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8 Hidden Holiday Costs and How to Avoid Them

Don't let Santa go broke this Christmas! Cut back on wrapping paper, electricity usage, and still feel jolly this season.
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When it comes to holiday spending, we're all about making the most of our budget — and that means more than just getting great deals on wish list items. It's all too easy to go overboard with the holiday spirit, financially speaking, and while you might be acutely aware of how much you're spending per person, you might be unthinkingly dropping cash left and right on hidden holiday costs like wrapping paper and party gifts.

No one wants to play Scrooge, but giving yourself the gift of debt is like getting coal in your own stocking. To avoid the burden of overspending this holiday, we recommend taking a look at these eight expenditures that offer wiggle room for extra savings.

Skip the Wrapping Paper

The EPA estimates that Americans throw away 25% more trash than usual during the holiday season, and much of that is wrapping paper. Spending money on high-end wrapping paper not only means you're tossing money into the trash, but you're also growing your local landfill. It's hard to find reliable estimates on how much Americans spend per household on wrapping paper, but with gift wrapping options typically priced between $3 and $13 per roll, it's easy to see how the costs add up. Add gift bags and tissue paper to the mix, and you might be looking at $100 or more just to wrap presents for a family of four.

To preserve the fun of unwrapping gifts from Santa, Julia "Bargain Babe" Scott suggests a dozen alternatives to wrapping paper on her blog, MintLife. These ideas run the gamut from using old cookbooks and children's books, to simple brown paper bags with one phrase written over and over. "Tis the Season to Be Green" sounds about right.

Don't Get Carried Away with Gift Cards

As close as your local pharmacy, gift cards have become a very popular way to spread joy in December. Acording to the National Retail Federation, 81% of shoppers purchased at least one gift card last year holiday season and spent a total of about $157 on gift cards — the highest amount in the 10-year history of the NRF's holiday consumer spending survey. From co-workers to kids' teachers and coaches, to the paperboy and sanitation workers, gift cards are easy and convenient ways of giving a little something to everyone.

Before getting carried away with the gift cards, though, do what master concierge Michael Fazio recommends with all forms of holiday gifting and tipping: Start with a defined budget and work backwards from there. If you know you have $100 to buy $10 gift cards, then list the 10 people you want to give to, and call it a day. If you play your gift cards right, you might even be able to stretch your budget to include free gift cards that come bundled with other purchases. If the Ghost of Christmas Guilt rears its ugly head, fire up the oven and bake some cookies for the folks you left off the list.

Greeting Cards & Postage Can Add Up

Saving money in this category is tough because nothing beats the personalized touch of a hand-written holiday card. That said, you may live in a city such as Chicago, which has remarkably poor mail delivery. And how much are you paying for those fancy greeting cards anyway? If it's $3 to $5 a pop, plus stamps, think of how the cost of sending holiday cards can add up when the list grows into the hundreds.

If it's tradition to send out cards, you'd be well advised to find a Vistaprint coupon or discounts from sites like Cardstore. But remember, it's also possible to segregate your list and send some salutations electronically though services such as eGreetings. If you want to send a bunch of cards by mail, put the kids to work and make some custom cards. A handmade card costs less, but means a whole lot more. Or in the age of email and texting, consider an honest-to-goodness phone call. No greeting card can convey warm holiday wishes like the sound of your voice.

Transportation for Shopping Can Guzzle Gas

It's no surprise that lots of folks in lots of cars are driving to and from strip malls and shopping centers to finish up their holiday shopping. But what may shock you is how all that driving will empty your wallet, especially if you're not planning ahead. With the average cost of a gallon of regular gas hovering at $3.26, it costs about $50 to fill a 15-gallon tank.

The good news is that you've got plenty of cost-saving alternatives. The biggest gasoline saver? Shop online! You'll enjoy the casual, uncrowded atmosphere and still score great deals. Just be aware of shipping deadlines and steer clear of online stores with notoriously slow shipping times. However, if you've passed the point of no return, make it a point to arrange all of your holiday shopping in one driving expedition, neatly planned so that your stops follow a connect-the-dots route.

Keep Tabs on Gifts for Party Hosts

It's not unusual to receive a multitude of party invitations between Thanksgiving and New Year's, especially if you live in a major metropolitan area. Bringing wine for the hosts is a fine idea, but you could end up shelling out quite a bit of coin if you're bringing $15 or $20 bottles to each and every shindig. To cut back on costs, why not invest in your spirits upfront? By enrolling for free in the Zagat Wine Club you can take advantage of this Zagat Wine Club 15-Bottle Introductory Case offer that includes a selection of whites and reds. For just $69.99 (with $19.99 s&h), that's $6 per bottle, $140 off, and the best price we've ever seen on this quantity of wine. But for other, non-alcoholic host and hostess gift ideas, here's a list of 15 hostess gifts under $5, including candle holders, card games, and photo albums.

Throw Your Own Party on the Cheap

Now the stocking is on the other foot, and you're the holiday host with the most. But that doesn't mean you have to spend too much. Catered affairs for a group of 20, even from a local supermarket, can get expensive: Even $10 a head adds up to $200, which likely doesn't include alcohol. So ask friends and family to contribute by bringing an entree, side dish, or beverage. Assuming you can do some artful delegation and diplomacy, that should leave very few holes to fill on the menu, and a much smaller bill to reckon with come party time.

Limit Your Electricity Usage for Holiday Lights

In some neighborhoods, Christmas and holiday light displays can get downright competitive. But as far as we can tell, no one is competing to have the highest electric bill. If you're curious as to how much you might be spending to run that 25-foot inflatable Santa, check out this holiday lights electricity cost calculator.

Cost estimates for holiday lighting will vary, but some overly-enthusiastic consumers will spend more than $50,000 total powering their displays. A more modest setup, however, might cost you an extra $30 to $50 in electricity, as well as the cost of a new prop or two. One way to save money over the long run is to invest in solar-powered Christmas lights ($19.98 with $4.98 s&h, a low by $1). While they cost more per strand than conventional lights, they won't cost you a dime on your utility bill, and are definitely more environmentally friendly.

Opt for DIY Holiday Decorations

We all want a cheery domicile come the end of December. Skimping on the decorations is definitely not called for, but neither is making a wreath out of $20 bills. Some of the best ideas for non-$20-bill homemade wreaths come from TLC Parentables, and include a shutter display that utilizes greeting cards from friends to add some holiday flair to your abode.

While the upcoming holidays are a time for cheer, they can also be money pits. We encourage everyone to have fun, and shop up a storm — or a snowstorm, if you prefer. But make sure you show ample awareness for your bottom line as well. By reviewing your holiday costs and entertaining some painless ways to cut back, you can experience yet another gift that keeps on giving: a stack of paid-off credit cards and lower post-holiday bills.


Contributing Writer

Lou Carlozo is a DealNews contributing writer. He covers personal finance for Reuters Wealth. Prior to that he was the Managing Editor of WalletPop.com, and a veteran columnist at the Chicago Tribune.
Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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