The Smartest Ways to Save Money on Christmas Gifts

Editorial Note:

It’s almost Christmas, which means it’s time to buy gifts for the ones you love. Unfortunately, many of us overspend when we shop for our loved ones. In 2017, the average American shopper accumulated $1,054 in new debt over the Christmas season. 44% of us incurred $1,000 of holiday debt, while 5% of us bought our way into $5,000 or more.

The National Retail Federation found that Americans spent more money on gifts in 2018 than in previous years. Data from a Gallup study supports this. American adults are projected to spend $920 per person on Christmas gifts in 2019, an increase from $885 last year. Overall, the total 2019 holiday spending is scheduled to exceed $1 trillion nationwide.

So, how do we save money on Christmas gifts and avoid becoming part of this statistic? We’ve developed a guide to help prevent your overspending. If you’re concerned that you’ll sacrifice the magic of Christmas by trying to save money, don’t be. You’ll still be able to provide something special for every person on your list.

Ways to Save Money on Christmas Gifts

The advice on this list can be taken piecemeal, but it will be most effective if used together.

Make a budget

Determine how much you will spend overall for your gifts. Make a realistic assumption that takes into account how much you are able to spend. A budget that is too tight will be hard to keep, but a budget too big will saddle you with debt.

Plan your gift list in advance

Time is your friend. Sit down and determine your recipients and possible gift ideas early. Check it twice for omissions, errors, and opportunities to trim the list. Starting this process early will allow you to take the best advantage of upcoming sales.

Take advantage of big sales

Major sales occur around major holidays, like Labor Day or Thanksgiving. Some big sales, like Amazon Prime Day, are not associated with any particular holiday but offer great savings regardless. For sale days like Black Friday, having a plan is helpful, especially for popular items that may sell out fast. You may need the help of family or friends when shopping.

Rack up credit card points

The trick is to use your credit card when earning points. This means at the minimum you need to pay off your balance in full every month.

To maximize your earning potential, there are two things you need to do. First, take advantage of stores’ bonus days; and second, spread out your transactions.

Let’s say there’s a promotion earning you 10,000 bonus points for spending $40 (before taxes) on your credit cards. Receiving 10,000 bonus points is equivalent to $10, netting you 25% cash back on your card.

This is in addition to the points you would earn normally. Your shopping totals $252, before taxes. You could pay for the items in one transaction, but you would only earn 10,000 points. Instead, breaking up your items into 6 purchases just over $40 each can earn 6 x 10,000 points. You’ve just earned $60 cash back on the same items.

Save Money Buying Christmas Presents

If you plan to use this strategy, pay attention to the fine print. The promotion may place limits on the card type, for example. Using your primary card may not allow you to maximize the promotion’s cashback. If that’s the case, consider using your specialty credit card, especially if it is a store card with no annual fee. Not only can you receive the maximum cash back, but the card’s benefits also won’t decrease due to the annual fee. When possible, try to double the points. Credit cards used with a loyalty card can sometimes significantly boost the number of points you can earn. A store credit card may potentially double your rewards.

Look for coupons

Coupons are much easier to locate online. A quick Google search will find what is available. Some stores send exclusive coupons to their loyalty members by mail, email, and text. Sometimes, the cashier may have a spare coupon he or she will use if you ask nicely.

Shop from your neighbors

Use Facebook groups and Craigslist for good quality (previously) used items. (If using this method, beware of scams that sellers may use, and always pay attention to your safety.)

Create homemade gifts

Some of the sweetest gifts are inexpensive and made with love. Send some sugar cookies or popcorn to family members. If you know how to knit or do some other craft, consider making a gift if you have the time.

Save on wrapping

There are some ways to avoid paying for fancy gift paper. First, see if the store or seller will do free gift-wrapping in-store, or before shipping your gift to the recipient. If not, other options include using brown paper, newspapers, or reusing carefully preserved wrapping paper from last year.

Focus on the celebration

The true meaning of Christmas is not in what is found under the tree. Fill your celebration with cherished memories by spending time with loved ones.

Go on vacation

It doesn’t have to be an expensive one. Pack the kids in the car and visit extended family. Rent a hotel room or Airbnb for a few days. If the weather allows, try camping. Santa will know where to find you.

Purchase a family gift

Instead of getting several individual gifts, consider purchasing an item most, if not all, the family will enjoy. This may be a television, a gaming system, or a board game, for example.

Use your points to purchase gift cards

If you’re stumped for ideas as to what to get the family, consider gift cards. Many credit cards will allow you to purchase gift cards with the points you’ve earned on your account. Remember, Amazon has (almost) everything, from A to Z, everyone loves Target, and Walmart has what they’re looking for.

Know your sales cycles

Most goods are cyclic, and you can score deep discounts if you know when to buy. For example, stores put electronics on sale in January to make room for newer versions coming in. Stores generally tend to discount open box returns from customers.  Mid- to late winter is a good time to get snow-gear. Stores will be discounting items for quick sale to make room for the spring and summer collections.

Look for free shipping

Some stores automatically grant this once you pass a spending threshold. You can get free shipping by purchasing gifts through your credit card shopping portal or choosing the slowest delivery option. In other cases, certain credit cards offer fast, free shipping through third-party companies, like Shoprunner. You may need to sign up, shop through a particular portal, or use a browser plug-in for it to work.

Let your online purchases sit in the cart for a while before purchasing

Retailers want to close the sale and will often email you discounts to motivate you to complete the sale.

Look for ways to maximize your purchase

Many credit card portals have links to popular shopping sites: use this method and you may earn extra reward points. Third-party sites like may offer additional rebates on the products you want in the form of cash back.

Save Money

Make This Holiday Season Debt-Free

The best gift to give yourself is starting the New Year with as little debt as possible. Ending December with more money in your bank sounds like an excellent way to ring in the new year. Using the guide above, you won’t need to be miserly like Scrooge to save money on Christmas gifts. All it takes is a little work up front, and some time to execute the plan. You, your loved ones, and your bank account will celebrate a joyful holiday season this year.

Roman Zelvenschi

I started a digital marketing agency Romanz Media Group Inc. 12 years ago. Running my own business quickly taught me the importance of cash flow. Making sales was not enough, I had to have money in the bank to pay the vendors, staff and personal bills.

During those early stages of the company I learned how to get creative with debt and to save on interest cost. I paid for everything I could with a credit card to both get more points and to extend the payment date by 25 days (credit card grace period). I then utilized a 0% balance transfer offers to rotate this debt.

I learned a lot during this process and made a lot of mistakes. My key lesson is that the most important part of being financially independent is how much I managed to save, rather than how much I earned. Staying disciplined with savings and tracking spending is not easy and I tried many different methods to stay on track.

FinancialFreedom.Guru is a side project where I and my staff are trying to share the practical knowledge on how to understand finances and to build wealth.

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