How to Save Smarter for the Holiday Season

The holidays come at the same time every year, but the total cost can still be hard to predict. Gifts often get the most attention, yet travel, food, hosting, decorations, donations, and tips can all add up. The National Retail Federation (NRF) reported that consumers planned to spend an average of $890.49 per person in 2025 on gifts, food, decorations, and other seasonal items, with $627.93 going to gifts and $262.56 to seasonal items such as food, candy, decorations, and greeting cards.¹ Actual spending varies by household, so a plan based on your own expected costs may be more useful.

Key highlights:

• Holiday costs can include gifts, travel, food, hosting, decorations, giving, and tips, so listing each category may give you a more complete estimate.
• Your spending target, divided by the months or paychecks before the holidays, shows how much to set aside each period.
• Your savings timeline should leave room to access the money before you need to make purchases.
• Logging purchases against your target may help you catch overspending sooner.
  
  

Step 1: Estimate your holiday costs

To estimate holiday costs, review your bank and credit card statements from last holiday season to see what you spent in each category, and note anything that has changed since, such as a new job, a move, or a new family member.² Then list what you expect to spend this year and mark each item as a must-have or a nice-to-have, so you know where to trim if needed.

These amounts are illustrative only. Adjust the categories and estimates based on your own holiday plans, priorities, and budget. Consider including a buffer for price changes or other unexpected costs.²

Step 2: Set a spending target

Your estimate shows what the season may cost. Your spending target is what you can afford to spend.

1. Cover your regular expenses first. Account for rent or mortgage, utilities, groceries, and other essentials.
2. Estimate what you can set aside. Look at the income you expect before the holidays and decide how much can go toward holiday costs.
3. Compare your estimate with your target. If the estimate is higher than your target, trim lower-priority categories or give yourself more time to save.

In the example above, a $1,200 target would mean trimming $50 from the $1,250 estimate. Depending on your plans, possible ways to lower costs include:

• Drawing names for a gift exchange to reduce the number of gifts purchased.²
• Shopping secondhand through thrift stores, consignment shops, or online resale groups.²
• Considering a homemade gift when it is appropriate for the recipient.³

A simple personal rule, such as "if something isn't on your list, don't buy it," may also help you stay within your target.³

Step 3: Save in advance

Divide your spending target by the number of months or paychecks before you need the money. If you've already saved part of your target, subtract that amount before dividing.

Monthly savings = Spending target ÷ Months until the holidays

Here is how a $1,200 target breaks down based on when you start:

The examples assume that the full $1,200 target is funded through contributions and do not include interest. Use the date when you expect to begin making purchases, rather than the holiday itself, to calculate your timeline. For example, starting 12 months ahead would require an illustrative $100 per month, while starting three months ahead would require $400 per month. If the calculated amount does not fit your budget, consider adjusting the target, extending the timeline, or reducing lower-priority expenses.

Two habits may make saving easier:

• Automate your transfers, if available. Check whether your bank lets you schedule transfers. A transfer on each payday may help make saving a routine.
• Set up a sinking fund. A sinking fund is a way to save for a planned expense in smaller amounts over time. Because the holidays come at the same time each year, they are a good fit.²
  
  

Once you’ve decided how much to set aside, consider where you will keep the money until you need it.

What type of account should you use to save for the holidays?

Keeping holiday savings in a separate account may help you track progress toward your target. A high-yield savings account (HYSA) is one option. Interest rates on variable-rate accounts can change at any time. Before choosing an account, review the current APY, minimum opening deposit, fees, eligibility, transfer timing, funds availability, and other account terms.

FDIC insurance: Eligible deposits at an FDIC-insured bank are insured up to the standard maximum deposit insurance amount of $250,000 per depositor, per insured bank, for each account ownership category. Coverage depends on account ownership and other applicable FDIC rules.⁴

Step 4: Track your purchases

Think of your spending target as a live plan rather than a number you set once and forget. Keep a running record of holiday purchases and compare each category with its target as the season progresses.

A spreadsheet, notes app, budgeting app, or written list can work. The important part is being able to see:

• The target for each category
• The amount spent so far
• The amount remaining
• Purchases or expenses that have not yet occurred

A category can appear under budget simply because the expense has not happened yet. Before treating an unspent amount as available, check whether travel, gifts, events, or other planned costs are still ahead.

Record purchases as they happen and review the totals regularly. For example, if your gift target is $450 and you have spent $180, you have $270 remaining for that category. If your $300 travel target is still unspent but a trip is planned, that money may not be available to cover an overage elsewhere.

If a category exceeds its target, review the expenses still to come before moving money from another category. You may decide to reduce a lower-priority purchase, shift money from a completed category, or revise the overall spending target if that change fits your budget.

Can you use an Openbank High Yield Savings account for planned holiday expenses?

An Openbank High Yield Savings account may be an option to consider when comparing savings accounts for planned holiday expenses. Review the current APY, fees, minimum opening deposit, eligibility requirements, access options, and applicable disclosures to determine whether the account aligns with your needs and savings timeline. Learn more about the Openbank High Yield Savings account or apply for an account online.

Sources:

¹ NRF - Consumers to Spend Second-Highest Amount on Record, According to NRF Holiday Survey. Accessed November 13, 2026.
² NerdWallet - How to Build a Holiday Budget That Works Every Year. Accessed November 13, 2026.
³ Consumer Financial Protection Bureau - A five-step spending plan to avoid holiday debt. Accessed November 13, 2026.
⁴ FDIC - Deposit Insurance at a Glance. Accessed November 13, 2026.

 

This content is for informational purposes only and does not constitute financial, legal, or investment advice. Please consult Openbank’s website or speak to a representative for the most up-to-date information.

Openbank is a division of Santander Bank, N.A. Member FDIC. Deposits at Santander Bank and its Openbank division are combined for FDIC insurance purposes and are not separately insured.