Budget Better This Holiday: A Smart Spending Guide

The holiday season is full of joy – stuffing stockings, celebrating with friends and family. But with all of the scheduling, shopping, and spending, it can also bring stress. Whether you start your holiday shopping on the first of the year or (ahem) the week before the big day, you probably want to make the most of your money, optimize your spending style, and stress less. This guide, full of tips and tricks, can help you do just that.

Holiday Expenses, Explained

A big part of staying on budget during the holidays is figuring out all your expenses. It’s easy to overlook things like the cost of holiday cards and rides from the airport.

This checklist can help you earmark dollars for all of your seasonal spending:

•   Gifts for immediate family, extended family, friends, coworkers, clients, teachers, Secret Santas, your mail carrier, and anyone else. Don’t forget about sales tax and shipping.

•   Gift wrap and holiday cards (their cost counts too!)

•   Holiday decorations, such as a Christmas tree, outdoor lighting, table settings, candles, etc.

•   Holiday food and drink, including at-home celebrations and going out.

•   Travel, if you are going visiting, can involve plane tickets, getting to the airport, car rentals, parking, hotels, pet boarding, and more.

•   Other expenses need budgeting too, such as your annual Nutcracker tickets or charity donations.

Assign dollar amounts to each expense, total the figures, and determine how much of that you can reasonably spend based on your income, any money you’ve saved for the holidays, and any options you have to supplement your funds.

Quiz: Uncover Your Holiday Shopping Style

Are you the sort who stockpiles gifts months before Whamageddon kicks in? Or do you join the crowds in a last-minute buying frenzy? Understanding your holiday shopping style can help you better manage your money and avoid debt. Take this quiz to ID your M.O.:

What’s your shopping style?

Take this 30 second quiz to find out.

The Early Bird Shopper

If you start your holiday shopping before spring, plan and budget meticulously, and enjoy the victory of scoring a great discount, learn how to amp up those skills and save even more, including on travel.

The Traditional Shopper

If you love to personalize your holiday shopping (in-store visits, hunting for deals and “just the right thing” online, wrapping gifts yourself), try these tactics to budget even better.

The Last-Minute Shopper

Do you tend to shop at the eleventh hour and wind up overspending due to time constraints? Take a breath! These tips can help you manage the process and stress less.

The Pragmatic Shopper

Do you love to streamline your holiday shopping for efficiency? Is online shopping a dear friend? Nothing wrong with that! Learn how to save even more as you swipe, tap, and click your way forward.

Holiday Spending by the Numbers

Are you curious about how your shopping habits stack up — whether you’re a big spender, carefully thrifty, or somewhere in between? You’re in the right place. Take a break from decking the halls and consider these facts from a recent SoFi survey5:

•   Americans’ top two stressors ahead of the holidays are finances (34%) and shopping (22%).

•   Shoppers also take playing the role of Santa very seriously. They expect to spend more than $1,100 on holiday gifts and more than $100, on average, for each gift.

•   More than one-third of people have gone into debt buying gifts for the holidays.

•   Pressure to keep up with others plays a big role in shoppers’ overspending. People tend to go $800 over budget, on average, to match what others are spending on them.

•   Close to two-thirds of shoppers are planners: 64% of people save in advance for their holiday shopping, and the same percentage creates a budget in order to manage their holiday spending.

•   How early do people begin their holiday shopping? 21% of people start near Halloween, 31% start near Thanksgiving, and 19% start in early December. Nearly 15%, however, cross gifts off their lists all year round.

With people paying out four figures on gifts — not to mention the $2,574 that holiday travelers spend, on average — it’s easy to see how many carry debt into the New Year. Budgeting wisely ahead of time, however, and then sticking to your plan can help keep your finances on track during the most wonderful time of the year.

Avoid Debt This Holiday Season

It’s tempting to go overboard for the holidays with all the gifts, entertaining, and travel. And who wants a Charlie Brown Christmas tree when you could get a lavish, pre-lit eight-footer?

But when your credit card payment is due after all the celebrations and memory-making, you may wish you hadn’t been quite so free with your spending.

You don’t have to go full Grinch to avoid this scenario. Instead, try these tips:

•   Set a budget for how much you can comfortably spend, and stick to it. Don’t forget factors like sales tax and shipping; they can add to the bottom line.

•   Save for holiday shopping in advance. Start setting aside money long before the season arrives so you don’t have to rely on high-interest credit cards. And if you save that money in a high-yield account, you’ll have extra cash, as well.

•   Use your credit cards wisely. You don’t have to go into debt to make the holiday special. Don’t spend more on your credit card than you can afford to pay at the end of your statement. If a credit card makes overspending too tempting, try to pay with your debit card or cash (if the latter appeals, try the envelope system to manage your money).

•   Shop early. Stockpile gifts when items go on sale. Being an early bird will also help you avoid elevated prices for scarce, in-demand items as the holiday season kicks in.

•   Comparison shop. The holidays are a competitive time, and by spending a few minutes online, you may find great deals, coupons, and other ways to save.

•   Remind yourself that it really is the thought that counts. A small gift card to a favorite cafe or homemade cookies can be as meaningful as dropping much more money at a boutique.

•   Check in with your money often as you move through the season. Your bank may offer tools that make it easy to see how your spending is tracking.

Tools and Tips to Manage Your Holiday Money

Give yourself the gift of better money management this holiday season. Here are some ways to tweak your financial toolkit:

Budget Tracker

Track your spending; You may benefit from budgeting tools, setting spending limits, and receiving alerts if you get close to them. Your bank may have features that can help with this, such as SoFi Insights3.


Automated Savings

Automate your savings to accumulate funds for your holiday spending. This can help you avoid or minimize credit debt. For instance, you might try SoFi Vaults, which allows you to set up different savings Vaults (say, one for gifts, one for travel) and then have funds automatically transferred there from checking. You determine the amount and frequency.


Debt Consolidation

Paying off credit card debt can be a challenge. Eliminating it with a personal loan, like a SoFi Personal Loan, could help4. Personal loans can offer a lower interest rate, which in turn can benefit your finances and relieve some holiday money stress.


Get up to $250 towards your holiday shopping1.

Open a SoFi Checking and Savings Account with direct deposit and get up to a $250 cash bonus. Plus, get up to 4.60% APY2 on your cash!

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