You might know how much money is coming in and going out of your monthly budget. However, there are seasonal anomalies during which cash flow is entirely different, like the winter holidays.
A 2024 Conference Board survey revealed that the average U.S. consumer expects to spend $1,063 on holiday-related purchases this year. Some of these expenses will be planned, like gifts and decorations, but others can catch you by surprise.
Here are eight typical holiday-related costs that aren’t included in many peoples’ budgets — and tips on how to keep them to a minimum.
1. Larger Than Expected Gas Bill
Deloitte’s 2024 holiday travel survey found that half of Americans plan to travel between Thanksgiving and mid-January. If you’re considering a cross-country drive, look into last- minute deals on flights instead.
“In some cases it can be cheaper to fly,” says Joseph Camberato, CEO at National Business Capital, a business lending platform. “Depending on where you’re going, the cost of a round trip flight may be what you pay in gas each way.”
And if you need to stay in a hotel because the drive is long, you save on accommodations as well.
If you’re hitting the road to shop and run errands, don’t just expect increased traffic. You might also pay more for fuel.
[RelatedWhat’s the Cheapest Way to Travel for the Holidays in 2024?]
“One hidden cost people don’t think about is the gas you burn driving around from store to store,” Camberato says.
“If you’re traveling far to get a deal or hunt down a specific item, it adds up, especially if your car isn’t great on gas. It’s something to keep in mind as you plan your shopping trips,” he adds.
Before jumping in the car for each individual task, combine as many as possible into one.
2. Expedited Shipping Costs
A common but avoidable cost is the amount you’ll pay to have some things shipped just in time for Christmas.
“If you’re in a rush and opt for overnight delivery, those fees can quickly add up,” Camberato says. “Shopping ahead of time can help you avoid those extra charges and save you some stress while you’re at it.”
Make your purchases as quickly as you can so that you don’t have to pay expedited shipping costs. For example, Amazon charges up to $9.99 per order for same-day shipping if you’re not a Prime customer.
And if you’re sending the items yourself, review the costs from a variety of delivery options. According to the United States Postal Service, USPS Ground Advantage and USPS Priority Mail are priced lower than competitors, so you can save this holiday season by going to the post office.
For local deliveries, check out the prices for having the items delivered by a company like Instacart. The fee depends on the retailer, delivery window and the order total, but if you’re an Instacart+ member you may qualify for free delivery on orders of $35 or more.
[Read: The Cheapest Ways to Ship Packages]
3. Surcharges at Checkout
One particularly sneaky charge you may find this year shows up at checkout. Phillip Parker, founder of the credit card payment advocacy group CardPaymentOptions.com, says to be on high alert for surcharges.
“They happen at the point of sale when consumers are paying,” Parker says.
“It is becoming far more frequent for retailers and restaurants to add fees into the final bill without verbally disclosing them or placing clear signage to announce them. These fees are often used to offset the cost of accepting card payments,” he adds.
The fee may be a few dollars per transaction, which doesn’t sound like much, but it stacks up when you’re holiday shopping from many merchants who are adopting the practice.
Review the receipt or check for key words and phrases.
“It could be written as a convenience fee, a kitchen fee, a fair wage guarantee or an employee gratuity fee,” Parker says, explaining that the money usually just goes to the processor.
“Complain to management. Most will comply as a refund or a credit. Or call your bank to report the fee. They can reverse it and the business may be fined,” he says.
4. Dealing With E-Commerce Scams
The last thing you want is to get scammed, but fraudsters are out in full force around the holidays.
In December 2024, the Internal Revenue Service and its Security Summit partners issued a warning to “Approach holiday shopping with extra caution this year. Identity thieves and scam artists are poised to exploit unsuspecting shoppers.”
Phishing emails are becoming more sophisticated and harder to detect, so if you’re distracted you can be duped into giving up your financial information, address, Social Security number, bank account numbers, credit card numbers or passwords. With that information, they can open new accounts.
IdentityTheft.org reports the median loss to fraud victims is about $500.
Your first defense is to slow down and consider where a request for information or money is coming from. Never respond to an email asking for additional personal or financial information. If you need to supply it, go straight to the company’s website.
When given the option, use a digital wallet to pay because the transactions will be tokenized and encrypted, offsetting the need to input your actual account numbers.
