The holiday season is one of the happiest times of the year, but it’s also when most people lose their grip on spending. 

Between shopping, travel, and festive gatherings, costs add up fast, and before you know it, your wallet’s feeling the hit–well into the new year.

It’s also a time of year when emotions and spending run high, and businesses know it. 

Retailers and advertisers are ready with every trick up their sleeves to get you to open your wallet—limited-time offers, holiday bundles, and that endless barrage of “must-have” items. They’re playing on our desire to make the season memorable.

The reality then hits in January: many households face a serious financial hangover. According to recent data, holiday shoppers in the U.S. spent an average of $1,200 per person in 2023, and that number is expected to increase by over 7% this year.

Credit card debt from October to December 2023 also spiked by over 4.6% from the previous quarter. 

The result? we end up paying for this holiday season well into next year. 

But when you decide upfront what matters most, you don’t end up with that sinking feeling come January.

In this guide, you’ll get 5 tips to keep your spending in check, your mind at ease, and your wallet in great shape. 

1. Set a realistic budget and stick to it in a detailed, actionable way.

Most people start their holiday shopping without a plan. The excitement of the season takes over, and suddenly, you’re buying that extra gift, those decorations, and the fancy wrapping paper that seemed so necessary in the moment. 

And by the time you check your balance, it’s too late—you’re way over budget.

Over 73% of holiday shoppers in US plan to set a budget, but only 27% actually stick to it. And those who don’t? They end up spending on average 20-30% more than they intended. 

The goal is to enjoy the holidays without the regret that comes from holiday debt. So let’s get you set up with a realistic, stick-to-it budget.

Calculate How Much You Can Realistically Afford

Budgeting starts with one question: How much can you comfortably spend without dipping into savings or racking up credit card debt? Review your finances, consider any upcoming expenses outside of the holidays, and be brutally honest. 

  • Start with essentials: Identify what you absolutely need to cover this season: gifts, travel, food, events. This is your “non-negotiable” list.
  • Set boundaries: If you’ve got $1,000 to spend, don’t stretch it to $1,200. Look at that $1,000 as a hard cap. 

Break Down Your Budget by Category

It’s not enough to just say, “I’ll spend $1,000 max.” You need to break that down so you know exactly where it’s going. Here’s a quick breakdown template to get you started:

  • Gifts (50% of your budget): Include family, friends, coworkers, and any other gift obligations.
  • Food and entertaining (20%): Whether hosting or contributing to a gathering, food can add up.
  • Travel (15%): If you’re going to see family or friends, account for gas, flights, lodging, and unexpected costs.
  • Decorations (5-10%): Set a reasonable cap here, especially since these are often one-time purchases you can reuse.
  • Miscellaneous (5%): There are always last-minute surprises, so give yourself a small buffer.

If your budget is $1,000, that’s $500 for gifts, $200 for food, $150 for travel, $100 for decorations, and $50 for misc. Putting every dollar in its place helps keep spending controlled and purposeful.

Track Every Dollar Spent

This is where most people lose control. They set a budget but don’t actively track their spending, so they end up guessing (and typically underestimating). 

Use a simple spreadsheet or a budgeting app to track every purchase. Whenever you buy something, log it immediately. Waiting until later almost always means you’ll forget certain items–and small purchases add up surprisingly fast.

You can decide to use:

  • Digital tools: Use free apps like Mint, YNAB, or a budgeting feature on your banking app to stay on track.
  • Manual tracking: If you prefer pen and paper, create a holiday spending journal where you can list every purchase and its cost.

Review and Adjust as Necessary

No budget is perfect from the start. Plan to check in weekly on your spending—are you sticking to your limits? If you’ve overspent in one category, adjust by reducing in another. For example, if you splurged a little on gifts, consider cutting back on decor or opting for a potluck dinner instead of hosting a lavish event.

2. Shop early and strategically to avoid price hikes.

You know the drill: holiday prices soar the closer you get to the big days. And if you’re scrambling to buy gifts a week before, you’re already losing money. 

