The holiday season is filled with joy, generosity, and celebration—but it can also bring a wave of financial pressure that lingers long after the parties end.
Between gifts, travel, food, and festive events, paired with clever sales tactics that hinge on overspending and impulse buying, it’s easy for spending to spiral and debt to accumulate quietly. But don’t fret. There’s good news. With a bit of planning and a mindful approach, you can still have a fantastic holiday season without sacrificing your financial well-being or goals. And we have some inspiring boss babes in the finance industry who are here to share tips on taking control of our budgets, avoiding holiday debt, and still enjoying the joyful spirit of the season.
Naughty Or Nice: Shopping With Credit
Last year, 36% of Americans took on “holiday debt,” averaging $1,181 in new balances—mostly on credit cards (65%) and store cards (24%). Parents with young children were hit hardest, with nearly half (about 48%) going into debt, followed by Millennials and Gen X consumers. There’s also an uptick in deferred payment options like PayPal In 4, Afterpay, and Klarna that can lead to sticky situations.
“If you have to lean on credit during the holidays, the safest way is to treat it like a short-term tool — not long-term debt,” says financial planner Nadia Vanderhal. “I always tell people: know the ‘terms and conditions’ of how you use debt just as much as the lender’s. That means knowing your cash flow, your payoff plan, and your timeline before you swipe. This is where people slip — not in the spending, but in not knowing their payoff capacity.”
She also suggests that when using credit cards, it’s a good idea only to charge what you can comfortably pay off within 30–45 days. This keeps your spending aligned with your available cash, helping you avoid debt and making your financial management more straightforward. For example, if you make a $300 purchase, perhaps for the rewards, it’s best to have that $300 ready to pay it off.
Make Your List And Check It Twice
We know that ‘budget’ can sometimes be an intimidating word. However, we must be honest about what we can and can not afford this holiday season and beyond. Having a clear plan can help you feel more in control and less overwhelmed, making your holiday budget more manageable.
“Before you spend a dollar, you have to name your real number, not the one you’re hoping to have but the one that’s truly within your means,” says Patrice Washington, founder of the Institute for Redefining Wealth. “That means looking at what’s coming in, subtracting what must go out, and refusing to let generosity drag you into a financial deficit,” she says.
Financial educator Lachelle P. Johnson shares that sentiment and reiterates the importance of not only making a budget but sticking to it. As you plan, Johnson says to remember to account for non-gift holiday costs, such as Secret Santa participation, travel expenses, and attire. Her other great tip is to “shop early or shop once.” Choosing a specific day or weekend for shopping can help you avoid decision fatigue, which often leads to overspending.
Sleigh Your Spending This Holiday Season
Saving money throughout the year for holiday expenses is one of the easiest ways to ensure a joyful holiday season rather than a stressful one. But don’t worry. If that wasn’t possible, you can still optimize your monthly budget and cut costs temporarily to free up funds for the holidays. Janean C. Armstrong, Retail Market President of VyStar Credit Union, offers a few ways we can add some extra dollars to our holiday shopping budgets:
- Subscription Cleanup: Assess your streaming services and monthly memberships. Do you truly need them all right now?
- Watch ‘Grab and Go’ Spending: Temporarily cut back on lunches out, quick coffees, and impulse “treat yourself” moments.
- Avoid Impulse Buys: Limit unnecessary Amazon orders or big-box store runs. If an item is not needed immediately, it can wait.
Remember The Reason For The Season
It’s easy to find ourselves caught up in the excitement, browsing Instagram and adding tempting items to our Amazon and Like It To Know It carts. We’ve all been there! But, before you start filling your cart, take a moment to remember the true spirit of the season: spending quality time with family and loved ones. The holidays are about celebration and connection, not just gifts and material things. Patrice gently reminds us that essentials like rent, utilities, groceries, and household needs should always come first—no exceptions, even during the festive season. It’s all about balancing joy with responsibility, making sure we can truly enjoy the moments that matter most.
The secret to a great gift is to be intentional and creative. You can also lean into group experiences over individual gifts, shared Armstrong. If you’re crafty, homemade gifts are always sentimental. Or, you may stumble upon a few gems while thrifing. And, you can always regift unused items. When it comes to hosting, Armstrong suggests making it a potluck to keep costs within your budget.
Let Others Know Where You Stand
Talking openly about your finances can help you feel supported and understood, easing the stress of holiday planning and gift-giving expectations. If you’re wondering how to do that, check out these scenario scripts suggested by Lechelle:
To Kids
“Mom/Dad is choosing to spend smart this year so we can reach our goals faster. That means fewer gifts but more fun and shared experiences. You are going to LOVE what we picked, but we’re not doing a big pile under the tree this year.”
To a Partner
“I want us to enjoy the holidays without stress or debt, so let’s agree on a gift budget that feels good for both of us. My goal is peace, joy, and financial clarity, not overspending.”
To Friends Who Want to Exchange Gifts
“I’m doing the holidays on a budget this year and keeping it simple. Instead of exchanging gifts, want to do brunch/movie/hot cocoa and a fun hangout instead?”
Declining a Secret Santa or Group Gift
“Thanks for including me! I’m keeping my spending tight this year, so I’m going to sit this one out. Wishing everyone so much fun, I’ll happily join the celebration!”
When Someone Gives You a Gift Unexpectedly
“Thank you so much, this means a lot! I didn’t do much gift-giving this year, but your kindness truly made my day.”
Keeping your finances in check during Christmas isn’t about sacrificing fun; it’s about caring for your financial well-being after the festivities. By making thoughtful choices and sticking to a budget, you’ll step into the New Year feeling confident, relaxed, and debt-free.