The holidays are usually called the most wonderful time of the year, but they are also typically the most expensive time of the year. In a recent survey from Bankrate‡, 54% of respondents said they’d made an unplanned or impulse purchase during the last holiday season.

Beyond purchasing gifts, many different expenses that you may not think to budget for can impact your finances. We’ve done a deep dive into holiday spending and uncovered a few “hidden” expenses to watch for, with tips on how you can budget for them.

Holiday festivity costs: Clothing, entertainment, cooking, gifting

The average American spends thousands of dollars on the holidays according to Newsweek‡, and little expenses can add up quickly. We all know how rapidly our calendar can fill up during the holiday season. All those parties, potlucks and events can quickly add up in expenses, too.

Here are some hidden holiday costs to be aware of:

  • Holiday outfits: While not technically a necessary expense, many people plan to take family photos during the holidays to commemorate time spent together. While you may have a holiday outfit you could re-wear, small children, pets and growing teens will likely need new clothes for the occasion.
  • Cooking and baking: Traditional holiday celebrations are largely centered around food, from beloved family recipes to cookie baking, and everything in between. Homemade food may usually be less expensive than eating out, but with recent grocery prices, even staples like meat and vegetables have seen price spikes‡.
  • Holiday meals: In addition to family gatherings, many friend groups like to go out to celebrate the holidays at restaurants, which means more eating out costs hitting your budget.
  • Teacher gifts and classroom parties: All parents are aware of the mental load of buying gifts for family and friends, but don’t forget your children’s teachers and friends, not to mention classroom parties, which could include decorations, snacks, favors, and even time off from work.
  • Hidden party and entertainment costs: If you have holiday events on your calendar, whether it’s festivals, ballets, sporting events or dining, you’ll need to budget for the cost of tickets, transportation and parking. While this may seem like splitting hairs, a weekend downtown with parking or valet can add up over the holiday months.
  • Work gifts: Your place of work might also have a holiday party with a gift pool that you’ll want to contribute to, or perhaps a fundraiser your team is raising money for. Some offices opt for secret Santa or white elephant gift exchanges with varying dollar limits. Add these ancillary gift requests into your budget as a “miscellaneous” gift category you can monitor.

Whichever extra expenses apply to you, create some maximum spend estimates for your budget and track your purchases in specific categories so you don’t exceed your limits.

The weather outside is frightful: Higher costs for utilities, car maintenance and sick days

For those in the northern U.S., cold weather can bring several expenses to the limelight that you’ll want to prepare for – some of which may be surprising.

  • Increased utility costs: Colder weather means your HVAC is working hard, which means higher utility bills. Higher gas bills are something many people anticipate, but also watch your electricity use with space heaters and accessories like heating blankets. CNN recently reported that home heating costs are expected to rise‡ 7.6% this winter, with Midwesterners potentially seeing gas bill spikes of up to 16.4%.
  • Damage to vehicles: Do you have to park outside during a snowstorm, or drive long distances no matter the weather? The weight of piled on snow could add damage to your vehicle, and frequently chipping off the ice can add scratches and dents to your car. Preparing for the worst also means having some cash set aside in the event of an accident.
  • Time off work for snow days and increased sickness: This speaks for itself as we all move through the tough winter months but be mindful the weather or a bad cold could take you out for a few days. The end of the year is typically when many people are running out of their paid vacation and sick day allotment.

The gift of giving…last minute

This time of year can be very expensive as we purchase gifts for all the people on our list. In addition, this is the time of the year when we think about charitable donations. If you are inclined to give a gift, there are costs associated with it – especially if your thoughts come at the last minute.

  1. Shipping costs / expedited shipping: There could be shipping and mailing costs associated with different gifts. For example, if you mail holiday cards, this could be the only time of the year that you buy stamps. And, if you need your gift to arrive before a specific date, be prepared to pay a premium for the service.
  2. Donations/donation requests: While we typically recommend having an annual charitable giving budget, we know that the holiday spirit increases donations – especially when many charities implement targeted campaigns for donations at the end of the year. If you feel compelled to donate spontaneously at checkout counters, with bell ringers or at local events with nonprofit components, make sure you track those to avoid giving past your means.
  3. Unorganized shopping/buying: Not having a gift shopping plan can be a big budget breaker. Aimlessly shopping can be rough – fiscally, physically and mentally. If you know exactly what you want to buy for the people on your list or exactly how much you want to spend, it can save you from overspending, which can happen when we are caught up in the pressure and rush of the holidays.
  4. Last-minute needs: There are a lot of last-minute gift needs that can come up during this season that can upend your budget. The important thing to know is how much you want to spend on any of the impacted categories and stick with it as you move through the season. Be creative with your holiday giving and entertainment choices so you can keep your finances in order without missing out on the festivities.

Home for the holidays

For many people, this is a high travel time. Last year, AAA estimated‡ that 119.3 million traveled further than 50 miles for a holiday event. If travel is in your plans for the holiday season, it is important to be aware of additional costs associated with it.

  1. Baggage fees: Many airlines charge for bags now. If you can fit everything you need in a carry-on bag, you can save on baggage fee, but that can be especially tough if you’re traveling with several gifts. Consider shipping items directly to your destination to lighten your load.
  2. Rideshares/taxis/rental cars: If you are flying to a different city, there is a good chance you won’t have your car. This means that you’ll have an additional cost for taxis or rental cars, and it is important to note that rideshare services like Uber or Lyft are likely going to have surge pricing during the holiday season.
  3. Travel costs: One category we frequently see people miss in their budgets is travel incidentals. With any travel, you will have costs such as food or gas needed along the way. However, flyers should also build in extra budget for surprises, like long flight delays, cancellations or booked up hotels. Even small airport purchases like a set of new headphones can set you back significantly.

It is easier said than done to stick to a budget especially during these high-spend months when you want to say “yes” to so many different things. However, if you have a larger savings goal in mind like a vacation or a large purchase, planning for these hidden costs can help you support and protect your savings and stick to your budget.

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