Web Content Viewer


6 Ways to Stick to a Holiday Budget

Oct 28, 2021 5 min read Eric Rosenberg

Key takeaways

  • Planning ahead now can help you follow your holiday budget and save later.
  • Saving a specific amount every week or month can help you avoid holiday-related debt.
  • Discount shopping apps and savings websites can lead you to the best deals.


The holiday season is a fun time of the year, but it can also be expensive. Between gifts, meals and travel, it’s easy to spend more than you plan. These six tips can help you stick to your holiday budget.



  1. 1. Use a dedicated savings account

    Savvy savers plan for holiday spending all year. A dedicated savings account is perfect for setting funds aside for Christmas, Hanukkah, Kwanzaa and other holidays. You can set up automatic weekly, biweekly or monthly transfers from your checking account (or direct deposits from work) to cover planned holiday purchases.

    For example, if your holiday budget is $600, you may want to contribute $50 a month or $25 per pay period to your holiday account. For many, a high-yield bank savings account is one of the best places to keep holiday funds secure. These accounts are government insured, so your money isn’t at risk. Their interest rates may not be as good as on investment accounts, but they typically earn a 1% return compared to an above-average but regular savings account (0.4% yield).1

    PwC forecasts that consumers will spend about $1,447 on gifts, travel and entertainment this year—up more than 20% from last year.2 However, with a dedicated account, you can adjust your spending accordingly. You can also choose to spend less now and apply funds toward unexpected bills, or carry over the savings for the next holiday season.


  2. 2. Track every expense

    Good budgeting is a year-round process.3 It’s wise to plan with a realistic holiday budget, including expenses. You can track every holiday expense in a dedicated category, so your budget doesn’t catch you by surprise. Include meals, decorations, wrapping paper, cards, postage and travel in your budget.

    Automated budgeting apps track and categorize purchases you make with a debit or credit card. You can create a holiday category to track related spending.


  3. 3. Make a list (and check it twice)

    You don’t need to channel the ghost of George Carlin to know that when you walk into a grocery store hungry and without a list, you may spend more than you’d planned. (Canned cans?) The same goes for your holiday budget. Following a list helps you avoid extra spending and impulse purchases.

    Whether you’re headed to a bricks-and-mortar store or prefer to do everything online, only add planned items to your cart. According to the U.S. Census Bureau, retailers earned over $30 billion in profits from the 2019 holiday opens in a new window season alone. A good portion of those profits likely came from unplanned spending.


  4. 4. Find the best deals

    Most people won’t intentionally buy something if they know they can find it cheaper elsewhere. You may be able to save a bundle by shopping around.

    Instead of making a list and heading right to your favorite store, consider spending time comparing the cost with other large retailers. Beyond certain items where the manufacturer enforces specific pricing, most sellers can set their prices. That gives you room to save.

    If you want to stack your savings, you may find discounted gift cards for large stores, which you can buy in advance to save when you make the final holiday purchase. For online buying, consider shopping portals to earn cash back or other rewards. Many airlines have their own portals where you earn miles, hotel points and other rewards when you make a purchase or sign up for a participating service. Some hotels and credit cards have their own portals as well.


  5. 5. Use high-tech tools, sites and apps for savings

    Paper coupons regularly offer grocery store savings, but modern apps and browser plug-ins can help you do even more. For example, some browser extensions—and similar plug-ins offered by certain banks—automatically search and test coupons for you or alert you if you’re getting the best deal. Among them:

    • Honey automatically tests coupon codes at online checkout pages. At participating stores, you can get cash back, too.
    • Camelcamelcamel tracks product prices on Amazon. You can look up a product to see if it was cheaper in the past.
    • Slickdeals is the home of forums where users post great deals for others to share in the savings.

  7. 6. Avoid holiday debt

    If you don’t have enough savings, it’s tempting to use a credit card to make up the difference. However, most people shouldn’t go into debt for the holidays.4 Besides paying off the purchases, you could wind up with interest that makes your holidays cost even more.

    Steer clear of payday loans and other high-rate debt as well, and avoid rent-to-own stores that charge you on an installment basis. You may be able to own the item immediately, but the final purchase price could be as much as three or four times the retail cost. You’re better off buying with cash from a major retailer.


What you can do next

Create your holiday budget for the year as soon as you can. Open a dedicated holiday savings account, and set up recurring automatic contributions. Start using apps, high-tech tools and sites to automatically find the best deals on the market.


  1. 1 Elizabeth Gravier, “High-Yield Savings Account Rates Are Dropping, But They Can Still Earn You Over 12X More Money Than the National Average,” CNBC, Feb. 26, 2021
  2. 2 “Will this holiday sparkle? Consumers are ready to bring the shine,” PwC, Oct. 21, 2020
  3. 3 Heather R. Johnson, “Stay Financially Healthy with an Annual Checkup,” Prudential, Aug. 25, 2021 (prudential.com/financial-education/regular-financial-checkup-benefits)
  4. 4 Sheila Olson, “7 Tips for a Debt-Free Holiday Season,” Prudential, Nov. 3, 2020 (prudential.com/financial-education/debt-free-holiday-season)


For Compliance Use Only:1042852-00002-00

If you secure tomorrow, you can enjoy today.

Help make sure your loved ones are protected if something happens to you, with Prudential Life Insurance.

Get a Free Quote

Web Content Viewer


Find What Interests You

Web Content Viewer


Web Content Viewer


Web Content Viewer