7 Smart Things to Do Now to Avoid Going Broke This Holiday Season

By Myles Leva


Last Updated: October 13, 2022



Special occasions call for special spending. But sometimes it’s easy to go overboard.

Going into this holiday season, why not plan ahead?

You can set a realistic holiday budget that doesn’t break the bank but leaves your loved ones happy. In this article, we will simply go over the money-saving tips you need for the holiday season.



What's a reasonable Christmas budget?

First of all, planning ahead allows you to be more liberal with your spending. But if you’re reading this in autumn, what is that “reasonable” amount?

In general, it’s advisable to aim for around 1% of your annual disposable income for holiday spending. If you have many relatives to cover, this amount may be a bit less than you require. However, with some additional measures (more on that soon), a bit more can be acceptable.

Christmas isn’t a cause for ruining a family’s budget. It’s fine and often fun to spend more than you normally would on it, but the best parts of Christmas can be free!

There are many ways you can avoid going broke this year - let's take a look. 



7 Tips to Avoid Going Broke - Christmas 2022

1. Be frugal where you can.

Certain things you “need” for Christmas can be made up for with alternatives.

Cards and gift wrapping are two areas that should come to mind. Homemade cards will certainly save you a lot of money. But if you’re creative, they can also be much better for the recipients. Getting thoughtful and creative can help you save money while being more impressive in many ways!

When it comes to gift wrapping, creativity also saves money. An easy option would be newspapers, but that might not be appropriate for all gifts. You can make some other inexpensive (and even attractive) wrappings out of:

  • Wallpaper
  • Tissue paper
  • Paper bags
  • Reusable fabrics
  • Baskets

Think about all the other ways you can save through creative alternatives.


2. Give the things they need.

Thoughtful gifts can be better than expensive ones.

The holidays can be a great time to help the children in the family as well. If there are some things you wanted to get them but haven’t yet, the holidays are often the right time. This can be a new pair of shoes or anything else for that matter. 

No one said Christmas should only be about the kinds of gifts you wouldn’t normally give at any other time.


3. Careful with credit cards.

Credit cards can be used to pay for regular purchases while gaining loyalty rewards, at no extra cost to you. Of course, that’s only possible when you’re careful and deliberate with credit card usage.

The holidays can be a great time to rack up air miles. Just remember to set a credit card budget before going on a shopping spree. If you can do so, you can actually end up gaining more than you lose to your credit card company.

To be safe, it’s good to balance rewards with low interest rates. Christmas is a dangerous time, and many people rack up holiday debt that sets them back for a long time.


4. …Or pay in cash.

Alternatively, if you don’t trust yourself to control your spending on a credit card, a set amount of cash is more likely to work.

This still requires budgeting, but the only difference is that you save enough cash for your holiday spending. Paper money and coins are finite, and because they exist physically in your wallet, it’s impossible to go overboard without making another withdrawal.

It’s simpler for this path to work for one simple reason: once the cash is gone, you must stop your holiday shopping.


5. Use apps.

Budget and other finance apps offer a convenient way to save.

During high-stress times like the holiday shopping spree, money-saving apps can provide several benefits:

  • A clear budget 
  • Spending alerts when you’re coming close to hitting your maximum spend
  • Rewards such as cash-back deals and discounts for shopping online
  • Finding discounts

There are general-purpose finance apps you can use, or more specific ones. A simple search on Google Play or the App Store will reveal how many options you have.


6. Collect coupons.

Coupons are still a great way to expand your holiday budget and get more for less. You can become a coupon collector easily if you browse online shops often. Just search for coupon codes ahead of time.

Similarly, comb through your mailbox and see if you have any surprises waiting.


7. Naughty or nice lists.

Well, you aren’t exactly playing Santa.

But as Machiavellian as it sounds, there is a financial logic to making an exclusive list of those you will send gifts to. Some people feel stuck getting presents for others 'because they have to.' But you don't. People who avoid going broke every Christmas know how to draw the line. 



How do I not go broke over the holidays?

As always, the answer is budgeting.

The reason people go broke over the holidays, if we are going to be blunt, is a lack of self-control. Of course, it’s easy to indulge the people we love and to be generous during the holidays. But financial discipline is still the only answer, as hard (and unexciting) as it is.

The other part of not going broke is planning ahead. The earlier you start saving, planning, and spending, the less time you will spend in a rush, and the lower the chances of sudden, regrettable spending.

Apart from these major themes, following the 7 points listed above can help you save.



You Can Avoid Going Broke This Holiday Season

Holiday spending can be reined in with preparations and good financial habits.

You can take whichever steps help you save enough money to thoroughly enjoy the holidays without breaking the bank.

Photo by Any Lane


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