Saving ahead for next Christmas saves you money and stress. How to best prepare your budget for the gifts, charity, travel and fun that the holidays bring.

Now that you’ve survived the holidays, reading about next year’s season is probably the last thing you want to do. But trust us on this – taking the time now to plan and save for the next holiday season is the best way to ensure more joy and less stress next time.

Americans spend an average of $1,121 per person on holiday gift-giving and other merriment. That’s not the kind of money most people can pull out of their monthly budgets. But divided over 11 months it’s doable – and of course, you don’t have to spend that much.

Being deliberate about how much you can spend, and what you want to spend it on, is one of the biggest benefits of pre-planning your holidays. It protects you from credit card debt and makes your holiday experience more meaningful by putting your money toward the things you value.

It’ll also keep you from using your year-end bonus or tax refund to pay off holiday debt, which will free up money to put towards an emergency fund or another big savings goal.

Saving for the holidays isn’t new – just ask your parents if they ever had a Christmas Club Account. But this past year I finally understood that I could remove a lot of guilt and stress from my December by treating it like a vacation, an experience to be saved for in advance.

I also realized that gifts aren’t all I want to spend money on this time of year. So I’ve broken holiday spending into four categories: gifts, charity, travel, and experiences.

Here’s how I plan to start saving for Christmas:

Gift giving

Here’s a helpful to-do list to save for next year’s gifts:

Track your spending on presents this year

This should be fairly easy to do, especially if you did most of your shopping online.

Go through your credit and debit card statements, too. Even if you don’t have a specific total, a ballpark figure is enough to give you a savings goal for next year.

Declare your gift-giving spending goal for next year

If you’re comfortable with what you spent for this year, make that your savings goal for next year. If you felt like you overspent or want to cut back, look at this year’s spending in more detail. Are there people you could trim from your list? How much less could you spend per person?

I felt guilty asking people not to exchange gifts with us, but once I started saying, “Could we just make a lunch date instead?” or “Could we just buy presents for the kids in the family?” I found that no one was angry with me and most were relieved.

Everyone feels some amount of financial pressure at Christmas, and many people don’t want any more stuff. Spending time together, whether as a way to save money or to switch your spending from objects to experiences, is a popular alternative.

Calculate how much money you need to save each month to reach your goal by the end of next year

For example, I’d like to have a little more to spend on gifts next year. If I want to have $500 saved by December, I’ll need to put away about $45.50 a month starting in January.

Set up automatic deductions so you won’t be tempted to use your Christmas money on summer fun

Keep it out of reach in a high-yield savings account you don’t look at too often. Then, when November rolls around, you’ll be pleasantly surprised to see all your Christmas expenses are as good as paid for.

If you’re looking for suggestions, I recommend the CIT Bank Savings Builder. It comes with a 1.00% APY when you have a $25,000 balance or you deposit at least $100 each month. See details here.

CIT Bank. Member FDIC.

Charitable donations

You’ve all heard about #GivingTuesday, which is starting to feel less like an anti-consumerism, spirit-of-generosity suggestion, and more like an overwhelming clamor that makes me feel like a moral failure for not donating to every cause that appears in my inbox.

I’d like to give more money to charity, but the range of options can cause “choice confusion” just as much as scrolling through an endless list of holiday gift guides. And without saving in advance, or deciding to donate on a monthly basis instead, my regular budget has no more room for a sudden burst of philanthropy than for gifts.

Here’s what you can do differently this year:

Be deliberate in your choice of causes and charities

There’s a lot of need in the world, and you usually become most aware of it during the holidays. But just as you are most effective with your time and effort when you decide on a shortlist of goals and priorities, you’ll be most helpful when you identify the one cause or a few causes you find meaningful to support.

Remember that your time can be just as helpful as your money

Nonprofits often lament the flood of holiday volunteers who disappear in January. So just because you didn’t volunteer during the holidays, it doesn’t mean you missed the opportunity.

You could sign up now to become a Big Brother or Big Sister, feed animals at your local shelter, or give your time to any local cause.

