The One Budgeting Tip Experts Swear By When Gift Shopping

’Tis the season to spend! Overdoing it in the name of delighting your loved ones happens — a lot. But if you’re looking to stick to a budget or refrain from draining your savings when treating your nearest and dearest, the smartest thing you can do is to make a plan now. Think of it as essential pre-work to setting yourself up for holiday gifting success. You’ll need to create a budget, whip up a realistic gifting list, and make use of resources like credit card points and browser extensions, but in the end, you’ll emerge with the perfect gifts for everyone on your list and won’t have to stress about your finances come January. 

Ready? Here are some tips for putting that prep work in place and into action, according to financial exports.

You may have an idea of how much you want to spend on presents this year, but look beyond just gifts when considering a holiday budget. Plan around the entire season so you get a better understanding of your finances. 

“Create a full holiday budget, and include any cost you anticipate outside your normal spending — like gifts, travel, pet boarding, more lavish groceries, and decorations,” says Anuj Nayar, financial health officer at LendingClub. “Laying out a budget in advance can show you what you can afford and can help guide your choices.” 

If you’re spending more in certain areas during the holiday season, it could be a sign to cut back in some places and designate more cash flow in others. For example, maybe you want to limit your decor fund in order to beef up your shopping budget.

After you’ve nailed down your budget, Colleen McCreary, Credit Karma’s consumer financial advocate, recommends making a list, Santa-style, of everyone you’re planning to buy gifts for. “Once you have determined those two things, divide the total amount you are free to spend by the number of people you plan to buy for and you’ll have the average amount you can spend per gift, per person.” Figure out what you can afford to buy for each person, and stick to that list whenever possible. 

Ideally, you might even begin gift shopping several months before the holiday season to make budgeting over a few months easier. “I personally start my Christmas shopping each year in September so I can spread out the purchases across several months and remain financially comfortable,” says Chelsea Barrows, CFP at Facet Wealth. “Plus if I finish early, it’s that much more time with pretty wrapped presents under the tree!”

Haven’t begun yet? No problem — dive in now!

If you tend to swipe your card willy-nilly and never check your balance, opting in for alerts and notifications from your bank can be a helpful way to rein in your spending. “By setting up spending notifications with your bank, you get emails or text notifications every time you spend. This can help you be more conscious of your spending habits since you get a ping every time you’re taking money in and out of your account,” says McCreary. “This can be overwhelming for some, but can otherwise be a good tool to help you be more thoughtful about your spending.”

Chances are you have credit card points and miles you’re not using — now’s the time to take advantage! “An estimated $100 billion worth of loyalty program points go unredeemed,” says consumer expert Regina Conway at Slickdeals. “The holidays can be a great time to tap into some of those rewards.” Conway recommends using your balance to buy gifts or book holiday travel, therefore saving a little extra cash. “It may cost more in points than in dollars, but if you’re looking to save on your budget, now may be the time to cash in.”

McCreary agrees: “If your credit card helps you rack up points as you spend on everyday purchases like groceries and gas, use them — that’s what they’re for!” says McCreary. “Sometimes credit card points can help you purchase the newest gadget or gift cards to your favorite online stores. Call your credit card company or go online to see what you can get with your credit card reward points.”

Pay attention to special cash-back deals from sites like Rakuten and Honey; on certain days, you can make up to 10 percent cash back on purchases from retailers like Old Navy. “Previously, cash back rewards were reserved for credit cards available only to those with excellent credit. Now, in addition to credit cards, there are various ways to earn cash back while you spend, which can lead to massive savings,” says McCreary. The browser extension will give you a heads-up on savings deals and scan for coupons, and you’ll get a check back with your savings after a certain period of time. 

“If you were already planning on spending the money, you might as well take the extra step to get some cash back — that way you can earn while you spend,” she shares. “Even if that means a few dollars here and there, that can really add up over the course of the holiday season.”

As the season goes on, look inward. It’s so easy to get swept up in the consumerism and “buy buy buy” mentality of the season, but hit the pause button when you feel like you’re about to blow your budget. “When you find yourself in a situation where you’re spending to keep up with friends or family, take a step back and think about whether you’re spending money on something just because everyone else is or if it’s something you genuinely wish to buy,” advises McCreary. “If you are spending to keep up with others, reconsider the purchase. Your wallet will thank you.”

Brean Horne, personal finance expert at NerdWallet, agrees. “Retailers can be good at enticing people to buy with extra deals and discounts if you spend a certain amount,” she shares. “Shops are cleverly designed to encourage impulse shopping. [T]he placement of displays to lighting and even the type of music are carefully selected to get you to spend more. This can be referred to as the ‘shopping momentum effect,’ when an initial purchase provides a psychological impulse that enhances the purchase of a second.” Resist the urge to overbuy and stick to your list! 

And always remember: You’re not required to give a physical gift during the holiday season; giving experiences or sharing your time can be just as meaningful and thoughtful, if not more so. “Gifts should be personal, but they do not need to be material,” says Barrows. “Consider donating your time to babysit or pet-sit for free. If you have healthy plants, gift cuttings that people can watch grow all year-round. I am also a huge fan of making donations in a loved one’s honor to their favorite charity or cause  — and they don’t need to know whether you donated $5 or $500.”