How to Budget for the Holidays

How to Budget for the Holidays

Jennifer Lyn Oakley - Brand Relations Manager, Brand Relations & Advocacy

The holiday season is coming up, which for many people means debt. Indeed, last year the average American accumulated $1,325 in debt1 over the holidays. This year, many people are facing more financial difficulties than previously, due to the ongoing economic uncertainty around the pandemic. But there are ways to celebrate this time of year without “breaking the bank.” To help kick off the season, here is some advice on how to budget and save money for the holidays from Affinity.

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Create a holiday budget
How should you set up your holiday budget? Begin by making a list of all your expected holiday expenses. This includes gifts, cards, wrapping paper, travel expenses, food and baking supplies, gift exchanges at work and charitable donations. Creating this budget will give you a basic idea of things you need to pay for, so you can save accordingly. Many people only budget for gifts and wonder why money is tight (or why their December credit card balance is so high once they get their bill in January) because they forget about all the incidentals that add up around the holidays.
You also should make sure you take monthly bills and expenses into account before the holiday budget is created. You should never replace a monthly expense or bill to accommodate for the holidays. The holidays are not a reason to miss a bill payment!

Use cash or debit – or a credit card with cash-back rewards
When holiday shopping, try to stick to using cash or a debit card rather than putting everything on a credit card. Credit cards can worsen your post-holiday debt situation, both directly by making you pay more in interest and indirectly by helping you put the amount you’re spending out of mind. When the money for holiday expenses comes directly out of your pocket or account, you’re more likely to spend carefully. But if you do use a credit card, make sure you have a card with low interest rates and generous cash back rewards. If you have an Affinity Pure Rewards Visa® or Affinity Cash Rewards Visa® Signature Credit Card, you’re eligible for special holiday cash-back rewards at popular retailers, including Amazon, Target and Walmart, as well as great benefits for the rest of your holiday purchases.

Take advantage of sales and special offers
Black Friday might not be as big as usual this year because of COVID-related restriction on in-person shopping. But there are still plenty of opportunities to find great deals online. Shopping online can save you money and time as you comparison shop. Don’t forget to look for free shipping codes and allow plenty of time for your gifts to arrive. Many online stores offer extra savings and free shipping over the Black Friday weekend. Be sure to check out the Cyber Monday sales2 as well for a more social distancing-friendly option.
Financial caution around the holidays is healthy and necessary, but don’t let it dampen your holiday spirit. If you follow these budgeting and cost-saving tips, you’ll have a happy season and a happy New Year, even when you review your bills in January!


This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.  

1 Retrieved from

2 Retrieved from