Strategize now for a merry season full of meaningful gifts and celebration—with no regrets later—with these savvy holiday money tips.

By Ariel Foxman
October 09, 2020

You can make this a holiday they’ll remember and still stick to your spending goals.

In a year like 2020, it’s tempting to view the holidays as one last chance to make up for all that we haven’t been able to do. But as grown-ups, it’s on us to deliver seasonal magic (and, of course, fun presents) without blowing our budget. These four steps will set you up for celebrating a December full of joy while avoiding a January financial hangover.

Spend Thoughtfully

Good news: We’re looking at a shopper-friendly season, so no need to focus all your energy on Black Friday sales at midnight. Megastores like Best Buy, Target, and Walmart will be closed on Thanksgiving itself and offering ongoing sales (instead of doorbuster deals) both in brick-and-mortar stores and online.

But first, you’ll want to get on the same page as your partner about spending. “You both want the kids to have a great holiday,” says Tiffany Aliche, financial educator and founder of The Budgetnista. “Figure out what each parent feels comfortable spending and negotiate. Meet somewhere in the middle.” Aliche suggests putting the holiday pot in an online savings account you both see, keeping credit cards out of it, if possible. Your plan will keep you spending sensibly.

“Kids, at the end of the day, just want to be around us,” says Kristin O’Keeffe Merrick, a financial advisor and mother of two based in New Jersey, who jokes that she’s spent “150,000 percent” more time with her children this year than in any other. So now might also be the time to discuss whether a family gift like an online cooking class you all do together could be fun and is within budget.

Get the Kids’ Wish Lists

Choose what you like if you’ve got babies or toddlers. Kids who are age 3 or younger have zero expectations, and everything is new for them. But if your kid is old enough to write to Santa and you may need to scale back this year, Sara Dunnigan, Psy.D., a clinician in the Bay Area (and a new mom) who specializes in family dynamics, advises spelling things out explicitly but creatively. She suggests a script like this: “So this year, Santa wants to make sure that he, his elves, and his reindeer stay supersafe and healthy. That means he will probably be in his workshop less and won’t be able to travel as much.”

If you’re taking extra care to avoid spending money on something the kids don’t want, you could also specify that Santa wants to know each child’s top gifts. Try going through a website or a catalog together so your child can rank their wishes (and practice the life skill of prioritizing wants).

Older kids have probably picked up on Santa not being at the mall and are likely aware already of any penny-pinching you’ve been doing as a family, so honesty is the best policy with them. They’ll get that you want to make any gifts you buy really count. “Parents are afraid to talk about spending limits with kids, but saying the words out loud actually makes the concept feel less scary,” Dr. Dunnigan says. It opens the door for kids to express their desires and for you to set expectations.


Map Out the Gifts

Some parents like organizing their lists for kids around this classic motto: “Something they want, something they need, something to wear, and something to read.” It’s stood the test of time as a guide to keep adults from overbuying and to help kids focus their requests. But even if you don’t follow it exactly, it’s a practical starting point.

Amanda Schosid, a mom of two in Westchester, New York, celebrates both Christmas and Hanukkah, so she’s already begun to plan. “We give one small gift each night of Hanukkah with a bigger gift at the end, so we’ve set a spending limit,” Schosid says. She feels lucky that her extended family does a gift exchange where everyone buys one present, with a spending cap. This year, the exchange will be via Zoom, and each family member will mail their gift to the relative who ultimately receives it.

As you shop for family, look to apps and sites like for coupons, and to tools such as Facebook Marketplace for thrift scores on jokey items like crazy Christmas sweaters. For a fun way to keep track of your gift list, try the app Santa’s Bag.

And if your family finances haven't been negatively impacted this year, consider adding new relatives, friends, and neighbors to your list (while making clear that you expect nothing in return). Enlist your kids to help pick out presents for Toys for Tots and similar charities, letting them start to understand generosity and the real meaning of the season.

As for cash tips, prioritize the people who have heroically stepped up this year, like a home-health aide who took care of an older relative or a sitter who made remote learning work in your house. Then don’t forget heartfelt cards and drawings by your kids for other folks you appreciate. Says Aliche, “It’s a perfect time to wish everyone a happy New Year.”

Find the Joy

Seasonal experiences can also give everyone a lift. Remember when the Grinch tries to stop Christmas by taking all the packages, and it comes anyway in the form of caroling and togetherness?

Many zoos and parks will continue to have holiday light shows. Be mindful of capacity rules and book tickets ahead of time. At home, invent new traditions. “Make colored popcorn garlands and string them everywhere,” Dr. Dunnigan suggests. Play holiday music and watch seasonal shows. Invite an Elf on the Shelf into your house (and find a zillion setup ideas on Pinterest).

Finally, think about a present to your future selves, Merrick suggests, like a little money in a 529 college-savings plan. You can’t erase every disappointment of 2020, but by not traveling or going to loads of parties this year, you can make a deposit toward better times.

This article originally appeared in Parents magazine's November 2020 issue as “A Money Plan for the Holidays.” Want more from the magazine? Sign up for a monthly print subscription here

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