14 Ways to Save Money During the Holidays
During the holidays, many people overspend on travel, accommodation, decoration, clothing, food, partying, and other fun activities. In the end, some regret stretching their bank accounts to the limit. If you want to do things differently, keep reading to learn and discover ways to save money during the holiday season.
In this article, we will show you over ten ways to enjoy the holidays without breaking the bank, hurting your credit score, or spoiling your relationships with your loved ones. Are you ready for a thrilling experience? Let’s get down to business!
14 Ways to Save Money on Holiday Spending
Below are 14 smart ways you can minimise the cost of celebrating the holiday season. Although you may not find all the ideas suitable for your lifestyle, we are sure that some of them will work magically. They can enable you to create beautiful and memorable experiences with those that matter the most to you during and after the holidays.
1. Start with a holiday budget
A fundamental principle for preventing overspending is creating a budget that clearly and realistically shows where your money will be going. Therefore, you should plan for your holiday spending by starting with a manually or electronically prepared personal budget, which must include expected expenses on groceries, clothing, gifts, travel, accommodation, and decoration. Moreover, with a budget, anyone who is disciplined can overcome the temptation to buy every attractive product that they come across.
2. Choose the most rewarding credit cards
The holidays are not the time to pick just any credit card for your purchases. That is because there is usually so much to buy, and using the wrong credit card is likely to lead you into huge debts, especially if you end up spending above your means. Instead, you should choose only cards that come with the most rewards for your patronage. They include 0% interest credit cards, low-interest credit cards, cashback credit cards, travel credit cards, and airline rewards credit cards. In that way, you can save money on your holiday expenses.
3. Use money-saving apps
Following the digital transformation in banking, there are now many mobile apps that can help consumers automatically save money. They work for several financial operations, such as budgeting, savings, bill splitting, money transfers, and investment.
When you use the best money-saving apps, your spending becomes effortless, and you get perks in the form of cashback, crypto back rewards, airport lounge discounts, fee-free foreign transactions, free cash withdrawals at ATMs, phone insurance to cover accidental damage or loss in transit, international travel insurance for couples and families, medical insurance up to a certain amount, and a lot more.
Here are examples of the best apps for saving money during any season:
Revolut (Best for cashback on your expenses and airport lounge discounts)
Starling Bank (Best for no foreign transaction fees)
bunq (Best for travel assistance)
Monzo (Best for international travel insurance for couples and families)
Wirex (Best for crypto back rewards and crypto-to-fiat-money conversions)
Nexo (best for travel rewards on a crypto card)
4. Avoid unnecessary expenses
The holidays do not last forever, but for just a while. Therefore, it is not too much to advise that you cut back on spending on extras or unnecessary purchases this season in order to save some money. For example, if you used to spend €10 per day on things you know you can live without, you could save up to €300 by denying yourself such pleasure for a month or two this season (assuming you were able to abstain for 30 days). This money can be spent on gifts.
It is also helpful to have a shopping list for the holidays if you want to be serious about avoiding unnecessary expenses. Ensure that every important decoration material, gift, grocery item, or other material you would like to use in celebrating the festivity is included on that list. Next, avoid the temptation of purchasing items that are not on the list, which could come from impulse buying. This can be difficult, we know, but it is possible to put in such effort. However, if you see a need to increase the items on your holiday shopping list, it is okay to add a few. The main idea here is to spend only on what you need.
5. Limit your gift giving
You can save money during the holidays by not buying gifts for people who are not your family or close friends. You have no obligation to buy gifts for your neighbours if doing so will deplete a significant portion of your savings. Do not try to impress everyone in your community by sharing multiple gifts with them; instead, set a limit and stick to it. For if you run out of savings in the process of trying to be the "hero" or best Santa of the year, you might end up becoming a burden to the same people you impressed if things later get worse and you start to ask them for help.
6. Shop early
One of the tips for avoiding overspending during the holidays is to start shopping early enough. In accordance with this, you should have created your budget prior to the day you intend to make the purchases. Also, remember that gifts might be delayed due to supply chain choke points, and prices are likely to increase during the holidays as demand rises.
Everyone on your shopping list will have a chance to get their fair share of your holiday budget when you shop early. Besides, by doing so, you allow enough time to find the gifts that they will like.
Some people begin shopping for the holidays on Black Friday and Cyber Monday. You could do the same every year since that is the time of huge discounts from major online and in-person stores in different parts of the world.
7. Undertake comparison shopping
Comparison shopping is a great way to save money if you want to buy expensive items, such as electronics. While such expensive gifts are not often shared during the holidays, you can plan to surprise a friend or family member with one. Whatever your reasons might be, take some time to compare the prices and quality of items at different stores before making a payment for the cheapest.
8. Plan your travel in advance
Holiday travel is typically not cheap, but you can cut costs if you prepare ahead of time and keep a flexible mind. Before purchasing an airline ticket, do some research on prices and the most affordable days to travel, or if feasible, take a bus instead of flying. By doing this, you will have saved more money for a rich holiday experience than by putting it all into transportation fares.
Alternatively, you can decide to visit your loved ones after the holidays, when the cost of transport will have been reduced.
