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Creating a Holiday Gift-Giving Budget

Holiday shopping season is around the corner, and this year, perhaps more than ever, creating a shopping and budget plan in advance can be key to curbing your spending during times of high inflation. As WRAL of Raleigh points out, “People are recalculating how much they can spend on gifts and spreading out their Christmas shopping, meaning they’re starting sooner,” in an attempt to avoid extra holiday stress and minimize the impact of those rising prices. In this post we’ll give you some additional tips for how to create a useful holiday budget, from opening a Christmas Savings Account to taking advantage of online deals, in order to stretch your dollar even further. Keep reading to find out more!


Create your shopping budget.

The average person spends over $1,000 each year on holiday shopping, and if you have a large list, you may even spend more. Before you begin buying presents, create an inclusive budget for the season that includes all your extra spending, including specific funds set aside for food, travel, and charitable donations, as well as gifts. Once you have a number you feel comfortable spending, you can determine what a reasonable amount to spend on individuals on your list might be.

What is a fair limit to spend for each person on your list? That number will vary greatly based on your relationship, your gift-giving traditions, and your current financial picture. Dividing your list into spending categories—close friends, immediate family, extended family, colleagues, and service providers—is an important first step. Once you achieve this, here are three different ways to help you set your individual spending budgets:

  1. Set aside a specific dollar amount for each group as a whole, and divide it evenly among the individuals in that group
  2. Set aside a percentage of your budget for each group as a whole, and then multiply that by your total gift budget.
  3. Determine a set dollar amount for individuals in each group, then add it up to see if it fits in your budget, adjusting as needed.


Use your budget to build your shopping list.

Once you have an idea of how much you want to spend, it’s time to start building a shopping list. Start formulating your shopping list early so that you can keep an eye out for deals, especially on high-ticket items. Beware that inflation may diminish your spending power this holiday—be okay with knocking items off your list if it means avoiding unnecessary holiday debt. Other ways to make your budget extend as far as it can include:

  • Utilize our Money Tracker tool to organize your finances and keep your budget on track.
  • Using a price tracker to watch for falling prices on more expensive items, or to ensure you’re getting a good deal.
  • Using tools like Honey to look for deals online.
  • Signing up for newsletters for your favorite retailers to get notifications on sales, and maybe even earn a discount code.
  • Check out your credit card rewards or points to see if you can use any for holiday shopping.


Use your credit card responsibly.

While credit cards can offer wonderful rewards for savvy shoppers, if you spend more than you can pay back in a billing cycle, you could be setting yourself up for debt into the new year. About 30% of consumers fall into this category, still working on their past holiday spending a year later. Fortunately, with a few smart spending and saving practices, you can utilize cards to your advantage, and even boost your credit score with a regular habit of on-time payments. Be strategic—familiarize yourself with your credit cards’ interest rates and perks, which could vary based on the type of purchase. Save over the course of the year to be sure you can pay off the balance in January. And be sure to use your cash back bonuses or other rewards to cover holiday expenses. To learn more about our rewards card options at American National Bank & Trust and apply for a credit card, visit our Personal Credit Cards page.


Save on gas—take advantage of online shopping.

Though gas prices have come down, running all over town for all your small purchases can be an unexpected additional expense this time of year that can eat into your budget. Organizing your trips is a great way to reduce them. But increasing your online purchases can save you time and minimize driving and avoid holiday traffic. And some companies even offer free gift wrap! Make an effort to support small local businesses—but for more general purchases, consider moving them online. Start early (to avoid shipping delays or extra shipping costs), take advantage of Cyber Monday deals, and reduce stress as the holidays draw near.


Create a Christmas Easy Save Account.

Lastly, start saving for the holiday in advance, rather than paying it off (with interest!) after the fact. Our Specialty Savings Accounts—including our Christmas Easy Save Account—are great places to set aside funds for holiday spending. Automatic deposits from your American National Bank & Trust checking account can help you accumulate your spending money little-by-little for the duration of the year, allowing you to set a budget early, stick to your spending plan, and even earn a little interest in the process. It’s not too late to sign up for one now—and to keep it going for next year, too! Visit your local branch today to open a holiday savings account.