Consider making a monthly donation instead of saving monthly toward an end-of-year gift

Even a small amount like five dollars a month adds up. Decide what you can afford (or what – like one takeout meal a month – you will give up) and set up an automatic monthly donation.

Then when Giving Tuesday comes around you can relax knowing you’ve already been doing your part all year.

Make a donation to a loved one’s favorite charity as a gift

Like substituting experiences for gifts, a donation to someone else’s favorite charity is a great way to combine charitable giving and gift-giving, especially for the people on your list who don’t really need or want any more objects.

Set aside some money each month for “impulsive” holiday giving

It could mean contributing to your church or other organization’s sponsoring of a local family’s Christmas dinner and gifts. Or donating to help neighbors in the wake of recent tragedy.

There are also timely causes that you won’t know about in advance. Planning for this kind of impulsive giving allows you to be generous in the moment without hurting your budget.


Some people have to travel to see family over the holidays. Others would love to get away during or after this stressful time of year.

Personally, I’d love to switch up my family’s usual Thanksgiving plans next year with a trip to Florida or another warm destination. I’ve had this impulse for the last few years, but it’s never realistic as a last-minute idea.

Here’s how to make it happen next time:

Reflect on your usual or desired holiday travel

Sometimes you fall into a rut of thinking I “have” to do something because it’s what I’ve always done. Be prepared to make choices instead.

If you always fly across the country to visit family, consider doing a “Friendsgiving” instead this year and using that money toward a long weekend trip for yourself or with a friend or significant other. If your family is also eager to break up the routine, you could all meet at a new destination.

Figure out how much your holiday travel will cost

This could mean calculating the amount you usually spend on family visits and dividing by 11 to figure out how much you need to put aside each month.

If you want to save for a vacation, research current prices and come up with an estimate that you can save toward. Plan to reach your goal by the end of August or September so that you can get the best pricing on airfare, hotel rooms and other travel expenses.

Suggestion: Instead of looking for the lowest price you can possibly find, set a realistic goal for what you think you can get, and set up alerts from sites like Kayak or Hipmunk. Then, when a suitable flight pops up within your budget, grab it. If you obsess about finding the “cheapest” flight, you may wait too long, and end up paying more than you would have otherwise.

When you’re ready to book a flight, use a card like the Citi Premier® Card that offers 3x points per dollar spent on air travel and hotels.

Holiday experiences

What makes your holidays feel festive?

Now that I have kids, my focus has shifted from adult parties to childhood delights, which includes a lot of little things, some of them free and some of them involving money.

This was also my family’s first Christmas in the suburbs, and I hadn’t planned ahead for outdoor lights and other decorations. So our house is dark this year, but I’m hoping to pick up some stuff from post-holiday sales to use next year. This is also a good way to save money on wrapping paper, cards, and other accessories.

Make a list of things you want to do next year

One of my favorite bloggers recommends making a holiday fun list to figure out what experiences you want to have between Thanksgiving and January. With this past season still fresh in your mind, make a list of the things you’d like to do again next year, along with any new things you didn’t get to do this year.

Make a budget for these experiences

Draft a budget for your list of experiences, which could include the cost of throwing a party at your house or buying wine or other gifts for someone else’s party. Add a little extra to spend on gift wrap, a new string of lights, or any other miscellaneous holiday expenses that may arise.

Consider this your “mad money” stash to spend on the holiday experiences you plan and all of the other things–like that overpriced hot chocolate at the Christmas Market–that arise spontaneously.


January is the month of fresh starts, organization, and resolutions. Make next years’ holidays your best yet by preparing throughout the year so you can have a stress-free, worry-free, truly enjoyable holiday.

How do you approach holiday spending? Do you save in advance? Tell us what works for you in the comments.

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About the author

Elizabeth Spencer
Total Articles: 34
Elizabeth Helen Spencer is a personal finance and travel writer based in the Philadelphia area. She holds an MFA in Creative Writing and still nurses a secret fiction writing habit on the side. When not writing for work or pleasure, she loves to sweat it out in a hot yoga class and find new books to read. Elizabeth lives with her husband and two children and has reached the conclusion that "having it all" is a myth.