Spread Holiday Cheer Without Overspending. 7 Ways to Save on Gifts

Two Japanese women look at Christmas ornaments.
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Buying holiday gifts for all your loved ones can add a bunch of financial stress to what’s supposed to be a joyous time of year.

The commercialism of the season encourages you to buy-buy-buy, meaning many of us overspend or even go into debt. Your gifts might put a smile on someone’s face — but at what cost?

Rethink some of your holiday shopping plans if you’re trying to survive Christmas on a budget. Here are seven tactics you can use to spend less.

7 Gift-Giving Strategies to Celebrate Christmas on a Budget

1. Shop with cash.

Embrace a cash envelope budget for holiday spending. Figure out how much you feel comfortable spending on gifts this year, and withdraw that amount from your bank account. Then pay for gifts only with that cash. Once the money’s gone, that’s it. Leave your debit and credit cards at home if you think you’ll be tempted to swipe. You’ll be forced to be strategic about what you buy but thankful that you don’t go over budget.

2. Limit your Christmas list.

Be selective about who you buy presents for. Maybe you get something for your parents but skip giving gifts for your siblings. Let your loved ones know you’re doing Christmas on a budget this year. If you want to minimize some of the awkwardness of not having something to exchange, you could get a box of holiday cards, write a sweet personal message inside and tape a candy cane to the envelope.

3. Get in on group giving to whittle down your Christmas shopping list.

This can be done a few different ways. You can select one gift to give a group of people — like a family board game for your nieces and nephews — rather than buying everyone individual gifts. You could participate in a Secret Santa or similar gift exchange with a nominal spending threshold. Or you can get a group to chip in on a bigger purchase. For example, if you want to buy a gift for your child’s teacher, get a bunch of parents to contribute a few bucks to get something nice.

4. Try the four gift rule.

If you tend to overspend on your kids, take a more lean approach to giving this year. Instead of checking everything off your children’s wish lists, buy only four things — something they want, something they need, something to wear and something to read. Your kids will still get a variety of presents (and probably extra things from the grandparents, too) and you won’t be swimming in credit card charges come Dec. 25.

5. Shop second-hand.

A gift doesn’t have to be brand new to be new to the recipient. Think vintage clothing for your fashion-forward friend or gently-loved toys for your toddler who won’t even know they’re preowned. A recent survey by the second-hand selling app Mercari found three in five Americans said they’re comfortable receiving something second-hand as a gift. One thing about second-hand treasures: You don’t even have to buy anything. Regift unused items you have at home or check to see if there’s anything interesting up for grabs from your local Buy Nothing Group.

These dos and don’ts to holiday shopping at a thrift store will help you select the perfect used gift.

6. Make your own gifts.

There’s a DIY Christmas gift (or DIY stocking stuffer) for every skill level. Add hot cocoa mix to Mason jars for an easy way to do Christmas on a budget. Knit a scarf if you’re an experienced crafter. Though you’ll still spend money on supplies, you’ll likely pay less than store-bought equivalents. And homemade presents show the thought you put into the gift — and it’s the thought that counts.

7. Rethink the “experience” gift.

Opting for experiences rather than material items has grown in popularity, but concert tickets or theme park passes are no easier on the wallet. Instead, reflect on your skill set to see what you could offer up family and friends that can’t be wrapped and tied with a bow. Redo your best friend’s resume or host a one-on-one cooking class for your brother.

Nicole Dow is a senior writer at The Penny Hoarder.