Monthly Finance Message:

Small Steps to Prepare for Holiday Expenses

November 2014

Barbara O’Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension

The Small Steps to Health and Wealth™ program is built upon the premise that small, positive actions improve health and personal finances over time. The “small steps principle” also applies to holiday spending. Below are twelve small steps to prepare for holiday expenses during the next two months:

  • Develop a Spending Plan (Budget) - Decide how much you’ll spend for holiday expenses such as gifts, travel, entertaining, postage and shipping, etc. Aim to spend no more than 1.5% to 2% of your annual gross income (e.g., $600 to $800 if you have a household income of $40,000). Try using a good holiday spending worksheet.
  • Make a List - Identify everyone you’ll buy gifts for and divide your spending among them. For example, some people might get $25 items and others might get gifts worth $10. The total for everyone should match your gift budget.
  • Do Some Research - Review product and service pricing information found on Web sites and in store mailers, radio and television ads, newspaper circulars, QR codes, and social media messages. For example, if you “like” a retailer on Facebook or follow it on Twitter, you might hear about special “flash sales” or unique product discount codes where prices are reduced for a limited period of time. Phone apps can also help you compare prices.
  • Negotiate with Retailers - Once you have “real time” pricing information, you are in a position to negotiate the price that you pay for products and services. Many retailers will match a competitor’s prices rather than lose a sale. Bring along relevant pricing information such as a newspaper ad or online price quote.
  • “Chunk” Your Spending - Figure out how many pay periods you can spread holiday expenses over. For example, six paychecks from November through January if you are paid bi-weekly. Then figure out how much you can spend each pay period. For example, if you plan to spend a total of $600 on holiday expenses, try to spend $100 during each pay period so expenses are spread out. If you get a year-end bonus at work, you could spend more during that pay cycle.
  • Save to Spend - If you prefer to do your holiday shopping at the last minute, an alternative to “chunked spending” is “chunked saving” to spend later. Start now to set aside the money you need in the seven weeks between early November and the end of December. “Find” this money by increasing income and/or reducing expenses.
  • Shop Year-Round - An alternative to saving and shopping for holiday expenses at the very end of the year is to shop year-round a little at a time to take advantage of seasonal sales. For example, spending $40 to $50 a month instead of hundreds of dollars at the end of the year.
  • Be Thrifty - Many thrift shops offer great buys on clothing, housewares, and other items. Some purchases may even be brand new with the original price tags or boxes. As an added plus, store proceeds often benefit non-profit charities.
  • Give Non-Cash Gifts - An example is gifting services such as gardening, “spring cleaning,” babysitting, pet sitting, or transportation. Giving “the gift of time” is especially appreciated by people who don’t need any more “stuff.” Another example of non-cash gifting is home-made foods.
  • Be Flexible with Holiday Travel Plans - Avoid “peak” travel dates when airfares are high and blackout dates preclude the use of frequent flyer miles. Instead, save on holiday travel expenses by booking early and/or flying on dates that are not right up against a holiday. By doing this, airfares will cost less and frequent flyer points can be used.
  • Take a Staycation - Look for free or low-cost forms of entertainment during the holidays such as concerts, plays, and children’s programs at public libraries. Plan some fun trips to nearby places that you have always wanted to visit.
  • Be Charitable - Instead of making multiple gifts to family or co-workers, consider pooling your resources to make a sizable donation to a charitable cause that you all believe in.


  1. Rutgers
  2. Executive Dean of Agriculture and Natural Resources
  3. School of Environmental and Biological Sciences