For many of us, the holiday season is something we look forward to all year long. The sparkle of tinsel, the scent of fresh-baked cookies, the glow of fireplaces, and the joy of giving make this time feel truly magical. But while we’re busy planning menus and gift lists, how many of us are planning our budgets? Hidden holiday costs can sneak up fast—turning festive cheer into financial stress if we’re not prepared.
1. Start with a realistic holiday budget
Before you start your holiday spending spree, now’s the perfect time to take a moment to assess your finances. In a perfect world, you’d want to have about 1-2% of your annual income set aside for holiday expenses. If you didn’t have that number in mind, you’re not alone.
The first step to creating a holiday budget is to think about where you typically swipe and tap from now until the new year. Then break up your holiday related spending into categories. Gifts are an obvious place to start. But what about food, travel, mailing and postage, even decorations? Let’s face it, Home Goods can have us in a chokehold with their shelves full of festive tableware and throw pillows. Maybe you didn’t plan on buying four lighted trees for your entryway, but these are the miscellaneous costs that can really add up and should be accounted for in your budget.
Here's a detailed breakdown of the typical holiday costs:
- Gift wrapping supplies: Oftentimes, choosing the gift is only half the fun and choosing the perfect wrapping can really make your days merry and bright. From tape to paper and ribbon, plan on spending on your wrapping supplies.
- Shipping fees: We’ve all experienced that heart-clutching moment at UPS when they utter your total for that little box of gifts you brought in. Those of us with loved ones scattered in far-off places should plan ahead and ship early, if you can, to avoid expedited fees.
- Host and hostess gifts: For every RSVP, consider its added expense: A scented candle here, a floral arrangement there. Trust us when we say that little something you bring to a party is worth adding to your budget.
- Extra groceries and dining out: There’s no way around it. Busy schedules and special occasions of the season mean more trips to the store or spontaneous dinners out.
- Decorations and lights: No matter how many strings of lights we buy, it seems half the strands we plug in the next year don’t light up. Plus, there’s no shortage of great new decorations to tempt us. Keep decoration costs in mind for your budget.
- Pet boarding/sitting and childcare: Whether it’s a babysitter while you go to your work holiday party or a pet sitter to feed the cat while you’re out of town visiting family, don’t forget to budget for this sneaky holiday expense.
2. Tips for saving on holiday travel
Speaking of holiday travel, that’s a major cost we often forget to really think about planning for in our end-of-year budget. And while this could be among your biggest holiday expenses, it doesn’t have to be. There are some ways to help keep travel costs down.
- Book early: Flights and hotels tend to be cheaper when booked well in advance. Use fare comparison tools and set alerts for price drops.
- Be flexible with dates: Traveling a day before or after peak holiday dates can save you hundreds. Mid-week flights are often less expensive than weekend departures. If you’ve got flexibility in your work schedule, maybe consider visiting family just as the holidays wrap up. Flight prices plummet after the first of the year.
- Use rewards points: If you’ve been saving up credit card or travel rewards, now’s the time to cash them in. Make the most of clever lines of credit that offer more for your spending. Our Member Rewards+ Card offers cash back on travel and everyday purchases.
- Pack smart: Avoid checked baggage fees by packing light and using carry-ons. If you’re flying with gifts, consider shipping them ahead to avoid extra luggage charges.
- Consider alternatives: Driving instead of flying, staying with family instead of booking a hotel, or using public transportation can all help reduce travel expenses.
3. Plan ahead and track everything
Use a spreadsheet or budgeting app to track your spending in real time. Set spending limits for each category and stick to them. Golden 1 members can take advantage of our Mobile Banking App to easily monitor your transactions and set alerts from anywhere.
4. Shop smart and early
Avoid last-minute purchases, which often lead to overspending. Look for sales, use coupons, and consider cashback offers—especially if you’re using your Golden 1 debit or credit card. Shopping early also helps you avoid rush shipping fees and gives you time to compare prices.
5. Embrace low-cost alternatives
Not every holiday gesture needs to come with a price tag. Homemade gifts, baked goods, or offering your time (like babysitting or helping with errands) can be just as meaningful. Consider organizing a Secret Santa or White Elephant exchange to reduce the number of gifts you need to buy.
6. Reflect and adjust
Don’t miss the opportunity to learn from your holiday habits. Take a moment to review the budget you set up. What worked? What didn’t? If things didn’t go as smoothly as you’d hoped, there’s always next year. And it’s never too soon to plan for next year’s holiday magic with a Golden 1 Santa Saver account. With this dedicated holiday spending account, you can start saving now with as little as $5 and enjoy stress-free spending when funds transfer automatically in November.
Don’t let debt put a damper on your holiday vibe. A little planning and anticipation for hidden costs is all it takes to be sure you enjoy the season with peace of mind and maybe even a little extra left over for the New Year.
For more helpful tips and financial advice, explore the Golden 1 Financial Wellness Center and check out our Learning Lab to peruse a robust library of personalized financial learning tools.
