You Don't Have to Break the Bank on Christmas Gifts — Here's How to Save Money

Want to avoid accruing holiday debt? Consider setting a budget and saving ahead of time. Also, here's how to save money on Christmas gifts.

Kathryn Underwood - Author

Dec. 23 2022, Updated 11:05 a.m. ET

Two women Christmas shopping
Source: Getty Images

Christmas shopping is supposed to be an exciting and memorable time, not one that has you entering the new year with holiday debt. Although 16 percent of Americans admitted in a survey that they would be willing to go into debt for Christmas, you don't have to subject yourself to maxed out credit cards and endless recurring pay-in-four payments to complete your shopping list.

We've uncovered some ways for you to save money on Christmas gifts.

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The National Retail Federation (NRF) estimated that Americans would spend between $942.6 billion and $960.4 billion during the 2022 holiday season, which lasts between Nov. 1 and Dec. 31. While the average shopper is expected to spend a little over $800 this year, here are few ways you can be frugal while shopping for Christmas gifts.

You can spend less on Christmas gifts if you start saving in advance.

savings jar
Source: Getty Images

You can make Christmas and the holiday season less financially burdensome by planning ahead. Saving in advance for holiday gifts eases the stress of Christmas gift-buying.

It’s a bit late for it now, but a great strategy is to set aside a small amount every month throughout the year for Christmas gifts. Save $50 a month for $600 by Christmas or $100 a month for a total of $1,200.

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Find areas to cut back on monthly spending to help you free up holiday shopping funds. Saving all year helps you minimize stress and gives you time to comparison shop and wait for the best sales instead of overspending on last-minute gifts.

Here are some of the top holiday savings tips.

Aside from saving gradually year-round, here are some of the best holiday savings tips to help you get the most for your money.

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  • Save up credit-card rewards. If you use a cash-back credit card wisely, you could rack up points towards purchases or cash that can help finance your Christmas gift-giving. Lifestyle and shopping expert Lilliana Vazquez revealed to Market Realist that her “go-to card” is the American Express Blue Cash Everyday card. Their provides customers with 3 percent cash back on everyday purchases.
  • Look online for deals, comparison shop, and try price-matching when possible.

Also, check out early Black Friday deals. Many retailers like Walmart, Home Depot, and Target tend to run long-term Black Friday sales throughout most of the holiday season.

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Star Smith, a couponing expert and founder of, shared with Market Realist a few ways to cut cost during the holidays. She recommends incorporating your christmas shopping into your everyday shopping. "I shop for the holidays year round," Smith said. "I've had gifts in my gift closet and stockpile ready to go for months. I purchase items I want to give when they are at their rock bottom price and save them for later."

And when looking for the best places to make your holiday purchases, big retailers like Walmart are always a good idea, she says. "I think Walmart is leading the pack right now for gift item deals," she explained. "Their clearance items year round also help me keep my gifting closet full. The drug stores (CVS & Walgreens) also offer great deals, if you know how to maximize their rewards programs."

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Here’s how you can avoid overspending on Christmas gifts.

A couple shopping at Walmart
Source: Getty Images

Being thoughtful and strategic helps you avoid overspending on Christmas gifts. One easy tactic for saving money is to reduce the number of people you buy gifts for.

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  • Draw names so each person only buys one gift.
  • Make a family pact to only buy for kids 18 and under.
  • Try giving family gifts (more costly overall, but less per person).
  • Don’t feel pressured to buy a gift for everyone you know.
  • Opt-out of gift exchanges at work and within organizations.
A pile of presents
Source: Pixabay
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In addition to reducing your shopping list, be sure to look at your budget and determine a reasonable amount to spend on holiday gifts. You don’t need to spend the “average” amount. Instead, spend what you decide is right for you.

Overspending on the holidays often results in a spending “hangover” and credit card debt in January. To prevent this, you can also try other tips:

  • Give your time instead of monetary or material gifts. Volunteering can be much more rewarding.
  • Give homemade gifts. Vazquez shared with Market Realist that she relies on DIY holiday cards to save money. Vazquez says "you create your own card and add a sweet and personal touch by decorating plain white envelopes.” She lets her son use edible finger-paint to add a personal touch to it.
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  • Make a shopping list and stick to it (no impulse buys just because it’s on sale). 
  • Stick to a holiday budget. One carefully chosen gift can be more meaningful than a pile of gifts. 
  • Send free e-cards instead of paper cards (saving on postage as well). 

Spending on holiday gifts doesn't have to be stressful. With a little planning, you can have a Christmas that’s both happy and economical.


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