5 smart ways to manage your holiday shopping budget

Key takeaways:

• Make a plan and start looking for deals early.
• Use buy now, pay later tools to pay for purchases in installments, which spreads the cost of in-store purchases over several months.
• Collect gift cards and rewards points to pay for additional gifts.
• Avoid holiday spending traps by understanding normal pricing and resisting pressure from marketing messages.

Between gifts, decorations, food, and celebrations, holiday shopping can be stressful. Once you get inside a store for a sale, stress and pressure can make it difficult to stick to a budget.

Flash sales, bundle deals, and base pricing changes can make it hard to identify what is and isn’t a good value. The rush of people, limited time, and overall holiday stress can make shopping an overwhelming experience.

One way to manage your budget over the holidays is to spread out the cost of purchases that you make in stores. With careful budgeting and buy now, pay later financing options, you can reduce the stress that comes with holiday shopping.

Smart ways to spread the cost of holiday shopping in-store

1. Create a detailed holiday budget

The first step is to create a holiday budget and walk into the store with a plan. If you know how much you’re spending ahead of time, you can feel more confident in the choices you make. Follow these tips for prioritizing your budget:

• Start early: The holiday shopping season is long, with multiple anticipated sale dates. Start your gift planning early to give yourself the best chance of catching a deal or avoiding the biggest shopping traffic days.
• Set a clear budget: Plan your holiday budget early, and consider giving each important person in your life a gift budget.
• Prioritize gifts: Decide which gifts are “must-haves” and which are “nice-to-haves,” and get the most necessary ones first, or ensure that you save budget for them.
• Leverage payment flexibility: Prepare for the holidays by assessing payment methods and credit. Determine how much you plan to put on credit cards or buy now, pay later options.
• Check prices to understand the impact of tariffs: The pricing fallout of tariffs is still ongoing, with potential price changes on the horizon. Pay attention to the brands and stores you plan to buy from, as they may send out updates about price increases.
• Time your purchase: Use information about price increases, sale dates, early holiday special offers, and last-minute deals to stretch your budget. Some stores may offer incentives for shopping early or may have in-store promotions for limited periods.

2. Use buy now, pay later services to split large payments

Buy now, pay later is a type of payment plan you can use to spread the costs of purchases over time. You can select a timeframe that works for you, and since most applications only involve soft credit checks, you can typically get approval in moments.

Buy now, pay later is also not a revolving line of credit, which means that once you finish paying off the loan, you don’t need to manage it anymore.

When you’re managing large expenses over the winter, buy now, pay later can help your budget go further.

• Create a monthly payments budget: Plan a budget over the next 3, 6, or 12 months that includes space for payments. For example, if you spread a $400 purchase over 6 months, you should expect to budget for around $70 per item, depending on interest and fees.
• Plan big-ticket items early: If you plan for your biggest purchases, you can absorb them into your budget earlier in the year. Then, you can confidently shop the holiday rush, knowing the important stuff is already taken care of.
• Use integrated payment apps: Instead of applying for store cards, you can use the PayPal app to apply for financing at checkout. According to the Wall Street Journal, PayPal's Pay in 4¹ is the 'Best Overall' Buy Now, Pay Later app, but it’s only available online.⁴ Now, with PayPal Pay Monthly in-store feature, you can use buy now, pay later at participating retailers.²

Example holiday shopping budget

Here’s an example of how you could fit multiple large purchases into a monthly budget using buy now, pay later:

3. Research future deals to find the best offers

Deals and sales can help you make the most of your budget, but you need to do your research to catch the best in-store promotions. Sometimes, waiting for a big sale day like Black Friday to save money might be worth it, but looking for early deals can help you:

• Spread purchases out over a longer period of time.
• Get guaranteed deals outside of major shopping days.
• Get items while stores still have high stocks.

Taking a guaranteed deal early can make your life much easier, even if the big sale days haven’t happened yet. But, pay attention to promotional materials from the stores you plan to shop at. If they’re advertising a better deal later on, or offering specific in-store benefits on a certain day, it may be worth it to wait. Here are a few holiday shopping research tips:

• Use price comparison tools: If you know what items you want, you can use websites and apps to track their prices across multiple retailers. Look out for an alert that an item you want is below its regular retail price.
• Look for in-store bundles and promotions: Many retailers offer bundles and unique promotions to encourage you to shop in the store. If you plan your shopping for a single store, you could get additional money off.
• Plan your shopping across multiple promotion days: The holidays have many opportunities for sales. Don’t only focus on Black Friday, look for other deal opportunities. In addition to individual days, many stores run longer-term fall sales.

4. Apply any saved gift cards or loyalty points

The holidays are a great time to check to see whether you have unused rewards you could apply toward purchases. It’s also a great time to look into new rewards accounts to build up points you could use during holiday shopping. These are a few ways you might find unexpected rewards:

• Look for old gift cards: Check junk drawers, wallets, and purses for old gift cards. You might be surprised by what gets forgotten!
• Log into your accounts with retailers: Check your loyalty points and reward programs where you already shop. For example, you might have points at your local grocery store that you could use in the housewares or garden sections.
• Check credit cards for accrued points: Most credit cards offer rewards, whether cash back, points, or air miles. If you have cashback or points available, save them for holiday shopping.
• Don’t be worried about what people might think of using rewards points for gifts: A study from 2023 shows that more than half of Americans (51%) wouldn’t mind if they found out someone used rewards points to buy them a gift.³

5. Learn to identify and avoid holiday spending traps

It’s easy to overspend when you’re in a store. The marketing, combined with time pressure, can encourage you to spend more recklessly than you otherwise would. Here are some tips for planning your shopping and sticking to your budget once you’re in a store:

• Watch out for impulse buys: Stores are often laid out to encourage impulse buys. If you know what you’re looking for before you go in, it’s easier to avoid these impulsive decisions.
• Recognize marketing urgency: Marketing language and pricing can make deals feel more urgent and impressive. Remember that sales happen often; the earlier you start, the more time you have. If you feel pressured, take a step back.
• Understand normal pricing: Not every deal is really as good as it seems. Learning the average price of your items can help you understand just how good the deals are.
• Plan for returns and exchanges: If you’re buying gifts, then try to plan for potential returns. Choose what you use financing for wisely, because it can make returns and refunds more difficult.
• Protect and rebuild your savings: Make a plan for rebuilding your savings after the holidays and keep yourself accountable to your budget. Having post-holiday goals can help you keep focused on your budget during the high pressure of holiday shopping.

Spread the in-store cost with PayPal

Combining responsible budgeting with financing options can help you manage your finances over the holidays. With services like buy now, pay later, you can make purchases when the deals are best and spread out the cost. Then, after a few weeks, you’ll be able to get back to your normal personal budget.

With PayPal, you can pay monthly in-store for your purchases over the holidays.²