New year, new start: Set your holiday budget now to start 2025 financially strong

The holiday season is a time for giving, celebrating, and sometimes overspending. Expenses can quickly spiral out of control without a holiday budget. But a little planning for the holidays now can make a big difference for your family finances in 2025.

By following a thoughtful holiday budget, you can better manage your holiday expenses, spend wisely, and step into the new year with confidence. A clear spending plan can reduce your holiday stress so you can focus on the more meaningful aspects of the season. And come January, you won’t be facing financial fallout from December spending.

The benefits of creating a holiday budget are catching on. Recent research from Snap Finance found that 79% of surveyed holiday shoppers plan to set a spending budget, and 89% of those shoppers expect to stick to it.

Looking to have a successful financial start to the new year? Here are five things you can do now.

1. Create a holiday budget

A holiday budget is simply a way to plan for, understand, and track what you’re spending. Start by listing everything you typically spend this time of the year, including gifts, travel, hosting, special meals and baking supplies, and entertainment. Look over last year’s spending to jog your memory. Now, decide what you’ll spend this year for each category, leaving some room for unexpected expenses. As you spend for the holidays, track your purchases against your budget and make adjustments as needed.

Whether you’re using paper and pen, a spreadsheet, or an app, budgeting and tracking your expenses will help you make conscious decisions about what you’re spending.

2. Take advantage of holiday deals

There’s no shortage of sales to help stretch your holiday budget and maximize your savings. Pay attention to popular shopping days, such as Black Friday and Cyber Monday, which are known for their significant discounts.

Throughout the season, keep an eye out for deals and sales. Compare prices online and in stores to ensure you’re getting the best deal for your holiday purchases. If you find a better deal, many stores have price-match policies. And keep your receipts. If a price goes down, stores may give you a refund reflecting the new lower price.

3. Keep an eye on your credit

As you shop, it’s tempting to rely on credit cards and other forms of financing. If you can, only finance what you can pay off quickly and keep balances as low as possible. Monitor your credit card statements closely to help ensure you’re not overspending and to watch for fraudulent charges. Put due dates in your calendar to avoid late fees and a hit to your credit score.

One way to avoid paying for the holidays with credit is to find ways to make extra money. You might consider pet sitting, selling items online, tutoring, delivering food – any way you can get paid for your time and skills.

4. Give mindfully

Gift-giving doesn’t have to break the bank. Look for ways to trim your list and focus on meaningful, thoughtful gifts rather than expensive ones. Now is the time to have honest conversations with your extended family and friends about gift-giving limits – or stopping or pausing your holiday gift exchange.

Once you have your list, refer back to your holiday budget. Decide on a spending limit for each person based on what you’ve budgeted for gifts this year. You’ll likely spend more for immediate family and other special people in your life, but the total of all gifts should line up with your budget.

To help meet your spending goals, consider DIY gifts or low-cost experience gifts, such as a homemade dinner or an outing with someone special. This approach not only saves money but also adds a personal touch to your holiday gifts.

5. Plan ahead for post-holiday expenses

As you enjoy and budget for the holiday season, don’t forget to set aside extra funds for January. Planning for post-holiday expenses will help you better manage any credit purchases made during the holidays and avoid the financial pinch that often comes when the festivities end. And while it’s easy to be tempted by discounts, be cautious about overbuying during post-holiday sales.

If you haven’t already, consider opening a dedicated savings account to build a sinking fund for future holiday spending. A sinking fund is a way to save money by setting aside a little bit of money each month. This will help you save for the holidays throughout the year, reducing the financial burden when the season rolls around again.

New year, new financial goals

The holidays don’t have to be a time of excess and overspending. Creating a holiday budget and spending plan – and sticking to it – not only helps you navigate a busy and expensive time of year but also sets you up for a financially strong start in 2025. Taking a few important steps can help ensure your holiday spending is manageable and aligned with your ongoing financial goals.