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5 Reasons Why People Spend Too Much Over The Holidays

Don't overspend at Christmas

Is there anything you need this bad?

It’s almost Thanksgiving and after that, only a few short weeks until Christmas. Stores are gearing up for the mad rush we call holiday shopping, hoping the last 6 weeks of the year will keep them in the black. My big wish for everyone this holiday season is to keep your own budget in the black. How many of you have started a new year with less money or more bills that you planned? Here are 5 reasons why I think people spend too much money over the holidays and how you can avoid the traps retailers use to get more of your hard earned money.

1) Credit

This was always our Achilles Heel at Christmas or really anytime we went shopping. If we didn’t have the money, it didn’t matter. It’s so easy to get caught up in the moment, swipe the card, and not think about it until the bill comes next month.

To avoid overspending, set a limit for gifts and once you’ve hit the limit, stop. If you can’t be trusted with credit cards, shop with cash or purchase gift cards in the amount you can afford. Once the money is gone, it’s impossible to overspend.

2) It Was A Good Deal

I have a theory that most people who go Christmas shopping end up buying lots of stuff besides Christmas gifts. It’s hard to pass up a buy one get one half off deal or walk past the store with brand new TV’s at the “lowest prices of the season.” I know tons of people, self included, who have even bought new cars around Christmas because dealers are trying to clear out this year’s models and offering, “once in a lifetime pricing.”

I have news. Once in a lifetime pricing usually happens once or twice a year. Now that I’ve been on the sidelines of consumerism for a while, I’m able to see past the hype and I notice that stores do the same thing every year to attract unsuspecting consumers. Ignore it.

If you are looking for a specific product you’ve deemed necessary or valuable, then go look for crazy deals or sales, but don’t buy things simply because they are on sale.

3) Not Cutting Back in Other Areas

Ideally, in January, we should start planning our Christmas budget. If you want to spend $2000 on Christmas, you’d need to save $166.67 every month. I started doing this years ago. I opened up a Capital One account, earned the new account $50 bonus, and had $75 a month direct deposited from my paycheck every month. By Christmas, the money is already there and there are no worries about holiday spending.

Sadly, most people don’t plan that far ahead. It would still be easy to afford the holidays if you cut back on other spending, but most people do the opposite. Money spent on eating out, travel, personal care like haircuts and manicures, new clothes, and buying home decor  all increase toward the end of the year. If you haven’t saved, you’ll need to pick and choose how you spend money over the next month and a half. Is that new dress for your holiday party or that really annoying cute singing reindeer worth going into debt?

December is the perfect month for no clothes shopping or eating out of your pantry. Will anyone really notice if you wear last year’s dress or don’t have Frosty the Snowman mugs to serve eggnog?

4) Going Shopping Out of Boredom

This was also a big trigger for us. We have some time off over the holidays. All the stores look festive. It’s cold and dark. Why not go to the mall? We don’t have to buy anything. We’ll just look around. If you do this, then go back up to numbers 1 and 2. Shopping out of boredom is a great way to make yourself broke. Unless you have superhuman will power, it’s easy to get sucked up in the season of consumerism.

I’m making it a goal to have Christmas shopping done before Thanksgiving, and 90% of it will be from Amazon. I will not be tempted by Christmas music, pretty displays, or one day only sales. I also think if you wander out on huge shopping days like Black Friday, you’ll get caught up in the momentum and buy things you hadn’t planned on buying.

If you need to get out of the house, why not….

  • Drive around and look at Christmas lights
  • Go to a movie
  •  Go ice skating
  • Take a walk
  • Build a snowman
  • Volunteer for a charity
  • Go to a community concert or play
  • Work out

Not all of those things are free, but they are a heck of a lot cheaper than going shopping because you’re bored!

5) Waiting Until the Last Minute

I understand that we are all busy, but waiting until the last minute for Christmas shopping is a sure way to spend more than you planned. Selection is worse. Shipping costs are more. You don’t have time to comparison shop. You’re tired of being stressed and spend more just to be done.

I hate feeling rushed or being behind. It takes the joy out of the season and turns me into a big Grinch. I am always shocked by the statistics about people who wait to do holiday shopping on Christmas Eve. If that’s you, make it a challenge to be finished early this year. Use those last hours before Christmas to relax and spend more time with your loved ones. I bet you’ll save money and avoid lots of premature gray hairs.

What is your Achilles Heel when it comes to holiday spending? Do you plan ahead or wait until the last minute?

 Image: Wikipedia Commons



About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. Yeah, I’ve been the victim of #2 in the past……we go out shopping for gifts for our loved ones and end up buying gifts for ourselves. Not in the budget, not planned for….just blatant overspending!

  2. I was guilty of #1 & #2 in the past. I would spend in spite of myself – even though I knew I didn’t have the money. Now we just budget for it throughout the year and when it’s spent it’s spent. It makes managing it much easier.

  3. For me, my holiday spending achilles heel has always been emotional. I love buying gifts for others and giving to others, so I would always rationalize that it was good spending because I was giving. I have now moved a lot of the emotion out of the equation and I have started doing what you do as well and that is planning for the holiday spending. It’s so much easier to save $50 – $100 a month for the holiday gifts than handle a $2,000 bill all at once. It’s a best practice I try to get my clients to subscribe to as well.

    • I do like the feeling of giving to others, but I’ve come to realize I can get that feeling by donating to charity or volunteering. I’d also like to pay it forward and buy someone’s dinner or leave a gift card for the person behind me at the grocery. That makes me feel better than buying gifts for people I know don’t really need anything.

