Even if you’re not planning a glitzy and gift-oriented celebration this year, the holiday season can be an expensive time of the year. Check out these tips to rein in your spending and have a meaningful holiday.

Although this holiday season will be different for many families with the continued uncertainty of the COVID-19 pandemic, one thing will likely remain the same — it will be an expensive time of the year.

There may be fewer parties and less travel than usual, but people will still want to buy gifts for each other — especially for children — to bring some seasonal cheer to an unprecedented year Research from the National Retail Federation shows that on average, Americans are planning to spend more than $1,000 on gifts, food, decor, cards and other holiday expenses.¹ And many people will be doing this with less money than in previous years having been hit hard by the financial repercussions of the pandemic.

To avoid spending too much over the coming weeks, and start the new year  with your finances in good shape, follow our tips for smart budgeting and sensible spending.

1. Start saving early

   The sooner you begin to save for holiday spending, the less strain it will put on your finances as the season approaches. If you put aside a certain amount from your paycheck each month, your fund will grow steadily throughout the year. Also look to take advantage of the Black Friday sales, download money-saving apps and coupons and see if you can trim any of your monthly expenses between now and the end of the year to free up some extra cash. And don’t leave it too late to buy presents — you’ll end up panic buying and over spending.

2. Set a budget and stick to it

   It might sound obvious, but the best way to ensure you don’t spend money you can’t afford is to set a realistic budget for the holidays and then, most importantly, stick to it. A budget is no good if you don’t effectively track your spending — so a separate fund in a dedicated bank account makes it easier to keep holiday spending distinct from your day-to-day expenses.

3. Limit who you buy for

   It’s  easy to get carried away and think you have to buy presents for too many people — particularly those who you don’t stay in close contact with throughout the rest of the year. One popular tactic here is drawing names with your family instead of buying for everyone. Also, consider prioritizing — for example children will obviously be near the top of the list so focus on still making it a magical time of year for them.

4. Create personalized gifts

   A small, thoughtful gift will be appreciated much more than an expensive gift that someone may never use. Avoid the impulse to shop at trendy stores and plan ahead by taking some time to think about what those on your list could really use. Giving something homemade can still show your gratitude and enable you to save money. Photobooks or personalized items from kids to grandparents, for example can be an inexpensive but thoughtful gift.

5. Give time over money

   If you’re struggling to afford a present for somebody, then consider offering your time instead. This could be baby-sitting for friends or family with kids, or running errands for an elderly relative or neighbor. That sort of gift is often the most appreciated as it can make a real difference in their daily lives.

6. Contribute to a charitable organization

   Job losses are cutting some people’s ability to give — and the pandemic has taken its toll on charities too as restrictions have forced many of them rethink their approach to fundraising, including postponing several events and moving others into a virtual environment. This year, it’s more important than ever to give back if it’s possible to do so. Those looking to give might want to start thinking not just about how much they’re donating, but how far those dollars will go so do some research before you donate.

7. Choose cash over credit

   Credit cards can be dangerous when you’re spending with emotion, which many may be doing this year as they can’t travel to see loved ones. People understandably get carried away and suffer a serious financial hangover in the new year. If you have to use a card, choose the one with the lowest interest and pay off the balance as quickly as possible. But a better idea is to stick with cash wherever possible — withdraw the money when you go shopping and then once it’s gone tell yourself you’re done for the day!

If the holiday season is shaping up to be a tough one for you financially, let’s talk. This year, especially, people will want to enjoy the holiday season as much as they can but it’s important to stick to your spending plans. Remember that enjoying quality time with those closest to you is the best gift that anybody can give or receive.

¹https://nrf.com/insights/holiday-and-seasonal-trends/winter-holidays.