Retailers know that last-minute shoppers are pressed for time, which means they can get away with higher prices and fewer discounts. 

Shopping early is one of the most effective strategies for keeping your holiday budget in check.

Prices on popular holiday items like electronics, toys, and seasonal decor increase by 15-30% as December rolls around. Early holiday shoppers save an average of 25% compared to those who waited until December to make purchases.

How’s what you need to do:

Create a Shopping Calendar

One way to stay ahead is by planning key purchases around sales events. Mark your calendar with major sales like Black Friday, Cyber Monday, and early December discounts. 

But don’t stop there—many retailers offer early deals throughout October and November.

  • Black Friday and Cyber Monday: These are prime times for electronics, appliances, and big-ticket items.
  • End-of-season sales (October/November): Great for winter apparel and seasonal decor. 
  • First week of December: Many stores offer “Green Monday” sales for last-minute deals on items that are still in stock.

The goal is to buy strategically at these times rather than scrambling at the last minute when prices are at their peak.

Use Price Tracking Tools

You don’t have to check every website manually anymore. There are numerous tools out there that let you monitor price changes and compare prices across retailers.

  • Use price-tracking tools: Websites and apps like CamelCamelCamel (for Amazon), Honey, and PriceGrabber allow you to track the price history of items so you can see when they’re at their lowest.
  • Set price alerts: Some apps, including Google Shopping, let you set alerts for price drops, so you’ll be notified when an item hits a certain price.

Utilize Cashback and Rewards Programs

Maximize your purchases by taking advantage of cashback offers and loyalty programs. Most major credit cards, banks, and shopping apps offer holiday-specific bonuses or rewards. 

A cashback reward of even 5-10% adds up over multiple purchases and can be put toward other holiday expenses.

Avoid Financing or “Buy Now, Pay Later” Options

It’s tempting to defer holiday payments. But this is just another way of kicking the can down the road. U.S. shoppers are projected to spend a record-breaking $18.5 billion on holiday purchases this year.

Instead of spreading payments into the new year, stick to cash or debit for as many purchases as possible. This helps you stay within budget and ensures you’re not carrying holiday debt into January.

3. Prioritize gifts with meaning, not spending.

When it comes to holiday gifting, it’s easy to fall into the trap of thinking that a high price tag equals a better gift. 

According to a recent study, over 80% of people believed personalized gifts are more thoughtful than non-personalized gifts in 2023. They remember the thought behind the gift, not the brand name. 

And here’s the benefit for you: when you focus on personal or DIY touches, you’re able to spend within your means while still making each gift impactful. Meaningful gifts carry an emotional value that doesn’t rely on a big budget.

Make a List of Interests and Hobbies

Start by thinking about each person’s interests. Are they into cooking, reading, or fitness? Do they have a specific hobby or passion? These details are necessary for thoughtful, relevant gifts that feel personal.

For example, if your friend loves coffee, you don’t need a fancy espresso machine. A quality coffee sampler with a handwritten note explaining why you picked each blend can be just as meaningful (and much more affordable). 

Focus on Experiences Over Physical Items

Gifts don’t always have to be things—sometimes, experiences are much more memorable. Studies show that people cherish experience-based gifts longer than they remember physical items. And these experiences don’t have to be expensive.

  • Gift of time: Offer a coupon for a day out together–like a hike, a movie marathon, or a game night. For parents or close friends, this can be especially meaningful.
  • Subscription gifts: Consider gifting subscriptions to something they’d enjoy—a book club, a magazine, or a month of a streaming service they haven’t tried yet.
  • Workshops or classes: Many online platforms offer affordable classes on everything from photography to cooking. Gifting an online class can be a great way to provide a lasting experience they’ll remember.

Prioritizing gifts with meaning over cost shifts the focus to what really matters during the holidays: the joy of connection, thoughtfulness, and shared experiences. Stick to this approach, and you’ll find that the memories—and your budget—will be far richer for it.

