5 Ways Retirees Can Manage Their Holiday Budgets

If you’re one of the estimated 45.1 million retirees in the US, this holiday season will likely look a lot different than what you’re used to. You may have canceled your annual family trip for health reasons or called off your holiday gatherings altogether.

The changes caused by the pandemic can also affect your finances. If you live on a fixed income, you might consider creating a financial plan that matches this year’s holiday endeavors. With these tips from US News My Money, you can easily manage your spending and prevent potential financial mistakes.

Review Your Budget

Even if you had a holiday budget prepared, you might want to give it another look. You might need to adjust or eliminate some aspects to reflect the changes in your holiday plans. 

“If you don’t have a budget, now is a great time to create one,” says Lauren Wybar, a senior financial advisor at Philadelphia-based Vanguard Group, told US News My Money. “A good starting point is to develop an itemized list of all of your expenses.” 

You could establish categories for this season, like charitable donations, holiday decor, gifts, or special activities. Determine if these expenses are necessary or discretionary, and if you are comfortable with them given your savings and retirement income,” Wybar advises.

Set A Price Tag Limit On Gifts

You might plan on gifting more this year, or maybe you have to cut back. For example, if you know you won’t visit some relatives this holiday, you might opt to send an additional present.

On the other hand, if you can’t afford that, you might limit your gift list more than in previous years. “Setting spending limits on each gift is a great way to maintain your budget,” Chuck Czajka, Florida-based Macro Money Concepts founder, suggests. 

Of course, if you ship these gifts, make sure you include shipping costs in your budget.

Reassess Holiday Meals

If you typically host your family’s holiday meal, you may choose to call off your dinner plans. 

“If you are cooking for one, two or four – versus your usual 10 – think very carefully about what you really will eat,” cautions Tanya Peterson, Freedom Financial Network’s vice president of brands. “There is no need to buy and cook the dinner you may be used to, unless you are intent on having leftovers to freeze.”  

If you decide to cook the traditional turkey or ham, you can roast it before any meals and split it into smaller portions to freeze for later. “Then take out what you need for several meals during the holiday season,” Peterson recommends.

Rethink Your Travel Expenses

If you decided to cancel your annual December trip but already purchased tickets months ago, contact the airline and ask about a refund. You may not get your money back in full, but you might get credit for future flights.

Or, if you planned a lengthy cross-state road trip, think about the budget you originally made for the excursion. This likely included funds for gas, food, and lodging. This year, you may want to save your money and use them for a later vacation.

Alternatively, you could put your travel fund to another use. Jeremy Grove, a financial planner at Stonebridge Insurance and Wealth Management, notes, “Retirees who aren’t traveling for the holidays may find themselves with some extra cash in their budgets that they can dedicate to a non-traditional gift, like a college savings account for their grandchildren.” 

Find Ways To Save

Do you typically host your family’s New Years’ Eve gettogether? You might have a change of plans because of the pandemic. Canceling your gathering might leave you with surplus cash since you won’t have to use it for food or decorations.

“Cancelled holiday plans mean an opportunity to save money that is typically spent this time of year,” Nicole Scanlon, Olson Wealth Group’s managing director of family wealth, says. You could choose to save this money for a rainy day fund, a home improvement project, or a future trip next year.

As you spend more time at home this year, you might find that there are many ways to have fun with your household for free. You could finish that puzzle you’ve always wanted to try, reminiscence with old photos, or refreshing yourself on some board game rules. 

Says Scanlon, “Those looking to get outdoors can do so in a way that costs nothing by going on walks, cross country skiing or sitting around a bonfire.”


  • Hartman, Rachel. “How to Manage Holiday Spending in Retirement.” U.S. News & World Report, U.S. News & World Report, 25 Nov. 2020, money.usnews.com/money/retirement/aging/articles/how-to-manage-holiday-spending-in-retirement.
Ian Schindler