Tough Year for Holiday Spending? Here are 9 Ways to Stretch Your Budget

Key takeaways:

• Rising prices and lingering debt make smart holiday budgeting more important than ever in 2025.
• Simple strategies like flexible travel, loyalty programs and discounted gift cards can help stretch your budget. 
• With the right planning tools, you can enjoy the holidays without feeling stressed and overspending.

It’s the most wonderful time of the year for holiday budget tips.

Managing holiday expenses in 2025 is more challenging than ever before. The majority of consumers expect tariffs to make gifts more expensive, and nearly a third of Americans are still carrying credit card debt from last year’s gift shopping, according to a survey from NerdWallet.

Still, survey respondents expect to spend an average of $1,107 on presents alone — $182 more than last year. To avoid racking up debt that may take months to pay off, consider using these holiday budget tips to help you enjoy the season without overspending.

1. Work backwards

Start by reverse-engineering your holiday season spending. Instead of starting with “what do I need to buy?” begin with a total you can afford without going into debt. Then divide that amount among categories — gifts, travel, food, etc. — to determine how much you can realistically spend.

If this number means scaling back your dream holiday plans, consider trade-offs or additional strategies to make up the difference.

2. Travel smart

If traveling to see friends or family is a must during the holidays, being flexible with timing can be a powerful holiday spending strategy.

For example, flying a few days before Christmas can be pricey. But, if you don’t mind flying domestically on Christmas Eve or Christmas Day, you can save close to 30% on airfare, compared to flights on the days before, depending on your destination.

At the very least, travelers should avoid booking arrival or departure flights on the Saturday before or after Christmas. These are, on average, the most expensive days to fly around the holiday season.

While flying on Christmas Eve or Christmas Day means risking missing events due to inclement weather and flight delays, it’s a significant way to save on necessary holiday travel. 

3. Shop with discounted gift cards

If you have a gift in mind from a specific retailer, browse authorized reseller websites to purchase discounted gift cards. You can find these for up to 20% off, meaning you’ll end up saving at the retailer even if the item is full price. Plus, gift cards can be stacked with other coupon codes or sales, which could lead to more potential savings.

If you choose to shop the secondary gift card market, make sure to do so through a trusted retailer, as some sites may be scams. A good rule of thumb is that if the discounted gift card price sounds too good to be true, it probably is.

4. Consider a cash discount

Paying for goods and services with cash instead of credit is a great way to avoid accruing debt during the holidays. Not only does it keep your budget in line, it might actually help you save money in the long term. While not overwhelmingly common, discounts for cash purchases have risen in the last 10 years and are expected to become more widespread.  

Paying for an item, service or meal in cash will likely save you 2% to 4% (offsetting the store’s credit card fees). It doesn't sound like a lot, but those small percentages can add up — especially on larger purchases.

You’re most likely to encounter cash discounts at local small businesses. Some stores may advertise a cash discount on the menu or at checkout. You can always research a store beforehand to see if they’ll give you a discount for paying in cash, and it’s also worth asking at checkout.

5. Cut back on other spending

If you want to stretch your holiday budget without sacrificing during the season, look for ways to cut back on other spending to offset the costs.

That could mean doing any of the following for a few weeks leading up to the holidays:

• Forgo dining at restaurants 
•  Have a “no-spend day” at least once a week
• Cancel or pause subscription services
• Avoid unnecessary purchases
• Postpone needed purchases to take advantage of after-holiday sales

When it comes to budgeting, money won’t just appear. Making small but meaningful budget cuts before the holidays can help offset the added expenses of the season. 

6. Check loyalty programs

When was the last time you checked the perks of membership in the organizations you belong to? Many of these entitle you to discounts on store purchases, hotel stays, restaurants and more. You might even qualify for breaks on shipping — a cost-saving perk during the holidays. 

If you have a favorite retailer and you're not a loyalty program member, consider signing up. It's an easy way to earn points and other perks for regular purchases. Members of the military, teachers, veterans, doctors and first responders, in particular, may be eligible for discounts at certain stores.

Even if a retailer doesn’t advertise a discount for your membership, it’s worth asking. You might be surprised by what you get just by asking nicely.

7. Schedule bills

The holiday season can be busy. In the rush, don't forget to pay your bills. Penalties ruin your budget.

The average credit card late fee is $32. To keep late fees from eating into your holiday budget, schedule payments ahead of time using tools like Bill Pay. Here you can manage all of your bills in one place, making it easier to stay on top of your finances — so you can avoid late charges or fees. 

8. Bulk buy “host” gifts

’Tis the season of gathering with family and friends. If you like to arrive with a gift for the host, avoid the premium of purchasing it at the last minute. It may feel like a simple gesture — a bottle of wine here, a flower arrangement there — but every unplanned purchase sends your budget sideways.

Instead, simplify and stay on track by buying host gifts in bulk. With a few of these on hand for the season, you won’t be making purchases under pressure. Personalize these generic gifts with crisp wrapping paper and a thoughtful, handwritten note.

Well-received host gifts include:

• Candles
• Gourmet coffee or hot cocoa
• Bottles of wine
• Nice notebooks, pens or puzzles
• Spices

Still, stay true to your budget: Be careful not to overbuy. If you do, save receipts so you can return unused gifts after the holidays.

9. Find “free money”

Another practical holiday spending strategy is using money you’ve already accrued. It's like finding cash in the couch cushions.

Scan your cashback credit cards, grocery store rewards and other loyalty point accounts for unused perks. You can use these perks to pay down a credit card balance, purchase gift cards or get a discount on your next purchase at the store.

Having an inventory of your “free money” can help you plan your holiday spending: It may influence where and how you buy gifts, book travel or dine out during the holiday season. And in saving you money, it could make the season that much merrier.

Put plans into action with Northwest Bank

With a basic plan and the right tools in place, budgeting for the holidays in 2025 is entirely possible. Northwest is here with simple-to-use digital tools to manage holiday spending, making it even easier.

Northwest customers use tools like Bill Pay to schedule payments in advance, freeing up cash flow for the month. If you're a new customer and you've just opened a Northwest account, learn more about how Northwest Bank can help today, and put these holiday money tips into action.