4. Use cash, not credit, to curb impulse buys.

Over 54% of Americans made at least one impulse purchase during the holiday season in 2023.

Holiday shopping often feels like an all-you-can-spend buffet, especially when credit cards are involved. Swiping a card or clicking “buy now” online doesn’t feel like real spending—until the bills come in January. But here’s the harsh truth: using credit during the holidays can easily lead to overspending. 

In fact, people who use credit cards spend 12-18% more than those who pay with cash. This season, let’s take a different approach by sticking to cash for purchases where possible.

Ultimately, there’s a psychological difference between spending cash and swiping a card. Studies show that people are less likely to overspend when they physically see cash leaving their wallets. 

For instance, if your budget is $300 for gifts, taking out exactly $300 in cash forces you to stick to that limit. Once the cash is gone, you’re done shopping. No surprises, no added debt.

Track Your Cash Spending as You Go

Using cash doesn’t mean you should skip tracking your expenses. It’s essential to record each purchase so you know exactly where your money is going and how much is left in each category. 

  • Use a notebook or spending journal: Write down every cash purchase in a small notebook or spending journal you can carry with you. Record the amount spent and the remaining balance in that category’s “envelope.”
  • Receipt collection: Collect receipts for each purchase and tuck them into the appropriate envelope for easy reference. At the end of each shopping trip, check your spending totals to ensure you’re on track.

Avoid Using Credit Cards as a Backup

When you’ve committed to cash, resist the urge to pull out a credit card if you run low. The purpose of using cash is to set limits you can’t break. 

Once your cash runs out, it’s a clear sign that you’ve hit your budget.

  • Leave the credit card at home: When you go holiday shopping, bring only the cash you need. Leaving the credit card behind removes the temptation to overspend.
  • Emergency fund: If you’re worried about emergencies, keep a small, separate emergency fund in your wallet (but not for holiday purchases). This way, you’re prepared for unexpected costs without dipping into your holiday budget.

Commit to this discipline, and you’ll avoid credit card debt and the “just this once” mentality that can quickly spiral.

5. Don’t say “yes” to every deal.

Holiday sales are everywhere, and it’s tempting to say “yes” to each one that pops up. But not every deal is actually a deal, and agreeing to every promotion, sale, or event invitation is a fast track to blowing your budget.

Retailers design holiday sales to create a sense of urgency, pushing limited-time offers and exclusive discounts that make you feel like you have to buy right now. 

But that’s not true most of the time—many of these “exclusive” deals will return after the holidays, and some even end up cheaper in the post-holiday sales. 

Plus–believe it or not–not every discounted item is something you really need.

Set Boundaries on Deals and Promotions

A few smart questions can help you resist the urge to jump on every deal that comes your way:

  • Is this item on my planned shopping list? If it wasn’t part of your budgeted list, skip it. Impulse buys add up quickly and throw your spending off track.
  • Will this really bring value, or is it just a nice-to-have? Ask yourself if the purchase truly serves a purpose or if it’s just the thrill of a discount.
  • Can I get a better deal later? With many holiday items, waiting until January might save you even more. 

Having these mental checks in place helps you evaluate deals based on your real needs, not the hype of the moment.

When you set boundaries and say “no” to deals that don’t fit, you take control of your holiday spending. This simple practice of thoughtful decision-making means you’re far less likely to end up with buyer’s remorse. 

And more importantly, it ensures that the holidays are about what’s meaningful to you—not what marketers want you to believe is essential.

Conclusion: Start the New Year Financially Fresh

As the holiday season unfolds, the choices you make now will determine whether you start the new year feeling empowered or stressed.

When you approach holiday spending with intention, you’re also freeing yourself from the cycle of financial stress that can overshadow what should be a joyful time. 

Instead of feeling pressured to stretch your budget thin, you’re focusing on quality time, meaningful gifts, and purposeful celebrations that genuinely enrich your holiday experience.

You get to enjoy everything the season has to offer—without worrying about the financial repercussions in January. Start the new year on solid financial ground by sticking to these simple, effective tips.