The holidays should feel joyful and not stressful. But every year, millions of people head into the season full of good cheer and come out with a hefty credit card balance and a queasy feeling when January rolls around. Sound familiar?
You’re not alone. The average American spends over $1,700 on holiday shopping—and that’s not counting the extras like travel, decorations, parties, and hostess gifts. But here’s the good news: it is possible to enjoy the holidays without digging yourself into a financial hole. You just need a little planning and a few smart strategies to get you through the season feeling good about your spending.
Let’s break it down.
1. Know Your Number (aka: Set a Holiday Budget)
Start here: figure out how much you can afford to spend. Not how much you want to spend. Not how much you spent last year. How much you can actually afford.
Take your monthly income, subtract your essentials—things like rent, groceries, utilities, and debt payments—and look at what’s left. That’s your discretionary spending. Now decide how much of that you’re willing to dedicate to holiday expenses. Set that number, write it down, and stick to it.
And remember: it’s okay if your number is smaller this year. You can absolutely have a meaningful holiday on less. What matters most is that you’re spending intentionally not impulsively.
2. Start a Holiday Fund (It’s Not Too Late)
Ideally, you’re saving a little all year long for the holidays. But if that didn’t happen this year, don’t stress. Start now. Even putting aside $20 a week between now and mid-December gives you a cushion—and anything is better than nothing.
Pro tip: Set up a separate savings account and automate a weekly transfer. That way, the money’s already there when you need it (and you’re not tempted to dip into it for takeout or last-minute shopping sprees).
If you can plan ahead next year, saving just $10 a week gives you over $500 for gifts, food, and festivities. That’s a holiday win.
3. Be Strategic About Gift-Giving
This is where things can really add up fast. So take control early.
Make a list of everyone you want to buy for. Then set a spending limit for each person. (Yes, even your kids. Especially your kids.) One of my favorite tools is the “Four Gift Rule”: something they want, something they need, something to wear, and something to read.
You can also make gifting more meaningful and less expensive by:
- Doing Secret Santa or gift swaps in big families
- Giving homemade treats or photo gifts
- Offering experiences instead of things (like a movie night or babysitting coupon)
The goal isn’t to give less—it’s to give smarter.
4. Shop Smart (Really Smart)
We’ve all been tempted by those flashy “limited time only” sales. But here’s what really works:
- Set a list and stick to it. Impulse buys are where budgets go to die.
- Use coupon codes, cashback apps, and rewards points. A few extra clicks can save you real money.
- Start early. You’ll have more time to compare prices, snag deals, and avoid the last-minute panic that leads to overspending.
- Don’t fall for every sale. If it wasn’t on your list, it’s not a deal.
And one more thing: try not to buy gifts on credit. If you can’t afford it now, you probably won’t want to pay it off with interest next spring.
5. Don’t Let Existing Debt Snowball
If you’re already working to pay down debt, the holidays can feel like a setback. But they don’t have to be.
Before the season kicks in, revisit your debt plan. Are you on track with your payments? Could you bump up your emergency fund just a little? Could you pause extra debt payments temporarily so you’re not relying on credit cards for gifts?
And if your debt feels overwhelming, don’t wait to ask for help. Talk to a nonprofit credit counselor or explore options like consolidation or a structured repayment plan. You deserve a holiday season that feels good—and that includes your financial health.
Bonus Tip: Remember What the Holidays Are Really About
I know this sounds cheesy, but it’s true: the best parts of the holidays aren’t things you can buy. They’re the traditions, the time with family, the cozy moments, the food, the music, the connection.
No one remembers what they got for Christmas three years ago—but they do remember how they felt.
Focus on creating memories, not debt. That’s what lasts.
Finally
Avoiding holiday debt isn’t about being a Grinch. It’s about giving yourself the gift of peace of mind and starting the new year feeling in control, not in the red.
So make a plan. Spend with intention. And enjoy the season knowing your budget and your future are both in great shape.
Sophie Lane 
Daniel