6 Smart Ways to Approach Holiday Spending (Without Turning into a Grinch)

holiday mall shopping

The holiday season is a wonderful time to show friends and family how much you care, but you don't want to drain your bank account in the process. Here's our gift to you: six expert strategies for smart holiday spending that prove it's not as challenging as it sounds, and you don't have to turn into a Grinch to achieve it.


Rachel Cruze, financial expert and best-selling author of Love Your Life, Not Theirs and Smart Money Smart Kidsshares her tips for celebrating without paying the price well into the new year.

1. Create a budget and make it visual. 

Santa's not the only one who's making a list and checking it twice! When it comes to creating a budget, most often you think about how many recipients you have and how much you'll likely spend on each. While that sounds simple and easy, it's actually the opposite of how you should be approach your holiday spending.

First, Cruze advises, think about the sum of money that you can comfortably afford to spend and go from there.

"Make it visual, whether you use an app, a computer, or just a sheet of paper," the financial expert recommends. "Figure out your amount first, and then make a list of everything you'll spend on during the holidays: gifts for every person, a new dress if you want one for a holiday party, a gift for the hostess, holiday decorations. You want to include absolutely everything that you'll spend on this season and assign each a dollar value."

It makes sense (and cents!) to tackle the daunting task of gift purchasing from this perspective rather than the other way around, which could leave you spending far more than you can afford.

2. Don't spend to save.

We're all accustomed to looking for a great deal, but don't let a "sale" cause you to spend more than you planned.

Cruze acknowledges that it's tempting to take advantage of those "Spend $100, get free shipping!" offers, but if you were only intending to spend $30, maybe it's worth just paying the $5 or $8 for shipping and keeping the rest of the money in the bank.

"If you're truly saving on something you'd buy anyway, that's great, but don't spend to save," she says. 

3. Pay with cash.

Rather than pulling out the plastic at store after store, consider bringing an envelope full of cash and paying for gifts with actual dollars rather than credit cards.

As you see those bills dwindling, you'll realize you either have to rein in your spending or you'll need to get creative when it comes to completing the rest of your shopping, she notes. 

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4. Save your receipts.

Though it might sound like a hassle, hang on to your receipts and then compare what you've spent with what's left in your budget. This way you'll know exactly where you stand throughout the season.

"This will really help you stay focused," Cruze explains. 

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5. Plan ahead. 

If you wait until the last minute, you'll be tempted to overspend just to get it all done. We've all been there, buying a cashmere sweater that's well beyond our means just to cross it off the list and get out of the mall. Don't fall into that trap this year!

Cruze also cautions of the dangers of last-minute shopping when it comes to exorbitant shipping charges that you might be tempted to pay just to get your gifts delivered and wrapped on time. 

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6. Remember, a budget gives you freedom, it doesn't limit it. 

Cruze says it's important to change your mindset. While sticking to a budget might sound like you're taking the fun out of the season, you'll thank yourself when you're not still paying for those purchases come June or July.

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