3 Budgeting Tips That Can Help You Reduce Holiday Stress

Updated Oct 31 | 5 minute read

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We all want our holiday gatherings to go just right. And while love, togetherness and making memories are what the season's all about, these intangibles that money can't buy still seem to make a dent in our budgets. In fact, a 2024 survey found that 73% of Americans say financial stress takes away from their enjoyment of the season.

One big culprit is last-minute spending. Whether it's paying a surcharge for holiday travel because you missed out on the sale or springing for same-day shipping on a gift you waited too long to buy, the holidays are a minefield of opportunities to go over budget.

But with some smart planning and organization, you can get ahead of these costs and make the holidays amazing without any post-season financial regret. Here are some top categories for holiday spending and ways to plan to get those costs down.

1. Travel

Transportation is the most expensive holiday category, with those who travel spending an average of $846, according to that same survey. That's not including other expenses while on the road. And while holiday travel costs can be unavoidable, there are ways to save if you plan ahead.

Organizing dates

One thing that can delay travel planning is organizing dates and vacation time, so get started on this as early as possible. Also consider whether you absolutely need to travel during peak times. While some families have strong seasonal traditions that mean there's not much flexibility, others would be just as happy to take a family beach getaway in January at a lower price.

Plane tickets

Plane tickets are a big-ticket expense, so it makes sense to shop for deals. And the closer you get to the holidays, the less likely you are to find one. According to recent data, the cheapest domestic Thanksgiving flights are available 45 days ahead of time (that would be October 13 this year), while Christmastime flights tend to be cheapest 58 days ahead (meaning late October). Have your plans set by early October and start looking for good prices so you can buy when they appear.

Air travel extras

Checked baggage, slow taxis, mediocre sandwiches and outlandishly priced bottles of water: Travel costs don't stop once you've bought your tickets. Plan to keep these expenses under control, such as by going carry-on only (skip any liquid gifts), recruiting a friend to shuttle you to the airport (remember, ask early and nicely!) and packing your lunch and empty water bottles (refill after going through security).

Destination expenses

Hotels love to keep you guessing. Because it's linked to demand, dynamic pricing means the same room can cost less on Monday night, more on Tuesday morning and double by the weekend. For holiday travel, your safest move is to book early. If you can, choose a refundable rate so you're free to grab a better deal if one pops up.

As for other expenses, it helps to be the planner. Take charge of booking any group meals, transportation or activities and you'll also be taking charge of the budget. That doesn't have to mean fast food for Christmas Eve dinner—unless that's your family's vibe!—but there is room to save. After all, the reason for the season is not fancy tablecloths and pricey bottles of wine.

2. Get-Togethers

Holiday get-togethers are a key element of the season, so it's no wonder they're part of the second-highest spending category, with Americans spending an average of $658 on things like food, parties and outfits. We're not suggesting you ditch all that in favor of a frozen TV dinner. But there are ways to make gatherings more affordable.

Holiday food

There are a couple of key tricks to saving on groceries. First, shop early to find deals on the things you want, such as by using online flyers to scout the best price on essentials like turkey.

Second, plan to shop without a detailed plan. Rather than strictly sticking to your ingredients list, plan your meal based on what bargains are available.

Another smart strategy is to make things ahead of time. Prepping pie crusts in October and stashing them in the freezer will not only get you ahead of the game, but also prevent last-minute ready-made crust purchases.

Holiday décor

It's nice to see the house all decked out for the season, but it doesn't have to be straight out of Architectural Digest. Stick with the decorations you already own—organize them early to spot any must-fill gaps—and add budget-friendly homemade touches like old-fashioned popcorn garlands for the tree and trimmings from your yard for table centerpieces.

If you prefer to buy new, shop the post-holiday sales to get a jump on next year. Perhaps consider starting a high yield savings account to help get a head start? (That's really planning ahead.)

3. Gifts

Kids and partners are the highest-priced recipients of purchases in the holiday gift category, which hits an average of $560. But there are plenty of other potential giftees, from teachers to coworkers to that one cousin who always invites himself to dinner. Planning your gift buying can help you in two ways: by getting lower prices on the things you want, and finding alternatives to buying gifts at all.

For example, does your extended family or friend group exchange gifts every year, only to add one more thing to everyone's to-do list? Suggest an alternative, like Secret Santa with a price cap or a joint charitable donation.

Gifts of time and presence are valuable, too. Yes, kids like to unwrap stuff. But they'll also love "gift certificates" for things like an afternoon playing Lego together or pancakes for dinner.

Get Planning and Start Saving

The holidays can be a busy and stressful time, and it's only natural to whip out your credit card to get something off your to-do list. But with some smart planning and creative decision-making, you can stick to your budget and be ready to start the new year on the right financial foot.

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