9. Home is good
It is not compulsory that you travel to visit family and friends in faraway places. If your savings will not be enough for the trip this year, you can skip it, stay at home, and find other ways to show them you love them. For example, you can order a gift item online and arrange for it to be delivered to them at their homes.
10. Reuse and regift
You do not have to buy every item on your gift list; you can reuse and regift some of what you already have. The same item that someone discards, another person might find valuable. Examine the items in your storage that you no longer require to see if there is someone who would like them. Examples of good choices for this purpose include home appliances, portable electronic devices, jewellery, apparel, new or fairly used books, clothing, and kitchenware.
11. Potluck: spread the cost of the party
It costs a lot of time, energy, and money to organise a social gathering for you and your friends to celebrate Christmas, the New Year, or any other event. Asking guests to bring something to share rather than hosting a big holiday party where you provide all the food can be a wise way to minimise your expenses. Everyone will enjoy trying the range of delicacies and exchanging recipes.
12. Send free digital greeting cards
Aside from being very cheap and mostly free of charge, digital greeting cards (or e-cards) are an environmentally friendly way to reach out to your loved ones, wherever they are in the world. You can use websites such as Greetings Island, Blue Mountain, 123 Greetings, and Punchbowl to create your e-cards for free—add your original texts and photos—and send them to your loved ones via their email addresses or social media platforms.
If you do not mind putting in a little money, you can get more than 5000 design templates without watermarks when you pay €2.45 monthly for premium access on Greetings Island.
13. Share your handiworks
Some of your loved ones could appreciate your original handiwork over anything bought from the store. Hence, you can save money during the holidays by knitting, carving, sketching, scrapbooking, or baking something adorable and appealing for your family and friends. While you may not have any of the skills aforementioned, it is okay to be creative in your own way. The goal is to create your work and share it with those who will appreciate it.
14. Go for quality experiences
An increasing number of families are foregoing gift exchange entirely in order to enjoy the holiday season. They spend time discussing the genuine meaning of the holidays while keeping their financial lives in good order. The Yuletide and other festive seasons can be a good time for you to think about your religious beliefs, volunteer in your community, reunite with loved ones, show kindness toward strangers, or do something new for the love of humanity and the environment. Such things do not usually cost a lot of money.
Bonus: Tips for Budgeting Like a Financial Expert
Aside from showing you how to save money during the holidays, we would also like you to know the basic principles of budget planning. This is especially useful to everyone, including freelancers, digital nomads, and even small business managers who need to learn how to plan their expenses according to their income.
The following are the basic tips for creating a budget that works before, during, and after the holidays:
The 50/15/5 rule
The 50/15/5 rule is a personal budgeting concept for managing your savings and expenditures. It requires you to set aside 50% of your take-home pay for meeting essential expenses (such as housing, food, health care, and transportation) while keeping 15% of your income before tax (including employer contributions) for your retirement. Next, you must set aside 5% of your after-tax income for emergency expenses, keeping it in a short-term savings account.
The 80/20 rule (The Pareto Principle)
The Pareto Principle states that 80% of output or consequences come from 20% of inputs or causes. In the world of finance and business management, this principle is known as the 80/20 rule. When applied to your budget, the Pareto Principle states that you should spend 80% of your income on your living expenses and save the remaining 20% for yourself.
The 80/20 rule is similar to the 50/30/20 rule for personal budgeting, which requires that you spend 50% of your income on your needs, 30% on luxury items and other wants, and 20% be deposited into your savings account. So, the main difference between the 80/20 rule and the 50/30/20 rule is that needs and wishes are merged into one (80) in the Pareto Principle.
The 70/20/10 rule
If you did not like the 50/15/5 rule and the Pareto Principle, you can try using the 70/20/10 rule. We guess that you have already figured out how this one works. In case you have not done so already, the 70/20/10 rule requires you to budget 70% of your income for living expenses (needs), 20% for debt or savings, and the remaining 10% for your wants.
The 30-day money rule says that when you suddenly feel like buying something, allow the money to be in your savings account and postpone the purchase until 30 days later. If the 30-day period elapses and you still see the need to buy the item, go ahead with the purchase. But if you lost the desire before the testing time ended, you would have saved the money for the purchase of something else, which would be important.
There are many ways to save money during Christmas. They include creating a budget and following it, writing a list of items you want to buy and sticking to it, planning your travel in advance to get cheap fares on your flights, going potluck for parties, doing comparison shopping, getting credit cards with rewards, using money-saving apps, and many other ideas which we have shared in this post.
The Bottom Line
One of the lessons we learned from the COVID-19 pandemic is the value of spending quality time with our family and friends. As the lockdowns drew us closer to our loved ones indoors and online, we found new ways to express love, care, and affection without stretching our bank accounts to their limits. We can apply those ideas to get the most out of our festive seasons.
Additionally, in this post, we have shown you 14 ways to save money during the holidays. It is important to keep in mind that these creative options for minimising your expenses are not only for the Christmas and New Year holidays; they can be applied to any national or international holiday. Besides, some of them work as general principles for personal budgeting and savings. We hope that you will find them useful as you take your financial situation to the next level.