15 Financial Mistakes to Avoid This Holiday Season

Don’t break your piggy bank and ruin your budget during the holiday season. Here are the most common financial mistakes to avoid this holiday season. Don’t go in debt, have Christmas on a budget, and follow these holiday money tips to keep your finances on track.

I love the weeks leading up to Christmas and New Year. The ugly sweater parties, the cookie exchanges, mulled wine, all of the celebrations, the cheer, seeing my loved ones gathered in one place, buying gifts for the people I love. 

Like you, I don’t look forward to the financial hit I usually see during the holiday season. It can really suck if you’re not careful. 

🎄 Mistakes to Avoid This Holiday

Look at these financial tips and tricks to survive the holidays. It is very easy to get wrapped up in all the bells and whistles, but just know you can have an incredible holiday season without draining the bank.

I share all my tips to get through the holidays!

1. Not Setting up a Budget

My ultimate tip is to set a holiday budget! Create a budget and plan for “holiday expenses” that you can actually afford.

This will help guide you throughout the holiday season and make it easier for you to stay on track when you are tempted with unplanned purchases. 

Although I recommend sticking to a set budget at any time of the year, I feel that it is most important during the holiday season. If you want to learn more about budgeting, check out these printables we put together about starting a budget and sticking to it. Also download the Free Christmas Savings Challenge to get you ultra motivated going forward. Make it a game and get the whole family involved!

2. Skip Expensive Tree Decor 

Decorating a Christmas tree is a fun tradition to mark the beginning of the holidays. The decorations aren’t cheap though, and it takes a lot of them to fill up a tree! 

If you’re a crafty person or if you have kids, a quick Google search will present you with dozens of fun DIY Christmas tree decorations that can be made easily and cheaply.

Or opt for the trendy “minimalist” Christmas tree look which actually creates a very elegant, stylish statement.

It’s done by simply using a few strands of traditional white lights spiraled around the tree with one color (silver or gold) of Christmas tree ball ornaments to decorate. Just those two decorations and voilà!

3. Plan Holiday Baking 

Baking holiday cookies and treats is an exciting tradition, plus, it’s fun to share them with loved ones. But buying all of the different ingredients for different cookies can be expensive. Especially because some of the leftover ingredients can’t be reused for other recipes. 

Also, check out my Free Holiday Printable Binder to keep your baking and holiday events on track.

Plan your holiday baking ahead of time and focus on baking similar items that you can reuse ingredients for.

Even better — host a cookie exchange where you only need make one batch of cookies and turn it into an excuse to get together with friends and family.

4. Thoughtful Holiday Gift Buying

Gifts are a big part of the holiday season that many of us can’t imagine forgoing. But I’m going to challenge you to try to remember at least five gifts you gave and five gifts you received last year. Could you remember? I couldn’t.

And that tells me that many of the gifts we give and receive aren’t actually necessary or memorable. Of course, the intention behind the gift giving is great. But the truth is that the majority of the gifts we spend money on aren’t actually being used or needed. 

We feel a lot of pressure to buy gifts, but if they aren’t being used, maybe a new approach is necessary.

Idea to Save On Gifts

Instead of buying gifts, try out a no-gift Christmas with your family. Maybe everyone can donate $20 to a charity or an organization that supports families-in-need for a meaningful giving experience.

Another idea is instead of buying gifts for everyone, put all the names in a hat and everyone draws names and only buys ONE gift for the person whose name they drew. This way you can still participate in the gift buying tradition but with much less stress and pressure!

The third option is to host a big family/friend feast where everyone brings lots of fun food, games and activities instead of gifts. Again, an event will always be more memorable than a $20 gift. If you think it doesn’t, scroll through your photos on your phone and notice the ones that make you smile.

5. Buying Everything on Your Family’s List 

If you have a big family, buying multiple gifts for everyone is an exhausting endeavor, plus it’s a big financial stressor. If you want to maintain the gift-giving tradition without experiencing the financial stress that comes with it, set a money limit and set the tradition of each person buying ONE gift that they actually really want or need for each other.

This eliminates overspending and the possibility of buying a gift that the other person doesn’t actually want or need. 

Going forward, set up limits THIS YEAR for NEXT YEAR so there aren’t any upset feelings or mixed messages going forward. I know when my college roommate and I stopped shipping gifts to each others’ kids each year, it felt great to take that unnecessary burden off of the plate. The friendship remained strong, so have no fear there.

Set Gift Price Limits

For example, set a $45 gift limit with the members of your immediate family and have each person write a list of things that they actually want or need (ie, a new winter jacket, a coffee maker, a blender, etc).

If one of the items for a person costs more than $45, for example, a $90 blender. Then two members of the family can go in together to purchase it as a joint gift and that is the ONLY gift they will be giving that person.

6. Expensive Outdoor Blowups 

As much as I love the Christmas spirit I’ve never been one to spend money on the expensive outdoor blowup decorations. I do love looking at them as I drive by though! If these are your thing, then there’s a much cheaper way to do it.

Strategically plan on buying these directly AFTER the Christmas season has ended because these decorations are offered on major discount.

You’ll have them ready for the next holiday season for a fraction of the price! 

