Budget-Friendly Strategies for Charitable Contributions

Shopping season is in full swing, and the average American spends around $1,000 for the winter holidays, with the lion’s share going toward gift purchase. Capital One also reports that American holiday shoppers will spend an estimated $984.3 billion in 2024 (a 3% increase from last year.) 

Amid traveling, holiday feasting, and shopping, it’s important to remind yourself that the holidays aren’t just about spending. This is also a time to give to those in need, and there are several ways you can do that even if your bank account is feeling the impact of inflation and high interest.   

Set a Budget for Holiday Shopping 

Just like any other expense you’re accounting for, it’s wise to allocate a specific amount of money that you are comfortable with. Analyzing consumer spending trends can help set a realistic budget, whether it’s a one-time sum you plan for or smaller recurring donations beginning this month. Either way, if funds are extra tight this year, don’t feel discouraged! We’ve offered ideas for other ways you can give back this season. 

Most consumers tend to favor traditional retailers for their holiday purchases, but a notable segment, especially younger shoppers, is also turning to thrift stores and resale shops to save money and support sustainability. Understanding these shopping behaviors and preferences can help you make smart decisions about where to allocate your budget. 

Determine Your Spending Limit 

To avoid overspending during the holiday season, it’s essential to determine your spending limit beforehand. Start by considering your income, expenses, and savings goals to set a realistic budget for holiday spending. Don’t forget to factor in any charitable contributions you plan to make, as these can add up quickly. 

One helpful guideline is the 50/30/20 rule: allocate 50% of your income towards necessities, 30% towards discretionary spending, and 20% towards saving and debt repayment. Adjust this ratio as needed to accommodate your holiday spending plans. By setting a clear spending limit, you can enjoy the holiday season without the stress of financial strain. 

Track Your Spending 

Once you’ve determined your spending limit, track your expenses to ensure you stay within budget. Consider using a budgeting app or spreadsheet to monitor your spending throughout the holiday season. Make sure to include all expenses, including gifts, decorations, travel, and charitable contributions.  

By tracking your spending, you can adjust as needed to stay on track and avoid overspending. Remember, it’s the thought that counts, not the price tag, so focus on finding meaningful gifts that fit within your budget. 

Make it Count with Charitable Contributions 

Before making any contributions, research charitable organizations to ensure your money is being used effectively. Look for organizations with a transparent track record, low administrative costs, and a proven commitment to supporting their mission. Websites like Charity Navigator can help you evaluate nonprofits and provide Highly Rated lists if you need a place to start. Charitable donations are tax-deductible so be sure to save your receipts after you donate. 

Volunteer Your Time  

During November and December many of us rely on the hospitality and hosting of friends or families, but that’s not a given for everyone. Time spent with someone—whether that’s offering hot meals at a shelter or volunteering to help with a holiday event—is an impactful gesture. Check out VolunteerMatch to find ways you can get involved within your local community.   

Donate Refurbished Gifts 

Another meaningful and budget-friendly way to give back this season is to donate new or gently used goods to local charities or shelters. Many organizations appreciate donations of clothing, blankets, canned foods, hygiene essentials, books, and toys. Reach out to the organization directly to find out what’s most needed (sometimes these lists will be posted to their website as well.)  

According to Phil Rist, Executive Vice President of Strategy at Prosper Insights & Analytics, younger consumers are increasingly drawn to secondhand and refurbished gifts due to their desire to save money and adopt more sustainable shopping habits. 

Start a Giving Circle  

Pooling resources with friends, family, or colleagues to create a giving circle is a great way to amplify charitable donation. Each member contributes a small amount of money, and collectively, you can choose a charity or cause to support. Check out Grapevine if you’d like to join an existing circle—there are more than 800 you can choose from.   

Utilize Workplace Giving Programs for Charitable Contributions 

If your employer offers workplace giving programs, take advantage! These programs often allow you to donate a small portion of your paycheck to a charitable cause of your choice. Additionally, some employers may even match your contributions, effectively doubling your impact without any extra expense on your part.  

Give the Gift of Charity This Holiday Season 

If you aren’t sure what to give someone this year—here’s an idea: give the gift of charity. You can donate in their name to a cause they deeply care about. The benefits here are twofold: making a meaningful impact on behalf of someone you care for and alleviating the financial burden of expensive gift purchases. 

Give Year-Round

Charitable giving doesn’t have to be limited to the holiday season, and even small donations like $10-$20 per month count. Consider incorporating giving into your regular monthly budget. By making smaller, recurring donations throughout the year, you can support your chosen causes consistently while still honoring your financial limitations.  

Need help creating a holiday budget or making room in yours for charitable giving? Connect with one of our friendly counselors—financial counseling at GreenPath is cost-free, judgment-free, and designed to help you achieve your goals this season and beyond.