Shopping for Christmas presents in December is one of the most costly periods for every family. An American Christmas budget in 2022 was around $900 per person. For many people, shopping starts in November, and they start saving money in February. Explore how much to spend on Christmas gifts and how to prepare for holidays with a tough Christmas budget.
According to the Conference Board Holiday Spending Survey, Americans plan to spend an average of $985 on holiday expenses in 2023. For gift giving, they intend to spend around $654, which is 6,7% more than last year ($613). At the same time, the budget for other holiday expenses is expected to decline by 16% ($330 compared to $393 in 2022). Food is one of the most important non-gift items impacting the holiday budget. Food expenses are expected to be bigger than in 2022.
Buying gifts for all friends and relatives is costly and not always manageable. As many loan options are unavailable for individuals with less-than-stellar credit scores, a holiday loan with no credit check is an excellent way to cover holiday expenses. These installment loans allow you to borrow up to $5,000 and return it within 6-12 months in equal monthly payments.
The amount you should spend on Xmas gifts depends on factors such as your financial situation and relationship with the person. People tend to spend more cash on their close friends and family members.
While everyone’s holiday spending can differ, we offer to divide your Christmas money in the following way:
- $50-$100 for your immediate family members (parents, brothers, sisters, children);
- $25-$40 for close relatives (nephews, nieces);
- $20-$50 for friends and coworkers;
- $10-$15 for extended family members.
Christmas is one of the best times of the year for all children. If you have a kid, you are familiar with the importance of saving extra money for buying gifts for them. It is a pleasure for parents to see the happiness in their child’s eyes when they receive a desired toy from Santa.
Each family can spend different amounts on the holiday shopping for their children. Most parents had $220 of Christmas savings for each child. Families with kids between 7 and 12 years usually spend the most. However, around 30% of parents buy gifts for less than $100. Decide how much you can afford on holiday spending for your kid depending on your finances, values, and family traditions.
You should not buy an expensive gift if you are on a tight budget. Many consumers exceed their Christmas spending limit and can’t even pay their utility bills and credit card debt next month. Free yourself from feeling pressured to spend all your cash on an unaffordable gift and save money for more crucial things.
The holiday season is often challenging and comes with many financial difficulties. We have prepared several tips that should help you with your Christmas shopping.
Create a holiday spending budget
Creating a spending budget is an excellent way to see which dollar amount you will spend for each person and each expense category, like food, clothing, decorations, greeting cards, etc. You can write your budget on a simple piece of paper, spreadsheet, or anywhere else.
Make a list
It happens that people can forget about buying gifts for their extended family members or friends. As a result, they feel uncomfortable when they need to exchange gifts with them. Therefore, gather all the information about the people for whom you want to prepare gifts in one place.
Grab a gift exchange or go with a Secret Santa
If you gather many friends or family members, it makes sense to consider buying a gift only for one person. These ideas are not only excellent ways to save money, but they also will bring fun.
Consider handmade gifts
The cost of handmade gifts is much lower than when you need to shop online or offline. Furthermore, many people want to benefit from holiday sales in December, which results in long queues in shopping centers during the holiday season.
Plan in advance
The earlier shoppers plan their holiday spending, the lower their chance of getting into debt. Start buying Christmas decorations, gifts, and other items in the fall to spend less in the holiday season.
Avoid getting into debt
Holiday retail sales always look attractive, but they often lead to overspending. People use their credit cards, take personal loans, and BNPL to purchase more gifts. Then, they face interest rates and the inability to return the money. Try to use your debit card or cash when shopping to control your expenses and avoid purchasing too many items.
Reduce the scale
Many people love giving gifts and spend their money on holiday sales. You may feel uncomfortable when everyone in your environment wants to exchange gifts with you, but you don’t share this desire. What should you do in such a situation? It is time to say “no” without feeling guilty. You don’t have to exchange gifts if you want to spend your cash on vacation, pay off the debt, or cover other costs.
You can also explain your situation to your friends and family and suggest a scaled-down Christmas. You can save money by skipping Christmas cards, wrapping paper, and other unnecessary things.
Creating a Christmas budget helps people determine the amount they plan to spend during the holiday season. Below, you can find tips on how to create a Christmas budget.
It is crucial to understand how much you can afford to spend on holidays. To set your spending limit, you need to analyze your Christmas necessities in previous years. You can get this information from your bank and credit card statements. However, be prepared that your total cost may differ due to inflation.
Creating a budget is not enough to prepare for holidays. It is also crucial to stick to the limits you set. Therefore, you should keep track of your spending. There are many budgeting apps that allow you to check your budget more efficiently and accurately. In most cases, they can automatically sync with your bank accounts.
It is essential to understand how much you can save regularly. Analyze your monthly income and expenses and determine the amount you can keep for holiday spending. Try to stick to this savings goal to avoid financial difficulties during holidays.
According to the National Retail Federation, Black Friday is the biggest shopping day. Every year, many people shop on this day and purchase the necessary items. Cyber Monday is also a popular day but is in second place after Black Friday.
Christmas always comes with the need to purchase gifts for your close people. For many individuals, preparation for holidays is stressful due to the difficult financial situation. It is crucial to calculate how much to spend on Xmas gifts without hurting their budget. Creating a budget, shopping in advance, looking for sales, and many other ideas can help you save your money and avoid getting into debt on holidays.