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Beware of Hidden Holiday Costs

string of Christmas lights

According to the National Retail Federation, average spending per shopper this holiday season is expected to reach $796 (a slight decline from $805 in 2015,) but not all purchases end up wrapped under the tree. Even consumers who regularly track their expenses and calculate credit card payments may be scratching their heads in January, wondering where all their money went. Beware these hidden holiday costs.


Twinkling icicle lights can create the feeling of a magical winter wonderland — until you get the utility bill. Add all the extra dishwasher runs from your holiday entertaining and the laundry from the guest room sheets, and you could be paying for a big jump in energy usage over the course of the season.

SAM smart tip: To avoid spikes in energy-related holiday costs, make sure the dishwasher is full before running and consolidate laundry into larger loads. Switch to LED outdoor lights, which use 1/50th the electricity of conventional lights and last up to 30 years.

Gift Wrapping

Even if you stockpile wrapping supplies from discount stores and post-holiday sales, the cost of paper, gift bags, nametags and tape can add up. Buying new gift wrap every year also creates a lot of trash. According to the U.S. Environmental Protection Agency, household waste increases 25 percent — around 1 million tons — between Thanksgiving and New Year’s Day.

SAM smart tip: Wrap presents in repurposed papers such as newspaper, old maps or magazine pages. Save ribbons, bows and other gift-wrapping accessories to reuse next year.


Decking the halls can add a lot to your holiday costs, particularly if you buy new decorations each season or purchase disposable items such as a Christmas tree, fresh garlands or wreaths. Holiday-themed dishes, linens and baubles also can ratchet up spending.

SAM smart tip: Participate in ornament exchanges with friends and co-workers and limit other purchases to a few things that you truly will treasure. Replace a cut tree with a potted one that can be planted later and choose reusable wreaths made of long-lasting materials such as fabric or woven branches.


Finding the perfect present is only the beginning of holiday spending. Packing materials and shipping often cost more than the gift itself. Many retailers participate in Free Shipping Day. If you are sending gifts through regular mail, the U.S. Postal Service provides an online shipping costs estimator to prevent sticker shock at the post office counter.

SAM smart tip: Nine out of 10 online retailers plan to offer free shipping at some point this holiday season, so shopping on the Internet can save money. If you do your own packing, buy boxes and supplies from a discount retailer to avoid paying premium prices at the shipping store.


If you plan to fly over the holidays, be sure to factor in additional costs such as baggage fees and airport shuttle or parking charges, as well as tips to cab drivers and those who help with your luggage. Even if you stay close to home, consider the extra miles you will log driving from store to store and attending social engagements.

SAM smart tip: Take public transportation to the airport and consider shipping your gifts rather than paying for an additional checked bag. Carpool with friends to social gatherings and plan shopping trips to minimize excess driving.

Holiday Thanking

The holidays are a great time to show appreciation to your regular service providers such as mail carriers, trash collectors and hairdressers, but these small tokens quickly can add up to a big chunk of change.

SAM smart tip: If you choose to give gift cards, don’t overspend. Determine the total amount you can afford and divide it among the recipients. Even small denominations can say a big “thank you.” Baked goods are another inexpensive (and often appreciated) token of gratitude.


When you’re out shopping for others, it can be tempting to pick a little something up for yourself, too. While seasonal discounts and sales may appear to be saving you money, those purchases can come back to haunt you once the credit card bill arrives.

SAM smart tip: Make a thorough holiday shopping list including incidentals such as batteries, chargers, cases, shipping fees, and gift wrapping. If you have money left in your budget, withdraw that amount of cash and be selective in choosing what to buy yourself .

Social Events

Throwing a party can multiply your holiday costs in a big way, but so can being a guest (especially as your social calendar fills up). Potluck and Secret Santa events ease the financial strain on hosts, but increase partygoers’ expenses. The added cost of babysitters, cab rides and holiday attire may leave you feeling less than festive.

SAM smart tip: Rather than buying individual wine bottles for host and hostess gifts, do your research at the wine shop and invest in a case. When assembling your holiday cheese plate, check your grocer’s deli for “odds and ends” cheeses, which often are inexpensive and allow for greater variety.

Disposable Goods

Paper plates and plastic cups might be easier in the short run, but they carry long-term financial and environmental costs. Investing in durable holiday flatware and food containers will reduce waste and save you a trip to the store next year. And keep in mind that often there are fees for properly disposing of old electronics and other household items that you replace with newer models this season.

SAM smart tip: Don’t forget your reusable shopping bags. Many cities have passed legislation to charge up to 15 cents per single-use bag. While the cost is not much, it is avoidable.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement of recommendation by Smart About Money.]