The holidays are right around the corner, and inflation has pinched budgets with rising gas prices, electricity costs, and more.
As such, it isn’t surprising that people plan to spend and travel less this holiday season. NerdWallet recently released its 2026 Holiday Spending report , which found that those surveyed plan to spend 21% less on gifts this holiday season.
While there’s a lot of pressure to spend during the holidays, there are smart strategies you can use to enjoy the season, spend less, and avoid looking like a Grinch.
1. Set a holiday spending cap early
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Before making a list of the gifts you want to buy, establish a budget . This helps you determine how much you can spend without relying on a credit card, since the last thing you want is a hefty credit card bill in January.
On this front, here are some tips to help you:
Make a list: Create a list of everyone you want to buy gifts for and how much you plan to spend on each. As part of this list, include other holiday-related expenses, such as travel, concerts, family gatherings and meals.
Check it twice: As you buy gifts or incur other holiday expenses, review your budget to ensure you’re within your spending limit. If expenses are higher than anticipated, adjust your budget to reduce spending on remaining gifts and expenses.
One way I make the holidays more affordable is by buying gifts throughout the year. It makes the holidays much less stressful since I spread my expenses out. While this might not be practical advice now, it could help you down the road.
2. Navigate holiday travel with aplomb
Chances are, if you’re flying, you already booked your flights. However, with winter weather, short staffing and other issues creating delays, a sudden schedule change can be challenging. Navigating these disruptions smoothly requires a proactive approach.
Download your airline’s app and sign up for real-time notifications on weather delays. Under federal rules , if your flight is significantly delayed or canceled due to airline issues, you are entitled to a full cash refund or prompt rebooking on the next available flight.
When traveling to the airport, opt for rail service, carpooling or having a friend drop you off instead of using Uber, where you’ll fork over an organ for those glorious surge prices.
3. Trim energy costs with efficient lighting
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You may have grand plans to make your house more festive than your neighbors’, but there’s a problem: Electricity prices are high. Even though you want people to admire your home display, you don’t want the higher electric bill that comes with it.
That’s why replacing traditional light strings with LED alternatives can drastically reduce your energy consumption , drawing as little as four to seven watts. You can also use smart timers to have your lights pop on at dusk and shut off around 11 or midnight, lowering your energy usage even more.
And if you don’t want to climb ladders to install more lights, use a projector instead. They can add a festive glow to your home without scaling icy roofs in January to remove lights.
4. Use your credit card perks to lower costs
One way to lower your holiday costs might already be in your wallet. Many credit cards offer generous cash back on everyday purchases, such as groceries, dining, shopping and entertainment.
Discover It offers 5% cash back on the first $1,500 spent on entertainment, restaurants or utilities. That can save you $75 on purchases you’ll make anyway. While that isn’t a lot, those savings add up over the years.
Also, take advantage of generous intro bonuses offered by credit cards. If you plan to open a new card, shift your planned expenses to it so you can hit the spending threshold to earn the bonus without extra debt.
Save on holiday purchases with generous cash back rewards.
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5. Host holiday gatherings for less
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Having friends and family over doesn’t have to cost a fortune in food, decorations or entertainment. With a few thoughtful approaches, you and your guests can enjoy a wonderful time for less. Here’s how:
Host potluck-style meals: Have each guest bring a dish to contribute to the meal. Not only does this ensure you aren’t spending the entire day in the kitchen, but it also significantly reduces your food costs.
Serve batch cocktails: Instead of doing a full bar, have a signature holiday cocktail or sangria prepared in advance.
Use DIY decor: Natural elements like pinecones, evergreen sprigs and warm candlelight can add a festive, cozy touch without the high cost of store-bought items.
Do a white elephant or Yankee Swap: Have everyone bring a wrapped gift with a strict price cap. This takes the stress out of buying gifts, especially if everyone is older and has most of what they want, and it can be a fun game for everyone involved.
Ultimately, the holidays are a wonderful yet busy time of the year. While there is pressure to spend, you shouldn’t have to go into debt to celebrate. Use these tips to set a spending cap and save on all holiday-related expenses. That way, when January arrives, you won’t be facing a sky-high credit card bill.
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