How Do I Budget for Holiday Gift Shopping?

1. Take stock in cash available for gift spending.

Your budget should be determined by the amount of money you intend to spend and number of gifts you plan to buy each child. As you shop, regularly track how much you have remaining to avoid exceeding budget. If you reach your limit, do not overextend yourself with purchases you cannot afford. Use cash instead of credit cards, which typically have exorbitant interest rates that can trigger or perpetuate debt. By paying with cash, you remain accountable for every dollar spent, gain peace of mind in knowing that you are able to afford the gifts you are buying, and avoid racking up any bills that might hit you hard in the New Year.

2. Gain perspective on what items are of most priority for your child.

Encourage your children to create a wish list that is ordered in priority. Since it is likely that the list will include the latest fads—which can often be pricey and beyond realistic expectations—avoid risk of disappointment and help manage expectations by being candid with your child. Let her know that having a list does not mean that she will get everything on it. Give your children something to look forward to by assuring them that there will be other occasions for receiving gift items that may not be fulfilled during the holidays—and, of course, remind them that they should always be grateful for any gift received.

3. Use the layaway option for large ticket items.

Whenever possible, using layaway plans for bigger buys is a good idea: It helps to hedge against risking waiting until the last minute to make your purchase, but also protects against incurring unnecessary credit card debt. Since layaway items can be saved for and paid off in smaller increments each month without interest or penalty, you can pay off the item over time without breaking the bank.

4. Cash in on coupons.

Store sales and loyalty programs can stretch the value of a dollar. Keep an eye out for coupons and promotions that might be held prior to the holidays, many of which begin on or after Black Friday. When items go on sale, seize the moment and buy it early.

5. Dare to comparison-shop.

Get the best bang for your buck by cross-checking prices online and monitoring store sales and promotions.

6. Consider hand-made gifts.

Instead of store-bought gifts for your child, put some thought into your present by making something special from the heart. Creating a photo album, writing a poem, or making a scrap book are gifts that are sure to keep on giving in the years ahead and can offer much more value in the long haul than something bought at any store. You can make hand-made gifts with your children, as well—sentimental keepsakes that older family members are sure to treasure; it’s not only a great method for streamlining holiday expense, but it presents an opportunity for fun craft time, too.

7. Give back.

Participate in the season of giving by having your family help those less fortunate. One of the most valuable gifts you can give is time for helping someone else in need. Volunteering at a soup kitchen, food pantry, or shelter, or even donating new or unwanted toys, are great ways to get your children involved in spreading holiday cheer—while also helping them realize and appreciate what they have.

8. Trim elsewhere.

Save some money to use shopping by cutting down other holiday expenses. Making decorations, baking cookies, or creating personal holiday cards are enjoyable family activities that help cut down spending, plus they offer memorable family moments that everyone will look forward to each year. They also make for great gifts that can be given to relatives and friends.

9. Don’t buy for everyone.

Help keep holiday costs down by participating in a grab bag or Secret Santa in which each person/family buys a present for one child instead of multiple gifts for every child.