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Christmas in July: Plan Now for a Financially Healthy and Happy Holiday Season

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No matter what the song says about December being the most wonderful time of the year, the holiday season between Thanksgiving and New Year’s is often wonderfully …stressful. The added pressures and obligations surrounding the season can make it hard to enjoy, especially if it causes more financial stress on your budget. That makes it practically impossible to feel any holiday spirit.

So, why not change that dynamic this year? It is possible to rein in the typical holiday overspending spree, and by employing these strategies now, it’s more likely that come December you’ll be cheerfully jingle-belling just like the song says.

Set a Holiday Budget Now

At the height of the holiday season, it’s easy to get carried away as you shop for gifts, plan holiday travel and splurge on things you wouldn’t any other time of year. For many people, the December rush leads to a whopping holiday-induced credit card hangover in January.

To avoid that fate this year, create a holiday budget now when you’re more objective about your finances and how much you can actually afford. Create buckets for all the added expenses that typically go along with the holidays and decide how much you want and can afford to spend on them this year:

  • Gifts: Make a list of everyone you typically buy for and set a per-person gift limit and a total gift limit.
  • Meals: Consider Thanksgiving and any other holiday meals you’ll be hosting or contributing to.
  • Decorations: Think about what you already have and typically need to buy new each holiday.
  • Holiday cards: Account for how many and the type of card you like to send.
  • Travel: Include transportation, lodging, food and any other expected travel-related expenses.
  • Parties: Whether typically hosting or attending, account for the cost of holiday get-togethers, including invitations, hostess gifts, food and beverages.
  • Clothing: Figure in new clothing for you and other family members for holiday activities.
  • Self-care: Don’t forget about haircuts, and manicures and pedicures if they’re your thing.

If you’re unsure how much to budget for each bucket, take a look at last year’s spending and adjust up or down based on your plans for this year.

Open a Separate Savings Account

Now that you know how much you plan to spend, you need to make sure you’ll have that amount of money available. One easy and clean way to do that is to open up a savings account specifically for your holiday spending. This helps you avoid the temptation of spending that money on other things if it stayed in your checking or primary savings account.

Based on your holiday budget total, figure out how much you need to set aside from each paycheck and put that amount in this designated savings account every payday between now and the holidays. If you can’t afford that amount out of your regular paycheck, then consider downsizing your holiday budget or temporarily increasing your income by taking on an online hustle or side gig.

Buy in Increments and Shop the Sales

Another way to avoid a December cash flow crunch is to start buying a few holiday items every month between now and then. Whether it’s a gift or two, or adding a nonperishable holiday meal favorite or more into your weekly grocery cart, this helps spread your holiday spending over a longer time period.

Make the most of these incremental purchases by taking advantage of sales, whether it’s in the grocery store, through the airlines and hotels or at your favorite retailers:

  • Check the weekly grocery circulars for sales on nonperishable frozen, canned or boxed items you typically use at your holiday meals.
  • Monitor airline, hotel and rental car rates for holiday travel deals on sites like Expedia, Travelocity, Priceline and
  • Long before Black Friday and Cyber Monday, shop for holiday gifts at the big summer and early fall sale events, such as the Fourth of July, Labor Day, Back-to-School Tax-Free Weekends and Amazon Prime Day, which is expected in either June or July this year.

Talk to Family About Unrealistic Expectations

One last important tip: Over the summer, start a family discussion about realistically managing holiday expectations and desires so that they don’t overwhelm anyone’s budget this year. Here are some ideas that can lead to a financially healthier and happier holiday season:

  • Suggest picking one name and buying a special gift for that person rather than buying gifts for every family member or friend.
  • Recommend that everyone agree to a maximum dollar gift limit.
  • Discuss giving experiences, such as a ski day or theater tickets, rather than material gifts that tend to go unused or underappreciated.
  • Consider sharing travel and hosting burdens by divvying up the holidays between households.

The sooner you start planning for this year’s holidays, the more likely they are to actually feel wonderful.

Editor’s note: Quorum is not affiliated with any of the companies mentioned in this article and derives no benefit from these businesses for placement in this article.

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CUNA 2023 diamond award trophy icon

CUNA 2023 Diamond Award Winner

Financial Education

Quorum derives no benefit from businesses in return for placement in this blog.

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