7. Spending Money on Expensive Holiday Events.

I love a good Christmas event. But buying an $85 seat at a holiday dinner event or dropping $100 to attend a fancy holiday ball is just a huge amount of money to spend on your holiday budget.

If you’re like me and look forward to Christmas parties all year, then take the initiative to organize some low-key Christmas festivities with your friends and family. Most feel they have to do things, and this is another financial mistakes to avoid this holiday. Balance the season with a few freebie or low cost things and you will look back through your memories with nothing but happiness.

Cookie exchanges, cupcake parties, hot cocoa parties, ugly sweater parties, and winter bonfires are all cheap and fun ways to celebrate the holiday cheer on a budget. 

8. Not Hosting and Providing all Food for a Party. 

If you host a party, make it a potluck. Organize celebrations where everyone brings something. Friends and family are usually more than happy to bring something along when you are offering to host.

Offer to provide something too (like the drinks or the appetizers!) but have people bring everything else. This takes the stress off of you as the hostess, plus people usually enjoy being involved and feeling useful! 

9. Don’t Buy all the Christmas Movies 

I love Christmas movies and usually want to watch as many as possible during the holiday season! There’s nothing more nostalgic and cheery than watching a classic to get into the holiday spirit.

These movies are expensive to buy. Especially if you watch as many as I do. Netflix and other on-demand services offer a huge variety of holiday classics. So always be sure to check there first. If you do want to go the DVD route, then exchange with friends to eliminate unnecessary purchases. 

10. Limit Expensive Holiday Photos

My family loves the tradition of sending a Christmas card with a photo each year. Having this professionally done is pretty expensive though. There are a few clever hacks around this expense!

Buy cards in bulk at a discount at the end of the holiday season to use for the next year. Also, DIY your Christmas photo with a tripod and self-timer!

It’s easier than it sounds and fun. Minimize the list of people you’ll send a card to take away even more of the stress from your yearly Christmas card project. 

If you like the tradition of yearly holiday photos, reserve early for photographer’s “mini sessions” that cost you a fraction of a full shoot.

11. Don’t Buy Stuff Just “because it’s a good deal.” 

This is a huge one for me. All those tempting “good deals” around the holidays really add up and cause a whole lot of financial stress later on.

This one goes back to the first point: make a budget and stick to it! It’s the best way to avoid unnecessary temptations. 

Don’t read every email that comes through or check to see what Amazon is running for their daily special. If you needed it, it would be on your list. Don’t get trapped into buying stuff “because it’s a good deal” in December. You will regret this quickly come January.

12. Not Planning and Ending up Paying for Express Shipping 

This point alone will help you save bunches. Last minute shopping results in spending a whole lot of unnecessary money on express shipping.

Plan your gifts and shipments in advance so that you can use normal shipping which is typically quite reasonably priced. This is one of my biggest financial mistakes to avoid this holiday… shipping can really eat up a budget. So, plan ahead!

13. Not Giving Each Family Member a Budget for Gifts/Events Early On 

This one also adds onto a point we made earlier on but I just think it’s such a crucial saving hack! Setting a price limit for gifts is a huge way to save financial (and mental) stress for your entire family.

Agreeing on it as early on as possible and making it a price point that works for everyone eliminates stress even more! Expectations are huge and if you have a quick family meeting in October/November, you will be happier.

14. Going Overboard on Stocking Stuffers. 

Stocking stuffers are so much fun! They shouldn’t be a big expense though, and it’s so easy to go overboard. The stocking stuffers advertised nowadays makes you feel like you need hundreds of dollars to fill a silly sock. Have you seen the ideas advertised? You don’t need to fall for it.

Buy inexpensive and fun little things to fill stockings with and start buying them early on or slowly throughout the year whenever you spot something cheap that would be fun to add! But I caution you here to not buy “little things” that add up to a large amount of money. Be careful with how much you spend, it can add up quickly and get out of control fast.

Go old school with gum, oranges, hand sanitizer, chapstick, candies, and hand-warmers. Agree to stop putting $25 gift cards and $20 lipstick in stockings, it’s just too much! Going cheap with stocking stuffers can be just as much fun. 

15. Don’t get Caught up in Black Friday Shopping.

Black Friday marketing is sneaky. It tricks us into thinking we’re saving tons of money on good deals, when we’re actually just spending more if you don’t know the price point of the gift you were planning to buy. They are also very sneaky as they work off of your emotions and make you feel bad if you don’t quickly buy.

Make a list of gifts and holiday expenses that align with your set budget BEFORE Black Friday to avoid unplanned Black Friday shopping.

If you happen to find Black Friday deals that fall within your set budget list of holiday expenditures, then go ahead. But otherwise, avoid the temptation! 

ONE MORE TIME THE BIGGEST MISTAKE: Not Budgeting or Setting up Budget for the Season and Sticking to it 

I wanted to add this one again at the end just to stress how important it is! Repeat after me: making a budget and sticking it out until the end of the season is the key to eliminating holiday financial stress!

I hope these financial mistakes to avoid this holiday help you feel successful this holiday season. From holiday shopping, in the kitchen, gift buying, and more. Spending less doesn’t mean you sacrifice, you are just being savvy!

Please share your ideas to help us all save money this holiday season!

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