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How to Avoid Holiday Over-Spending

By Team Tomorrow
Published August 12, 2019


There are some among us who get all of their holiday shopping done by September. My mother-in-law is one of them. Then there are those of us who can be found frantically speed walking and picking up a few final items on Christmas Eve.

Whenever you do start Christmas shopping, going into debt when checking off your list will make the holidays—and the next year—less than merry. Unfortunately, it’s a trap that is easy to fall into if you don’t plan ahead. If you do incur debt when shopping and do not pay it off before it starts accruing interest, the true cost of those gifts will end up being more than what you paid at the register.

According to a survey conducted by the National Retail Federation, consumers plan on spending an average of $608 on gifts for family, friends, and coworkers, $218 on holiday purchases like decorations and food, and $141 on other holiday non-gift purchases for themselves and their families. That’s a total of nearly $1,000 in holiday spending.

For many consumers, that $1,000 will put them in debt for a few months or longer, making the final cost higher than what is shown on the receipt. Here are a few ways to avoid the holiday debt trap.


How to Avoid Holiday Over-Spending

1. Make a budget.

Before you start buying, decide how much you can afford. If you want to spend a little more, set aside small amounts throughout the year, or buy gifts on sale during the year.

Don’t overthink and stress over the budget, or you might end up avoiding it altogether. You can either assign a dollar amount that is affordable or break it down into a few categories, such as gifts for family, friends and others, food, decorations, and travel.

2. Plan it out.

Once you have a dollar amount to work with, make a list of what you plan to spend it on. The more specific you are, the better. Try to account for as much of your holiday purchases as possible.

For example, you may be getting gifts for friends, family, teachers, co-workers, service professionals, etc. Also include costs for gift wrap, goodies, greeting cards, decorations, and other expenses so you have a whole picture of what your holiday spending will entail. If your family is traveling over the holidays, be sure to include expenses beyond travel such as dining out and special events.

By planning in advance, you can make adjustments when spending, that allow you to stay within your budget. Having a plan before shopping online or in store will help you avoid splurges that will push you over budget.

3. Write it down.

Psychologists tell us that the best way to stick to a plan is to write it down. People are notoriously forgetful. Having a written plan increases the likelihood that you will follow it for a simple reason—it will help you will remember.

Prominently display your plan in a location that is easily accessible, such as the fridge door or on a bulletin board, so it doesn’t get buried and forgotten. Also, if you make the list and budget digitally, you can edit it next year and reuse it.

4. Watch for deals.

You can stretch the budget a little farther if you keep an eye out for deals over a few months rather than waiting until the last minute. The best deals aren’t always on Black Friday and by tracking prices over time you’ll know if you’re getting a good deal or not when something goes on sale. Use tools such as The Camelizer, which tracks items that are sold on Amazon.

5. Simplify.

You can stay focused on the budget by simplifying your holiday plans. This could mean trimming back your holiday gift list, reducing or eliminating holiday baking, choosing experiences over gifts, and prioritizing traditions or events.

If you are concerned about not spending enough, or not buying enough for others, just remember that most gifts are no longer being used after 6 months, and that less expensive gifts may be more memorable.

6. Revisit your budget to stay on track.

According to a survey by T. Rowe Price, 58% of parents said they did not stay within their budget, if they had one. Be sure to check in with your budget and spending plan as the holiday season approaches. Having a visual reminder will increase your commitment and the likelihood that you will follow the plan.


Give yourself the gift of financial well being this holiday season. Making and following a reasonable budget can reduce your stress level during the busy holidays and help you start the new year debt free.

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