As we roll into November and all the nostalgia this time of year brings, the decor in each and every store we stroll into is a steadfast reminder that the holiday season is upon us. You might be one of the big planners who’s been budgeting and buying Christmas gifts all year or who has carefully scheduled your family calendar for maximum fun. In all the excitement, you can’t deny that the holidays can get expensive, and get expensive fast.

After a year like 2020, you might be champing at the bit to spend, spend, spend this holiday season. It’s natural to want the holidays this year to feel like a celebration of surviving the past 18 months –– and in so doing either stretching your budget as thin as possible or ignoring it altogether. But thankfully that doesn’t have to be the case. You can still have a great holiday season full of gifts, food, friends, and fun without driving yourself into debt or complete financial ruin.

Here are a few tried and true ways on how to budget for the holidays so that you have a great holiday season without breaking the bank.

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Sinking Funds

Typically, I’d be giving you this advice in January, but the good news is that sinking funds can be helpful anytime. I like to think of sinking funds as piggy banks –– a container for cash you set aside each month (or from each paycheck) with a specific purchase in mind.

Just because we’re already in the holiday season doesn’t mean you can’t take advantage of this budgeting tool. A great way to utilize the sinking fund method is to figure out your total budget for the holidays and divide that by the number of paychecks you’ll receive from now until the end of December. That number is how much you’ll need to set aside from each payday to fully fund your budget. (It’s going to be a bit tougher this year for those celebrating Hanukkah, as it falls right after Thanksgiving this year!) For example, if your gifting budget is $600, and you’ll get three paychecks between now and December 25th, you’ll want to save approximately $200 per paycheck.

If you don’t have time to take advantage of this particular tip this year, January is a great time to start a holiday sinking fund. To give it a little extra pep, I recommend keeping your sinking funds in an HYSA (high-yield savings account) so that you accrue a higher rate of interest while you’re saving over the year! HYSA’s are just like your bank’s regular savings account, except they offer up to 50x the interest –– a deal that’s not too good to be true and great for helping your cash grow with inflation!

Learn more about budgeting and tracking your spending with our budgeting resource!


You might have to *gasp* visit an actual store for this one, but layaway is another excellent option if you need a little more time to get your holiday budget together. Many department and retail stores offer a layaway program that gives you extra time to pay for your gifts while ensuring they don’t get snatched up like a Tickle Me Elmo circa 1996. The one caveat is that you need to have whatever gift or gifts you put on layaway paid in full before you can take them home, so make sure you can whatever the amount is paid off before you plan on gifting it.

Layaway works well with sinking funds because you know exactly how much your gifts will cost (taxes and all), so you’ll be able to create a better budgeting plan over these next few paychecks.


Second-hand stores have seen a massive resurgence in recent years as we grapple with fast fashion and heightened consumerism. Thrifting has become a common way to hunt for what you need (and want) without contributing to wasteful practices or paying inflated prices. You can find everything from furniture pieces to housewares, toys, clothing, books, shoes, and other accessories.

Thrifting isn’t for the faint of heart –– you’ll have to really work for the winning finds, but it can be so worth it when you do uncover that one-of-a-kind gift. If you’re especially crafty, thrift stores are great places to find loved items that need a little sprucing! Speaking of crafters …

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Crafting is an excellent and often cost-effective idea for gifts, especially if you already have artistic leanings. Everything from scarves to paintings, jewelry, custom decor, and more make for delightful gifts with a personal touch. So many of us picked up new hobbies in the last year –– put them to good use!

However, I’ll caution you that there’s a bit of danger in this suggestion, and if you’ve ever tried to DIY anything you’ll know exactly what I’m talking about. Sometimes, in our quest to save money by making something DIY, we end up spending just as much cash on the ingredients or supplies that it would have been more useful to support a local artisan or buy an item new.

If you’re crafting a gift because you’d rather give something handmade, and the cost is not the issue, go for it. But if you’re trying to budget for the holidays, make sure you run the numbers of all the supplies you’ll need compared to the cost of buying the item already made.

Setting Healthy Boundaries

If there’s one thing we know, it’s that whenever families get together, there can be tension. Pair that with the fact that money is the No. 1 stressor for adults in the United States –– the holidays are prime time for uncomfortable conversations, guilt, and shame to arise.

You are so much more than the gifts you give or the amount of money you make. It’s more than OK to go into the holidays with clear eyes and a set of healthy boundaries, especially when it comes to your budget. It may be hard if you’re still recovering from the pandemic and are not financially able to do as much as you had been able to in the past –– but it’s worth it to remind yourself that your value is not in your wallet and that this year has been anything but normal.

Setting healthy boundaries looks like:

  • Setting a budget for the holidays and sticking to it
  • Using “no” as a complete sentence
  • Not spreading your energy too thin across friends and family

Boundaries are in place to protect you andothers –– don’t feel guilty about setting them and holding them, even when it’s uncomfortable.

However you plan to celebrate this season, I (and the rest of the Million Stories team) hope you have a holiday filled with joy, love, and peace.

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