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Christmas is a time for family, friends, and good cheer. But for some, the holiday season can be a source of stress. Financial worries can damper the festive spirit, and some people don’t know how to manage Christmas on a budget.
This Christmas, don’t overspend as Santa does. Follow our money-saving tips and advice to have a budget-friendly holiday season.
2022 American Christmas Spending Statistics
Christmas is a time for giving, and Americans are expected to spend an average of $1,000 on gifts this year. But it’s not just the gifts that add up – turkey, decorations, alcohol, and post-party painkillers all contribute to the cost of Christmas.
Here are some of the key Christmas spending stats for Americans in 2022:
- The average American spends $1,000 on Christmas every year.
- Gift purchases account for 65% of US holiday budgets.
- Over the past decade, US holiday sales have grown year over year.
- It is estimated that 96% of Americans purchase gifts for their families.
- The average American spends well over $200 a year on non-gift items.
- Men spend 10% more on holiday purchases than women.
- Americans between the ages of 45 and 54 spend the most over the holiday season.
- Each year, the Northeast spends around $100 more than the South.
- The most popular gift to receive is a gift card.
- 43% of Americans start shopping for Christmas before October 31.
- The majority of Americans (57%) shop online for holiday gifts.
How much do Americans spend on Christmas?
The National Retail Federation (NRF) reports that American consumers spend $997.73 on gifts and holiday items yearly during Christmas.
In other words, the average American spends about a week’s salary on Christmas gifts compared to the median pre-tax weekly income of $1,001.
This is how $997 is spent:
Purchase Type | Average Spend (2021) | Percentage of Total Spend |
---|---|---|
Gifts for Family, Friends, and Coworkers | $648 | 64.9% |
Non-Gift Holiday Items (Food, Decorations, etc.) | $231 | 23.1% |
Other Non-Gift Purchases for Friends or Family | $118 | 11.8% |
Total | $998 | – |
Data shows that almost 2/3 of the average American’s holiday budget goes toward gifts. The remainder is spent on decorations and non-gift purchases (such as travel expenses).
Seven tips to save money this Christmas
Here are some tips to help you shop smart and save money this holiday season:
Plan before you hit the stores
Going into the holiday season, having a budget for all expenses is essential. This includes food, gifts, decorations, and anything else you need. Once you have an overall budget, you can look for the best deals in each category. This will help you stay within your budget and not overspend this holiday season.
Decide on a gift price limit
One of the most popular money-saving tips is to agree on limits with family and friends. Doing so eliminates the worry that someone has purchased a much more expensive item than what you had in mind. Additionally, it allows everyone to keep track of their spending.
Don’t be afraid to be honest (it’s the season!)
No one wants to admit that they’re struggling financially. But the truth is, many of us are not as well off as we’d like. This holiday season, be honest with your loved ones about your circumstances. Don’t feel pressured to spend more than you can afford on gifts or entertainment. Chances are, others are in the same boat. Suggest getting together for a potluck instead of going out for an expensive meal.
Watch for free
It’s that time of year again when the best television comes out. But you don’t have to spend much money to enjoy it. Most streaming platforms offer free one-month trials. So sign up in December and enjoy relaxing at home with a good family film. Just don’t forget to cancel before the problem is over.
Reduce your postage costs
Did you know that you can save money on shipping costs by using the same platform more than once? Look into getting a shipping pass from ASOS or Amazon Prime. With an ASOS shipping pass, you can get free premium shipping for the year for only £10. And with Amazon Prime, you only have to pay £7.
Consult a professional
Christmas is a time for family, friends, and fun. But it can also be a time of financial stress. Before getting into debt to pay for gifts and festivities, get professional advice from a financial advisor. They can help plan your budget, advise on credit cards and overdrafts, and ensure your Christmas is enjoyable without risking your finances.
Loyalty cards
Make sure you take advantage of store loyalty cards. With most cards, the more you spend, the more points you earn, which can lead to significant savings in the long run. So please don’t wait until December to sign up for a card or cash in your points, do it now and enjoy the benefits all season long.
Budget gift ideas
As we approach the holiday season, many of us are thinking about how much money we’ll spend on gifts. According to recent statistics, 91% of women and 87% of men are planning to spend money on presents this year.
One doesn’t need to spend much on presents to show loved ones how much they mean during the holiday season. There are plenty of ways to celebrate Christmas without breaking the bank. Check out these great ideas for gifts that won’t cost a fortune:
Give an experience
Many things in life are free or at least very inexpensive. New parents may appreciate a voucher for free babysitting more than a Bluetooth speaker, and friends might be thrilled at your planning a (free) day out together or cooking a delicious meal. Many beautiful things in life don’t cost a lot of money.
Gift a memory
Printing photos is a great way to create personal, meaningful gifts without spending much money. You can find cheap frames at Ikea, Wilkinson’s, or your local supermarket and print photos for as little as 5p each.
Get in the kitchen
Presents don’t have to be expensive to be thoughtful. Some of the best gifts are homemade with love. Next time you’re stuck on what to get someone special, try making something in your kitchen.
Get creative
Homemade gifts are always appreciated, whether as simple as a batch of cookies or a handmade necklace. It shows you took the time to make something special just for them. And who doesn’t love a personalized gift?
How to decorate for Christmas on a Budget?
What ways to decorate your home for Christmas without spending much money? Here are a few ideas to get you started.
Reuse or swap
This Christmas, ditch the store-bought decorations and dust off your old box of baubles and tinsel. A homemade, personal touch will make your holiday decorating more memorable – and it doesn’t have to cost a thing. Suggest swapping some decorations with a friend so you can enjoy a fresh look this year.
Shop smart
The holidays are a time for spending with family, not raising debt. Ditch the department store this year and head to the supermarket for your Christmas decorations. You’ll save money and still have a beautiful holiday display.
Tie it up
Add a touch of class to your Christmas tree this holiday season with some elegant ribbon. You can find spools of ribbon at any craft store, and tying bows is a fun way to get into the festive spirit.
The great outdoors
Decorating outdoors for Christmas on a budget can be tricky, but it’s not impossible. You can make your own Santa signs, window displays, and even a DIY Christmas wreath. Tie baubles to your trees and ribbons to the gate, and check online for second-hand outdoor lights. Â
The bright lights of August 2023
No matter how you look at it, Christmas is a costly time of year. To get back on track financially in August 2023, get expert advice on your Christmas budget and post-holiday recovery plan. Additionally, try these tips for bouncing back after the holidays:
Christmas Bonus
Christmas bonuses can be a great way to boost your finances for the upcoming year. However, instead of automatically spending your bonus, consider saving some or all of it. This will give you a financial cushion in January and help you avoid post-holiday debt. Alternatively, you could use your bonus to make an extra mortgage payment or add it to your pension fund.
Dry January
Most people who overindulged during the Christmas period abstain from alcohol during January. Your bank account will also be able to recover as well as you will feel more refreshed. Â
Don’t waste a thing
One way to make the most of your Christmas leftovers is to freeze them for January meals. This way, you can ensure that none of your food goes to waste. Another tip is to exchange any unwanted gifts for something that you need. This could be done by selling unwanted items online or trading them with the gifter.