How to Save Money for the Holidays

To save money for the holidays, pick one total for everything the season costs, divide it by the weeks or paychecks you have left, and move that amount into a separate account on payday. Knowing how to save money for holidays is mostly about starting earlier and deciding the total before the shopping starts, not about finding the perfect deal in December.

This guide shows how to set a realistic target, how much to put aside depending on when you start, and where the biggest savings on gifts, food and travel usually come from. The figures and rules mentioned are US-focused and current as of 2026.

How much should you save for the holidays?

Start with your own list, not an average. Write down everyone you buy for, what you plan to spend on each person, and the other seasonal costs: food, hosting, travel, decorations, cards and postage.

For context, the National Retail Federation's 2025 holiday survey found shoppers planned to spend $890.49 per person on average, made up of about $628 on gifts and $263 on food, decorations and greeting cards. Treat that as a reality check on how quickly costs add up, not as a target. Many households spend far less, and travel isn't included in that figure.

A simple holiday budget has five lines:

• Gifts: a limit per person, written next to each name
• Food and hosting: special meals, drinks, baking, hosting supplies
• Travel: fuel, flights, trains, a place to stay
• Decorations and cards: including postage and shipping
• Buffer: about 10% for the things everyone forgets, such as a teacher gift or a last-minute party

How do you build a holiday savings plan?

Divide your total by the number of weeks left until you start shopping, then automate the transfer. The later you start, the bigger each payment, so the start date matters more than any shopping trick.

The table shows the same goal at different starting points. This is the same "plan the big costs first" approach we use in our step-by-step guide to saving money.

Example (hypothetical): the $900 goal is an illustration only. Swap in your own total and count the weeks from today.

If the October or November numbers don't fit your budget, you have two levers: shrink the list or spread the holidays across two years by starting next year's fund in January. Both are better than borrowing.

Make it automatic

The CFPB notes that automatic transfers, round-up programs and split direct deposit are all ways to save without relying on willpower. Schedule the transfer for the day after payday so the money moves before you can spend it, and check your balance so a transfer doesn't trigger an overdraft.

Where should you keep holiday savings?

Keep it out of your checking account. Money that sits next to your bill money tends to get spent on bills.

• A separate savings account at your bank or a different one adds a little friction, which is the point.
• Named savings buckets, if your bank offers them, let you label the money "Holidays" without opening a new account.
• Holiday club accounts are offered by some banks and credit unions. They lock the money in until autumn. Read the rules on early withdrawals and interest before you sign up.

This is short-term money you'll spend within months, so it belongs in an insured savings account, not in investments. A high-yield savings account at an FDIC-insured bank or an NCUA-insured credit union is usually enough.

How can you spend less on gifts without looking cheap?

Gifts are usually the largest part of the bill, so this is where a few decisions save the most.

Agree on the rules early

• Suggest a name draw or gift swap for adult family members, so each person buys one good gift instead of many small ones.
• Agree on a price limit for exchanges with friends and coworkers.
• Give kids a short list to choose from, rather than a wide-open wish list.

Raise this in October or early November. Most people are relieved when someone else suggests spending less.

Shop from a list, not a feed

Write the gift and the limit next to each name before you browse. Shopping without a list is how a $30 gift becomes $30 plus three "while I'm here" items.

Swap money for time

Homemade food, a printed photo, an offer to babysit or a planned day out can mean more than a bought present. They also cost less, though they take time, so plan them early.

Use deals carefully

Sales help only if the item was already on your list. Compare prices before buying, check return windows and remember that shipping costs and fees can cancel a discount.

How do you save on food, travel and decorations?

Seasonal costs creep up because they come in small amounts. A few habits keep them in line.

Our guide on how to save money on groceries covers meal planning and shopping habits that work all year, including the holiday weeks.

Should you use buy now, pay later or credit cards for holiday shopping?

Only for amounts already in your budget, and only if you can repay on time. Spreading the cost doesn't make it smaller; it moves the bill into January.

The CFPB describes buy now, pay later (BNPL) as a type of loan that splits a purchase into a few payments. It warns that:

• Many BNPL loans charge late fees, even when they charge no interest.
• Returns can be messy. Your agreement is with the lender, not the store, so you may need to keep paying while a return or dispute is being resolved.
• It can be tempting to spend more than you would with other ways to pay.

Credit cards carry their own risk: if you don't pay the full balance, interest can quickly erase any rewards or discount. If you already carry card debt, paying it down usually saves more than any holiday discount.

How do you start saving for next year's holidays?

Start in January. The moment the season ends, you know what it really cost, which makes next year's target easy to set.

1. Write down what you actually spent in each category while it's fresh.
2. Set next year's total, adjusting anything that went over.
3. Divide by 50 weeks or by your number of paychecks, and automate it.
4. Treat it as a sinking fund, a pot for a cost you know is coming. Our guide to sinking funds shows how to run several of these at once.

If you like a challenge format, the reverse version of the 52-week money challenge puts the biggest weekly amounts early in the year, so the final weeks don't land on top of holiday spending.

Next steps

This week, list everyone you buy for with a price limit next to each name, add food, travel and decorations, and divide the total by the weeks left. Set up an automatic transfer into a separate account, and suggest a name draw to your family before shopping starts.

For a routine that covers the rest of the year too, use our simple method to save money every month. And if you'd like to bring in extra income for seasonal costs, read our guide to making money online, keeping in mind that results depend on your effort and time.