A woman holds a stack of holiday gift packages wrapped in kraft paper.

Holiday savings tips

With a little extra planning and online research, you can stretch your gift-giving budget this holiday season.

To help make the holiday season less stressful and more budget-friendly, consider these ideas for saving money during the holidays.

Create a holiday budget

Make a list — and, yes, check it twice — but leave no expense unconsidered. For instance, if you illuminate your home's exterior with holiday lights, consider how the additional power load may increase your electric bill, and factor that into your budget. If you're traveling, account for the cost of gas or airfare, lodging, meals, entertainment and more. Don’t forget things like cards and postage. And of course, remember to include how much you will spend on gifts.

You’ll want to establish your budget for the holiday season as soon as possible. Want to help safeguard your spending plan with a budget cushion? Consider adding an additional $100 to $200 to your budget.

Make a shopping list and get an early start

Make a list of everyone you’d like to purchase a gift for and include how much you can spend on each. Start shopping early in the year and track your purchases as you make them. After the holidays, review what you spent and use that to create a holiday budget for next year. Put that money in a holiday savings account earmarked for holiday spending.

If there is less money in your budget than what you planned for, adjust your holiday spending a bit. For instance, if you were intending to provide all the food and beverages for a holiday get together, invite your guests to a potluck instead.

Consider planning a Secret Santa exchange. Each person draws a name, everyone keeps the name they drew a secret and you buy only for that person. A limit is usually applied to the gift.

Use credit with caution

Paying with plastic? Deduct the transaction from your checkbook balance right after you make the purchase. This guarantees the money will be there when your credit card bill arrives. Don't take on any more debt than you can handle.

But how about paying the good old-fashioned way – with cash? Once you have your budget, set aside that much money. Once it’s gone, it’s gone – you’re finished spending. And if you want to purchase online, use some of the money set aside to purchase prepaid cards at retailers that you load with a certain dollar amount. Again, once the money on the card is gone, you’re finished.

Budget and eco friendly holiday tips

Another way to keep your holiday budget under control is by being friendly to our environment. Here are some ideas to help you get started:

  • Invite electronically. Announce your holiday get-together using online services such as Evite.com. This reduces paper waste, makes RSVPs easier for your guests and you will spend less money on cards or postal stamps. 
  • Use natural decorations. Skip the plastic pine cones and aluminum tinsel and instead create festive displays using driftwood, dried grasses, winter berries and other natural items.
  • Pay attention to packaging. Try to purchase gifts with the least amount of packaging. If you're shipping presents, save some extra money by creating your own packing materials using eco friendly products such as recycled newspaper and shredded paper.
  • Make your own gift wrap. Gift wrapping can be a little more fun when you get creative. And store-bought paper can get expensive. You could reuse paper and bags from the year before. After unwrapping gifts, fold the paper and store it for the next year. Try using newspapers, old maps or brown kraft paper. You could even use fabric with yarn tied around the package. Look around your home – you might be surprised at how creative you can become with things you already have – and it won’t cost you a dime. And you might just be helping the environment, too.
  • Offer some gifts unwrapped. The gift of time or shared experiences such as tickets to a show or a sporting event create meaningful memories — and no wrapping paper waste.
  • Lose the disposables. The holidays are a special time of year, so pull out the china, stemware and cutlery. Not only will this add a touch of class to your party, it will reduce the amount of trash and you will spend less on your trip to the store.
  • Opt for LEDs. Outdoor LED holiday lights use up to 90% less electricity than incandescent bulbs and can last 20 to 30 years. Use LED lights indoors as well — on a tree, a mantel, in a menorah and in holiday centerpieces. Save even more energy and help reduce your bill by using a timer to shut lights off automatically.
  • Create coupons. You could give the gift of your time by making homemade “coupons” for babysitting, walking the dog or cleaning the house for those who just don’t have enough time in their schedules. Or you could make gifts – homemade meals, food in jars, a batch of cookies, luxurious bath products or even paintings – wherever your talents lie.

Whether you decide to get creative with homemade or electronic cards, natural décor or reuse gift bags, these ideas may also help your budget and the environment while you have wonderful celebrations with family and friends.

More ways to save money during the holidays

  • Search for discounts online before you buy. Many retailers post online special promotions and coupons that you can apply to purchases. Check what's available before you make a purchase online or head out to the store. Sites like RetailMeNot make finding discounts easy by listing coupon codes for dozens of popular retail sites.
  • Redeem your rewards points. The bonus points that you accumulate through credit cards, airline travel and hotel stays can add up to a gift or two. Cash in your available points to "purchase" a gift for someone on your list.
  • Seek out group discounts. Sites such as Groupon, Living Social and others offer deals and deeply discounted coupons that help you stretch your dollar. Always read the fine print on these offers, taking note of expiration dates and other restrictions, to make sure they fit into your gift-giving plans.
  • Save on shipping. Don't pay for shipping if you don't have to. Plenty of online retailers will forgo shipping charges during the holiday season. They may also ship free to your local store and let you pick up your item there.
  • Spread out the season. If you can't afford new hardcover books for every reader on your list, save a few dollars by giving someone a subscription to a publication that he or she will enjoy throughout the year.
  • Take advantage of bonus offers. Buying perfume for a friend? If you get a free gift with your purchase, earmark it for the preteen on your list.
  • Buy gift cards at a reduced rate. If you are a member at a warehouse store such as Costco or Sam’s Club, you can purchase gift cards for less than the face value. Online sites such as CardCash and Raise also offer gift cards for less than the full retail price. Give the cards as presents — or use them yourself to make your money go farther.
  • Use your smartphone. Rely on shoppers' apps to help you make good purchase decisions. There are many apps that help you compare prices, identify sales and review products — potentially saving you money before you buy.

Here's a bonus holiday savings opportunity: when entertaining around the holidays, try buying in bulk. Wine is often sold at a discount when you buy a case. Go in with a friend or two and you'll all knock a few dollars off the per-bottle price. Or split the cost — and the quantity — of a great entrée for your holiday meal from a warehouse club.

These tips from State Farm® can help you with budgeting at any time of year.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm nor its agents provide tax or legal advice.

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