5. Paying for Expensive Wrapping
Wrapping gifts is a big and expanding business. According to Strategi Scope Research data, the gift wrapping products market share is projected to reach approximately $28 billion by 2032, representing a compound annual growth rate of 4.5%.
In part, this is due to consumers wanting more sustainable options, such as biodegradable and recyclable materials, which are pricier to produce. The nicer and more eco-friendly it is, the more you’ll probably pay.
[Related:Eco-Friendly Holiday Spending: How to Be Green and Frugal]
There’s no need to run out and overdo the fine art of wrapping, insists Trae Bodge, smart shopping expert at TrueTrae.com. You can spend less and still fulfill sustainable desires and create beautiful packages.
“There are so many things you can repurpose,” Bodge says.
“Use newspapers in a recalling bin, put things in lunch bags. Even printer paper for small gifts can be great. If you have gift wrap that’s not holiday themed, turn it inside out. Or, buy a big roll of craft paper. Leave it plain, or invite your kids to decorate it,” she adds.
Remember, the less you spend on the outside of a package, the more you can spend on what’s inside.
6. Buying New Clothes for Yourself
You wouldn’t be the first person to do a little extra shopping for yourself during the holidays, especially if you want something special to wear.
“A lot of festivities are coming up,” Bodge says.
“You suddenly need attire that you don’t own. You were invited to a party and it’s dressier than usual. Maybe you don’t fit into any of the clothes you have, or you’re attending a gathering with friends and it’s an ugly Christmas sweater event. I just got an invite to join a party that’s a holiday pajama theme,” she adds.
Whatever the case, you may be dashing to the nearest department store or jumping online and spending more than you intended.
As an alternative, consider renting from a company like Nuuly or Rent the Runway. “This is a really good option if you want to wear something fancy and expensive,” Bodge says.
No- and low-cost options include borrowing from friends, checking out what’s available from your local Facebook “free stuff” group and scouring consignment stores and thrift shops like Goodwill.
7. Handing Out Extra Gratuities
‘Tis the season to give back to all the people who serve you now andthroughout the year, says consumer and money saving expert Andrea Woroch.
“You may be dining out more, grabbing drinks, going out for seasonal coffees so you will be tipping more than usual,” Woroch says.
“But that’s just the start. There are also service professionals you go to a lot who you want to give more to this time of year. They include the people who do your nails and hair, the cleaning crew and yard workers who come to your home,” she says.
Try not to feel obligated to give more than you can afford and look for meaningful yet affordable ways to tip.
Gift cards instead of cash can be ideal. “You can buy them on sale through a warehouse store like Costco for up to 30% off or buy discount gift cards through gift card resellers like CardCash for up to 25% off the value,” Woroch says.
8. Paying for Financing
According to a survey by the fintech company Achieve, nearly one in five people believe it’s likely they’ll go into holiday debt this year, costing them substantial fees that weren’t included in their original holiday budget.
For example, if you charge the national average holiday expenses of $1,063 to a credit card with a 25% APR, you would pay $355.67 in interest.
Margaret Poe, TransUnion’s head of consumer credit education, urges consumers to take a beat before borrowing for any item.
“Think through every purchase to decide if it is necessary, whether online or in a store,” Poe says. “The expense happens right away but the ramifications can go on for a long while.”
If you do charge the expenses, plan to pay the whole bill before interest is added.
Poe also says to be wary of buy now pay later (BNPL) arrangements. These short-term financing deals allow you to buy what you want right with a partial deposit, then pay for the rest in installments, but if you miss a payment there will usually be fees.
“BNPLs are tempting during the holidays, but confirm the fee structure first,” Poe says.
“This is a rapidly evolving space and some are actually longer term installment loans that blur the line. You may be signing up for a three-year loan with interest charges you didn’t expect,” she adds.
The More You’re Aware of Hidden Holiday Costs, the Better You Can Avoid Them
Even with the best intentions, you might find yourself spending more than you planned this holiday season. An impulse buy or two is normal, and if your budget has some flexibility, you can handle it.
However, you’ll want to minimize or eliminate those unpleasant, unexpected costs that can catch you off guard, so you can focus on those you’re happy to embrace.
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The Hidden Costs of Holidays originally appeared on usnews.com
