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15 Surprising Ways to Save This Holiday Season

Let’s face it. The holidays are expensive. In fact, Americans plan to spend an average of $997.79 on holiday spending this year.

We all want to make the holidays special for our friends and family, but we also don’t want to drain our accounts or start the new year in debt. So what if you have more Christmas list left than paycheck? You can still give memorable gifts without breaking the bank.

Here are 15 surprisingly simple tips to help you avoid overspending on holiday gifts.

1. Develop a strategy.
We all get bombarded by ads for the perfect holiday gifts, and it’s tempting to impulsively just start adding things to our shopping cart. But first, give some thought to your personal gift-giving philosophy.

Ask yourself: What does giving mean to me? Is it about finding the perfect present? Making memories that will last? Am I trying to impress others with how much I spend on them? Do I feel obligated to buy gifts for certain people? Understanding your motivations is a good place to start even before you open your wallet.

Be honest with yourself. Before you start to click “Buy,” take a few minutes to think about why you’re buying presents before you think about how you’re going to pay for them all.

2. Follow the 1% rule.
A good rule of thumb, financial experts say, is to spend no more than 1% of your annual salary on holiday gifts. Let’s say, for example, you make $50,000 a year, then your gift-buying budget would be $500. Knowing the total amount you can spend on gifts is necessary so you don’t go overboard and start 2021 in the red.

3. Make your list and check it twice.
Whether you want to create a spreadsheet or just use plain ol’ pen and paper, make a list of everyone you plan to buy gifts for. Look at your total budget (see #2 above) and divide it by the number of people on your list. This gives you a starting point for how much to spend on each person. Sure, you may want to spend a little more on your mom than you do on your cousin, so you can adjust your list accordingly.

4. Track your spending.
Cozy socks for Uncle Drew here, a sweater for Aunt Margaret there. Individual purchases may not seem like much, but the costs add up quicker than you think. Be sure to track your expenses as you go, and stop spending when you’ve reached your limit for that person.

5. Give fewer gifts.
This may seem obvious, but it’s very hard for some, especially those who love giving gifts more than receiving them. Keep in mind, though, that your family members and friends don’t want to see you in debt and stressed out.

In reality, not everyone needs a gift. Sometimes a hand-written card with a heartfelt, personal note is enough to let the person know that you are thinking of them and sending tidings of comfort and joy.

It’s also o.k. to have a talk with your family members. Let them know that you need to cut back on spending. You may be surprised at how many others in your inner circle are thinking the same thing, but are too timid to speak up. A clear conversation about skipping presents this year—or at least cutting back—could be just the thing both your family and your finances need.

6. Choose memories over money.
There’s a reason the expression “It’s the thought that counts.” is a timeless sentiment. For some people, spending time together really is better than the joy of a physical gift.

And while given the current pandemic, getting together physically may not be feasible, you can still be together—even if it’s virtually. COVID-19 has changed in many ways the things we treasure most. This year, value experiences over gifts and meaningful talks over tchotchkes.

7. Use old gift cards.
If you have unused gift cards laying around that you doubt you’ll use, either give them as a gift to someone you know will appreciate them, or use them to buy presents. You can also sell your unused gift cards for cash to put towards your holiday budget.

Keep in mind that most gift cards have an expiration date, so be sure to check yours before re-gifting them or using in-store/online.

8. Combine orders and save on shipping.
Many online retailers will offer free shipping if you spend a certain amount. While we don’t recommend buying extra items just to get free shipping (which can backfire with you spending more than you intended!), it can sometimes be a smart strategy.

For instance, if you find the perfect fishing tie for Grandpa on a store site that’s offering free shipping with certain minimum amount order, see what else the store offers that would work for others on your gift list. Is there anything for your dad or brother on that same website?

Also, be sure to take advantage of ship-to-store options, which are usually free and don’t require a minimum order. You will have to drive to pick it up from the store, but most stores now offer contactless curbside pick-up, as well.

