There are plenty of holiday sales happening, and many promise big savings. Between the deals and anxiety around giving gifts, the holiday season can stir up many emotions… and also cause debt. The majority of us are making trade-offs to afford the holidays, including purchasing less and shopping for fewer people, according to a CNET holiday spending survey.
Despite these trade-offs, it’s easy to overspend. Shang Saavedra, a CNET Money expert and founder of Save My Cents, says that far too often, people start the new year stressing and trying to get their finances back on track.
“I have seen consumers spend hundreds or even thousands of dollars during the winter holidays on celebrations, travel and gifting, but then face an insurmountable credit card bill in January,” Saavedra said.
That doesn’t have to be your reality. You can begin 2025 feeling confident in your budget and even set aside some money for your new year’s goals. And you’ll still be able to give your loved ones a meaningful gift without feeling guilty. Here’s what we recommend.
Set expectations with family and friends
Much of the anxiety around gift-giving comes from trying to match the recipient’s effort and spending. Before you start buying gifts, set guardrails with your friends and family, Saavedra said. For example, set a dollar limit of $10 per person or only buy gifts for the children. Setting expectations now can make everyone comfortable participating without worrying about expensive gifts.
Another way to keep costs low is with a gift-giving game, like White Elephant or Secret Santa, where you’re responsible for buying just one gift for one person. Getting gifts for everyone is expensive, so this helps be more budget-friendly.
Read more: My Spending Trigger Is FOMO. Here’s How I Keep It in Check
Categorize gift recipients
To keep yourself on track, set a budget that you won’t exceed and set per-person limits by category. Saavedra suggests dividing the people you’re buying gifts for into three groups:
For example, you might consider sending acquaintances or colleagues a thoughtful gesture such as a hand-written card. Or you can give them something smaller, like a holiday ornament.
Figuring out how to lower the cost for the first two groups of recipients can free up money for your loved ones, like close friends or family, who you’ll likely want to spend a little bit more on. Still, even for them, set a dollar amount you’re comfortable with.
Read more: No, You Don’t Have to Give Holiday Gifts This Year. How to Skip It Without Shame
Choose thoughtful gifts without steep price tags
Saavedra knows how disappointing it may be to not afford the fanciest gift, but it’s best to prioritize your own financial needs and goals. There are thoughtful alternatives that can be just as meaningful but cost a fraction of the price.
Get creative with homemade crafts and treats
Consider a homemade card, holiday cookies or a family photo in a frame. Saavedra said there’s no shame in regifting an item you may have received from someone else during the year.
Buy gifts in bulk
If you’re giving to numerous recipients, Saavedra also recommends buying in bulk. You could save money by buying gifts at discounted prices at wholesale clubs like Costco and Sam’s.
Gift your skills and time
Your time and any other special skills can also make great gifts. One of Saavedra’s favorite gifts for parents with young children is babysitting coupons. “It might cost you time, but it would be incredibly meaningful for parents, where sometimes babysitting these days starts at $25 an hour,” she said. A date night out for four hours could easily cost them $100.”
Consider how your creative skills can help others and create a coupon or gift certificate. Here are a few other examples of service gifts for your loved ones:
- Filing taxes for a family member who struggles with this task
- A home-cooked meal that you can prepare for them next year
- Walking dogs, pet sitting or running errands during your friend’s next vacation
- House cleaning for a family with a newborn or a friend who’s busy with work
- Creating a website or logo for a friend with a new business
- Carpooling for kids whose parents have conflicting work schedules
- Home repairs or upgrades for someone who may need a handyman or doesn’t have time
Read more: Best Last-Minute Gifts You Can Print or Email
Don’t wait until the week before Christmas to shop
To stretch your budget as far as possible, buy early to get the best deals. Saavedra uses browser extensions for her favorite retailer websites, like Camelcamelcamel, to check on price history for more expensive items.
If you wait until the week before Christmas, the best deals may be gone, since retailers often mark up prices later in the season.
However, early holiday sales are in full swing right now, so you can currently find good deals on gifts.
Resist using credit cards and BNPL plans
Too often, Saavedra has seen people try to recoup their finances and bounce back from overspending and debt racked up from the holidays.
Although it’s tempting to consider splurging on gifts through financing options, such as a Buy Now, Pay Later plan, doing so can severely damage your finances for years to come.
“Those are essentially high-interest consumer loans to get you to spend money that you do not have.” Instead, Saavedra recommends only spending the money you have and looking for alternative gifts instead.
If there’s a gift you want to buy that you can’t afford right now, but know you can fully pay for later, consider Amazon’s layaway option, which has more protections in place to help you avoid debt. And if you decide to use a credit card to finance a purchase, consider a 0% APR card, which can prevent interest charges from accruing for a period of time if you can’t pay your balance immediately.