The holiday season is an expensive time of the year with Americans collectively spending more than $700 billion in November and December, according to the National Retail Federation.
But there are some ways to show your loved ones you care without leaving a gaping hole in your wallet. Here are five things to consider when you're holiday shopping on a budget.
1. Decide What You Can Afford to Spend
Sometimes it's not possible to buy presents for every person on your list, but you probably won't know this until you sit down and look at your income and expenses.
Before you hit the stores, consider calculating your take-home pay after taxes and your expenses during November and December. If you have a surplus, you might consider allocating this to your holiday shopping.
However, if you have very little money left over or would prefer to put some of it toward your savings, you might consider cutting down on expenses. You could choose to shrink the list of who you're shopping for, look for more affordable gift options, or suggest doing a Secret Santa gift exchange with your family members.
2. Look for Deals or Get Crafty
Once you determine what you can afford, consider starting your shopping early. Though Black Friday is the official start of the holiday shopping season, you might be able to find deals before then. Many stores have a clearance section and online pop-up sales, so be on the lookout for discounts.
Another option is to shop online. Cyber Monday — the biggest online shopping event of the year — takes place on the Monday after Thanksgiving. You can buy many small and big-ticket items on sale if you do your research beforehand and find out what different retailers plan to offer.
If online shopping isn't your thing, consider making gifts for your friends and family members. Personalized gifts often are less expensive than store-bought items. They can also be more meaningful because you took the time to make them.
3. Pare Down Your Holiday Party
If you throw a holiday party every year, it may be a big line item in your budget. To cut down on expenses and potentially have more money to put toward shopping, consider throwing a scaled-down version of your usual affair and making it a potluck instead.
You could also do appetizers instead of a big spread, cook everything and ask guests to bring bottles of wine, pare down the decorations and signature napkins, or organize a group volunteer event at a local homeless shelter or hospital to shift the focus from holiday partying to holiday giving.
4. Consider Getting a Temporary Second Job
Even if you've done your best and followed all your holiday budgeting tips, you may not have much room to do all your holiday shopping. Yes, you could try to cut back even more, but that may be more difficult than finding a second job to earn extra cash.
The gig economy is in full effect, so consider becoming a ride-share driver, selling items that you no longer use, babysitting for the neighbors, or leveraging your writing, photography or design skills into freelance projects that can earn extra income.
5. Resist the Temptation to Overspend
You may feel tempted to buy expensive gifts for friends or family members, especially if they often lavish you with nice things. But consider resisting the temptation and sticking to your budget instead. Everyone has different circumstances, but keeping your own financial goals in mind during this expensive time of year can be especially important.
When it comes to holiday shopping on a budget, you may want to keep in mind that it's the thought that counts. If you set a budget ahead of time, and find ways to cut down on spending or bring in additional income, you can likely have a fun and happy holiday season without overspending.