image by andrea posadas for apartment 34

2. Set your spending limit.

Over at ModMoney, we’re all about setting a flexible budget that still allows you to spend money on the things you love. If you already have a personal budget, consult it to help you determine what you can spend this month without dipping into emergency savings. If you haven’t created a budget, this back-of-the-envelope approach will work.

Start by taking your after-tax monthly salary and deduct the living expenses you pay every month. Think rent, car payment, phone bill, groceries, etc. Also deduct payments you need to make toward student loans or credit card debt. The resulting number should give you a sense for what you can spend this month on discretionary holiday purchases. Using this number, assign a spending cap to each of the items you listed in step number.

image by mode and the city

3. Use technology to shop within your means.

The beauty of this digital world is that there’s an app for everything—including sticking to your budget. If you’re purchasing gifts online, sign up for cashback sites like Ebates and Mr. Rebates to get money back when you shop. And don’t forget to use coupon codes! Honey is a browser extension that automatically applies the best promotion at checkout. These apps are even useful beyond online shopping. If you’re shopping in-store or going out to eat, Dosh is my go-to app. Before heading to the grocery to prep for cozy winter meals, download Ibotta to get money back when you scan your receipt. All this extra cash will give you cushion if you happen to exceed your budget. Because it happens to the best of us.

image by lullu dress

4. Use the right credit card.

I often recommend using cash when you’re prone to overspending because it’s just too easy to swipe a credit card. But in the case of holiday shopping, a cashback card makes a lot of sense if you use your credit wisely.

My most-used credit card is the Chase Freedom Unlimited, and the holiday season is a fitting time to get one. The card has no annual fee and offers 1.5% cash back on every purchase. You will also earn a $150 bonus if you spend $500 in the first three months, which is easy to do during the holidays. The Chase Freedom Unlimited offers purchase protection against damage or theft and extends manufacturer warranties by one full year. So, if your smartwatch breaks right after the warranty expires, you’re covered. The best part about this card is that Chase is offering 0% APR for the first 15 months. That means you can pay off your holiday purchases over the course of a year without paying interest. Just make sure you pay your full balance before this intro period ends!

image by sunifty

5. Track your spending.

As you cross off items on your holiday list, make sure you track your actual expenses against your budgeted expenses. This step is critical to a successful budget. If you happen to overspend on one gift, then you’ll have the foresight to find a better deal or choose something more cost-effective on the next. At the end of the month, reflect on what you spent this season. While it’s fresh in your mind, use that information to start planning for next year. If you end up spending $750 this season, make a concerted effort to save $62.50 per month starting in January into a separate holiday savings account. Come December 2019, you’ll be in perfect shape for a stress-free season of giving.

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Comments (7)
  1. 1
    Lucie November 24, 2018 at 3:46 pm

    This is definitely a challenge for me at the moment! I’m really happy right now because I found a gift that works for both my brother and his girlfriend, it’s a great gift and it didn’t cost me as much as I thougth it would so that’s a really good start… I think getting together with other people to make one bigger present is also a good option because the cost is divided and you can also offer a bigger present than if you were alone!



  2. 2
    Erica | ModMoney November 25, 2018 at 1:06 pm

    Thanks for reading, Lucie! I love the idea of a group gift, or even a “Secret Santa” exchange among groups of friends or family. Happy holidays to you!


  3. 3
    Janet M Fazio November 27, 2018 at 12:56 pm

    I’ve been so stressed this year about holiday gifts. I really like the idea of putting something away each month for that so it’s not such a big deal come December.

  4. 4
    Melanie November 29, 2018 at 10:48 am

    We planned our Christmas shopping into our monthly budget which has helped a lot! We also are trying to convince family to do a gift exchange/Secret Santa type thing where each person only has to buy for one other person. It’s made a huge difference so far. I used to spend over $1,000 a year on gifts just due to the size of my family, and this year I’m only up to $300 and have almost everything already purchased!

    • Camille Styles November 29, 2018 at 12:00 pm

      That’s such a great idea – I love the thought of choosing one really special, thoughtful item to gift to your Secret Santa instead of buying lots of little items for tons of people that could easily get lost in the shuffle.

  5. 5
    Natalie Redman December 12, 2018 at 10:47 am

    Great tips!




Erica Holland