9. Go in on a group gift.
This may take some planning, but can be a good way to get someone a larger, more expensive gift without paying for it all by yourself. Maybe your son wants a new iPhone for Christmas…how about asking the grandparents to chip in as well? That takes the pressure off them to figure out what to buy, and takes some of the financial burden off you. Or, get your siblings to go in on a group gift for your parents. For your child’s teacher, send an e-mail to the parents in his or her class asking them to donate small items for a gift basket, or contribute money for a larger gift card.

10. Say no to random gift exchanges.
This may be easier this year, with many holiday gatherings put on hold due to the pandemic. Even so, if you’re asked to participate in a Secret Santa or gift exchange with your book club, friend group or co-workers, don’t feel pressured to participate. Just say thank you for the invite, but you’re not able to participate this year.

11. Remember that “re-gift” is not a bad word.
Ok, so Seinfeld gave re-gifting a bad rap. But that’s not always the case. Repeat as many times as you need to: It’s o.k. to re-gift! We all have received gifts we don’t need, or will never use. Let someone else get use out of them, and save money in the process.

Just be smart about it. You don’t want to re-gift that Snoopy coffee mug to the same person who gave it to you last Christmas. But that brand new InstaPot that you received two of last year and one is still sitting in your closet in the box? That could easily be re-gifted to your best friend who just got married or nephew who is living on his own for the first time.

12. Make presents.
Homemade gifts can be a memorable, and cost-effective, way of giving of your time and talents. If you need inspiration, sites like Pinterest offer hundreds of ideas and instructions. You don’t have to be super crafty. Maybe you like to bake (or can at least follow a recipe); you can make your brother’s favorite childhood dessert and drop if off on his doorstep tied up with a bow and personal note.

For those on your list who love to be pampered, a homemade batch of luxurious body butter or scented facial scrub makes a nice gift. There are many recipes online, and these homemade concoctions are often healthier, since they don’t contain harmful chemicals or preservatives.

Some other DIY gift ideas include jewelry, toys, puzzles, photo books, homemade salsa or jam, baked goods, picture frames and bath products. You can also offer to provide a service; for example, a free night of babysitting for new parents, a weekend of dog- or house-sitting for someone who travels a lot for work, or a home-cooked meal for a college student living off fast food. Include a copy of your calendar for the next few months so you can coordinate the days that work for you both.

13. Use your credit card rewards for gifts.
If you have been building up credit card rewards points throughout the year, use them to buy holiday gifts. You may be surprised at the great stuff you can get using your rewards: merchandise, travel deals, gift cards and more. Or, redeem your rewards points for cash back and put that towards your holiday spending.

14. Spend less on traditions.
Have you thought about why you send Christmas cards to everyone in your address book? Or why you buy that expensive Radko ornament each year? Is it because your mother (or grandmother) did?

Think about what traditions you take part in that mean something to you and your family—and those that don’t. Maybe decorating the tree with strings of popcorn with the kids is something you enjoy, but making 15 different types of Christmas cookies, not so much.

Pick a few traditions that you want to keep, and do away with the others. Discuss with your family to see which traditions they are o.k. with no longer doing. And if you can’t bring yourself to give some traditions the ax, put them on hold for this year and see next holiday if you want to bring them back. (Chances are you won’t miss them!)

15. Price shop and stack deals.
Retailers are fighting for your dollars, and many try to stand out from the rest by offering special perks like flash sales, free shipping, discounts and more. One thing experienced couponers do is to stack deals. They wait until an item goes on sale, then “stack” a coupon on top of the sale price for maximum savings. If you’re shopping online, you can find stackable deals through sites like Rakuten and RetailMeNot. Other rewards apps, such as Ibotta, can help you find coupons to stack with sale prices in stores.

It’s also smart to comparison price shop. To make sure you’re getting the lowest price, apps like ShopSavvy let you scan the bar code on an item and see how much it’s selling for in other stores and online. For online shopping, you can use a browser extension like PriceBlink to compare prices and search for coupon codes automatically.

References: EveryDollar, National Retail Federation, Millennial Moneyman, MoneyCrashers, Inhabitat, ShopSavvy, PriceBlink, RetailMeNot, Ibotta, Rakuten, The Idea Room, The Every Mom, The PennyHoarder