The holiday season is fast approaching. For most people, it’s the busiest and most expensive time of year.
According to PWC’s 2024 Holiday Forecast, holiday shoppers plan to spend an average of $1,552 on gifts, travel, and entertainment.
Planning trips, hosting parties, and shopping for loved ones can be exciting, but if you’re not careful, you can end up ruining your entire budget.
Consider these six strategies to get your holiday spending under control and start 2026 debt-free.
6 Creative Holiday Savings Tips
The best way to ensure that vacation spending doesn’t take a huge toll on your budget is to factor it into your budget throughout the year.
But even if you haven’t saved for a vacation yet, you can still be strategic about spending and saving now.
1. Use a Sinking Fund
A sinking fund is a savings account that is set aside for future expenses that aren’t included in your regular monthly budget—for example, a trip, a down payment on a house, or a vacation.
By putting aside money on a regular basis, you can spread out your expenses and avoid having to take out new debt or struggle to find money when you need it.
There’s still time to build up savings for holiday expenses like gifts, parties, and decorations before the holiday season hits.
Review your budget to see how much you can comfortably save each payday. Also, review your current savings goals and you should see if you can adjust your contributions to your savings account to prioritize vacation savings by the end of the year.
2. Use Holiday Savings Accounts
Some banks and credit unions offer accounts specifically designed for holiday savings.
Most are similar to regular savings accounts. However, holiday savings accounts may have lower fees or higher interest rates to encourage savings.
However, keep in mind that there may be minimum balance requirements or penalties if you withdraw money before the holiday.
If you want a savings account with fewer restrictions, you can also consider a High-Yield Savings Account. This pays higher interest than normal and is available all year round**.
3. Use Cash Back
If you have a credit card that offers rewards, now is a good time to check your rewards balance.
See if you have enough points or cash back to redeem for gift cards or statement credits (or rewards miles for future trips) to help offset your vacation expenses.
It’s also important to consider how strategically you’ll use your rewards card over the next few months.
For example, if your card offers higher rewards points, choose one that matches your vacation spending plans, such as department stores or restaurants.
A word of caution: If you’re only using your card for vacation expenses, make sure to stick to your budget so that you can pay off your balance in full each month. Otherwise, interest will eat up all your rewards.
Even if you don’t have a credit card or don’t want to use one, you can still get cash back on your vacation spending.
Cash Back browser extensions like Rakuten, Honey, and Capital One Shopping give you cash back on purchases from popular retailers regardless of the payment method you use. They can also automatically find and apply coupons when you shop online.
4. Don’t Forget a Homemade Gift or Gift Exchange
The holidays don’t mean spending too much money or buying expensive gifts for everyone on your list.
Choosing a homemade gift can be a more intentional, thoughtful, and affordable way to show your loved ones that you’re thinking of them this season. Consider baked goods, handmade decorations, or handwritten notes, for example.
Another option is to organize a gift exchange with your friends and family.
If you have a large family or group of friends, buying individual gifts for everyone on your list can significantly impact your budget.
If you can organize a gift exchange, it can save you money and give you more time and thought to create the perfect gift for the person you’re buying for.
5. Plan Ahead For Holiday Meals
If you’re hosting a party or holiday dinner, planning ahead can help you control costs.
Buying in bulk, buying non-perishable items in advance when they’re on sale, and taking the time to look for coupons can help you keep costs down.
Another creative way to save time and money on holiday meals is to host a potluck dinner.
Reach out to your guests and see if they can help you bring a dish to their party. This way, you can save on grocery shopping—and avoid the headache of cooking multiple dishes.
Also Read: How to Achieve Financial Independence: Beginner’s Guide
6. Open a Credit Card with a 0% Introductory APR
Many Americans are struggling to pay for even their basic living expenses these days. While it’s often said that relying on a credit card when you’re struggling financially is not a good idea, there are times when it’s really necessary.
However, it’s still possible to use credit responsibly this holiday season, even if it means carrying a balance for a few months.
The key is to choose a card with a 0% introductory APR that offers no interest for a limited period of time.
When you open a 0% APR card, your purchases won’t accrue interest until the end of the introductory period. Intro periods typically last from six to 21 months.
After that, your balance will start accruing interest at the regular APR rate. So if you pay off your balance in full before the end of the introductory period, you won’t be paying more in interest.
I would like to emphasize that this strategy should only be used if you have a vacation budget and plan to pay off the balance on time. If you have difficulty managing debt or controlling your spending, this may not be the best route for you.
Many people struggle to fit vacation spending into their budgets, and for good reason.
With the rising cost of living and financial obligations, finding the money needed to cover vacation expenses without making sacrifices in other areas can be a challenge.
However, with the right strategies, you can minimize the financial impact of the holiday season.