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  • Writer's pictureLaToya Westbrooks Keeling

🎁 How to Enjoy the Holidays: Create Your Shopping Budget Now

Updated: Oct 19, 2022

When summer’s in full swing, you’re probably thinking about heading to the beach, laying by the pool, or grilling out with family and friends — not holiday lights, wrapping gifts, and Secret Santa parties.

I get it. Depending on where you live, you might only be blessed with a few short months of summer. It’s important to soak up this sunny season while it’s here, but before you head out with your towel, sunscreen and flip-flops, take a minute to think ahead to that snowy, holiday season.

Bear with me.

For a lot of us, the holiday season is a time of joy, giving, and… stress. The holidays can sneak up on you and your wallet.

Have you ever been one to run around last-minute looking for the perfect gift that won’t break the bank? Some of us (no shame here!) even take on debt to cover unplanned holiday expenses and start the new year with extra bills.

I’m not saying this to get you riled up and stressed out when the holidays are still months away — I’m saying this so you can prepare.

If you can take the time this month to start planning — and budgeting — for your holiday expenses, you’ll have the funds (and the sanity) to actually enjoy the holidays when they arrive.

Create Your Holiday Shopping Budget Now

The best way to prepare for the holiday season — financially, that is — is to start a sinking fund.

A sinking fund is an account (or category within your budget) that’s dedicated to a particular savings goal. It’s different from your emergency savings — which you should only use in the case of a true, unexpected emergency. Your sinking funds, on the other hand, are for planned expenses that you fund over time.

To create a sinking fund, you’ll want to think about how much you plan to spend for the holidays. We’ll cover some of those common expenses below.

Then, you can divide up your total savings goal by the number of months you have to save, for example, if you start in July, you’ll have six months to save. This allows you to put a much smaller chunk of money away each month instead of a large sum come December. Use these 7 suggestions to help you save money to fill your sinking fund.

If creating a separate budget category isn’t enough to keep you from dipping into this sinking fund, you can open a separate savings account just for holiday spending. That way you won’t be tempted to spend a little here and there in the meantime.

What to Include When Budgeting for the Holidays

The average American spends $641 on gifts for the holidays and while that might be a good starting point for your budget, it’s just one category of holiday spending. Here are some common holiday expenses to consider when making your holiday budget:


Rather than coming up with an arbitrary savings goal for this category, think about who you’ll be shopping for this upcoming holiday. Then, decide in advance how much you want to spend on each gift. If you’re stuck, see if you can figure out how much you spent on Christmas gifts last year, then build your budget from there. Don’t forget the cost of wrapping and shipping!


Depending on if, how, and where you travel, this could be a big chunk of your budget. If you’re staying home for the holidays, skip this step. If not, do you know where you’re going? How will you get there? Do your best to estimate travel costs including gas, plane tickets, accommodations, and anything else.


Do you go all out and deck the halls for the holiday season? If it’s something you love to do, make sure you budget for any new decorations you might buy this year. See what you already have before deciding how much you want to spend this year and make sure to budget for the Christmas tree, menorah or kinara — holiday decor doesn't come cheap!

Entertaining and Events

Do you host a holiday party or family dinner or do you get dressed up each December to see the Nutcracker ballet? Whatever your tradition, figure out how much it costs so you have the cash to fund those memorable events.

Charitable Donations

Many people take time during the holidays to give back. Some give their time, while others prefer to write a check. If this is important to you, be sure to plan ahead. Budget for any monetary donations you’ll be making during the holidays.

Tips for Stretching Your Holiday Shopping Budget

While you can spend a lot during the holiday season, it’s up to you to create your budget. The whole point of building your holiday budget in July is to alleviate the financial and emotional stress of the holiday season, but if you set your budget way too high, no amount of planning can eliminate that stress.

If — after making sure your budget is aligned with your priorities and values — you want to make sure you’re stretching it as far as it will go, follow these tips to get the most bang for your buck:

  • Start shopping early. The beauty of starting to save for the holidays in advance is that you have money set aside to buy a gift whenever it makes sense. If you see the perfect gift for mom on sale in September — buy it!

  • Change up traditions. Who says you have to buy a gift for everyone? How about organizing a Secret Santa or hosting a low-cost holiday party instead? The earlier you have conversations with friends and family about expectations, the more time you have to create a plan that works for everyone.

  • Save on wrapping. Skip the Santa paper this year and get creative with your gift wrapping. Use pages from pretty magazines or the comics section of the newspaper. Or wrap gifts in pretty fabric scraps or cloth bags — they’re festive and reusable.

  • Make your gifts. Homemade gifts can save you money and be more meaningful. If you’re crafty, knit mittens or hats. If you cook, make someone a delicious meal. The ideas are endless — candles, terrariums, calendars, scrapbooks. Plus, if you start thinking about it now, you’ll have months to create these gifts.

  • Give an experience. Experiences are more valuable than stuff, anyway. Instead of a toy, give your niece a special afternoon with you. Give your spouse a self-care day while you entertain the kids. Offer babysitting, a nice dinner, or even a night at your family cabin.

Get a Head Start On Your Holiday Shopping Budget

Between hitting the pool and enjoying fireworks with friends, July is the perfect time to start budgeting for the holidays. When the temperature drops and you hear Christmas songs on the radio, you’ll feel calm and ready to take on the holiday season with a fully-funded budget.

At Wealthly, we help individuals and couples work toward financial health goals and freedom. If budgeting for the holidays sounds like an overwhelming task, we’d love to help. To see if we can help you bring ease into your life all year round, email me at or click here to fill out a contact form today. We’ll be in touch soon!


Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.


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