  4. I plan ahead for the holidays and stick to a budget. It helps that I am an awful shopper to begin with and absolutely hate it. I only do what is necessary.

  5. Definitely plan ahead. We decide what to spend in January and put 1/12th into a special fund each month. We do use credit cards because we now do almost all of our shopping online, but when the bill comes the money is sitting there just waiting to be used. I try shopping throughout the year, but don’t get a lot of cooperation from the family on gift ideas. This year I’ll probably be done by Thanksgiving.

    • We use credit cards for the points, but we pay it off with our account, just like you mentioned. Takes the sting out of holiday shopping for sure.

  6. The day I found out that I was getting out of bed to stand in line at zero dark thirty in the morning to get one of only 3 flat screen TV’s for $4.99, I stopped shopping on black Friday’s. The best way is to shop year round during all the sales and finish your gift list by late spring. That way you skip the drama and don’t have to karate chop someone in the head to get to the deals.

    • Late spring would certainly be something to shoot for. I remember a few years ago when we were coming home from Thanksgiving dinner and saw all the people lined up at Best Buy waiting for midnight. Crazy!

  7. I have very little I need to buy for the holidays so it’s one spending area I’ve never had to worry about. On the downside of that, I don’t have that warm fuzzy Christmas that most people do.

    • I think there are probably more people that would admit who also don’t have that warm fuzzy holiday they want people to think they have. Most big family get togethers have some drama or tragedy, at least ours always do.

  8. “Once in a lifetime pricing usually happens once or twice a year”- haha, aint that the truth.

  9. We’re guilty of almost all of these from time to time. I think the big one is trying gauge how much our kids will have to open on Christmas day. If we don’t feel like its enough then we feel the internal pressure from ourselves to keep going.

    • Why is it that we have to give them so many things to open? My Mom got candy, an orange, and maybe a pair of shoes for Christmas and was happy as a clam.

  10. My wife (literally) purchases Christmas presents all throughout the year. We didn’t do this the first couple years we were engaged/married, and having that big of a hit in December was not fun. So we adjusted and prepare better.

    I think credit is by far the biggest reason people spend more than they should on the holidays. That and friend/family pressure to exchange gifts. If you take those two out of the equation I think everyone’s spending would be held in check.

    • I think it’s a great idea to do that. I have bought stuff very early then forgotten about it. As long as it’s put in a place where you remember that’s a great way to plan and break up costs over the year.

  11. I’m definitely a planner so Christmas is a line-item on our budget. I try to buy presents throughout the year as I find things, but there always a handful of presents that I still need to buy in December. I see #1 and #2 all the time. I have no problems with credit cards but people need to remember it’s not free money and so many treat it as such. All the so-called good deals can really bust people’s budgets too. Stores do a great job of creating a scarcity environment/mentality so people feel that must buy it before it is too late. They know how to make people shop emotionally, rather than mindfully.

  12. No doubt waiting until the last minute is the worst thing you can do from a financial perspective when shopping for holiday (or any other type) gifts. You leave yourself with few options.

  13. I don’t want to sound like Scrooge (okay, maybe a bit…) but Christmas seems to have become little more than a commercial exercise for stores to extract as much money as possible out of the population before the holiday season is over.

    A friend of mine recently told me that she and her family had decided to ditch Christmas this year and spend the money on a holiday in the Bahamas instead. I was tempted to ask if there was any room left on the flight…

  14. I think my weak spot is setting a budget, then thinking I HAVE to spend that much per person, then I try to even things out and end up buying more. We have a smaller budget because we had some surprise weddings and babies (unrelated) this year. So, it should be an interesting gift buying/budget exercise.

    • Congrats for realizing you have less to spend because of some other expenses. Most people spend the same as they always have, even if the money isn’t there, and then end up in debt.

  15. Last year I waited until the last minute and got burned by slow delivery from Amazon so my wife didn’t get most of her presents. This year we were all done before November. One day off of work and a day free from the little one and we headed up to the mountains and bought a couple of items and said we are done for Christmas. The relief was great. The satisfaction of spending little was awesome. We’d rather have time together as a family than to be running around buying stuff we really don’t need.

    • “We’d rather have time together as a family than to be running around buying stuff we really don’t need” This could be my anthem these days. A family trip or activity is worth more to me than just about any material thing.

  16. I can’t stop buying gifts… Which I know, so I have to pace myself and know when to say enough is enough. I set a rough budget for different people and try to more or less stick to that.

  17. Our holiday shopping list these days is pretty short but we tend to get them in advance. In the past though I was definitely guilty of points 1, 4 and 5!

  18. I have already made a list of persons whom I will be giving gifts. I’ve also indicated how much budget I have for every person so that I have a limit for each and every one of them. More importantly, I’ve also put some notes what kind of gift they most likely would appreciate. I am guilty of points 3 and 4.

  19. We have been trying to scale back christmas with our respective families for a while. It’s not about presents. It’s not about stuff. Most want that mountain of gifts, even if stressful on their wallet. So in order to get the mountain, we often end up with just stuff, not meaningful gifts that reflect us. The flip side is we try to do nice gifts on a budget. Many times this leaves me feeling guilty that we didn’t do as much as others, despite our healthy paychecks. I feel judged by them. All that said, we make a plan. And stick to it. I di tend to wait too long, which then costs me my sanity…

    • I think that is a big reason why I like gift getting and receiving less and less. I also feel judged like I’m either not giving enough or too much. In a perfect world, we would give or not give based on how we feel and no one would get upset.

  20. It’s so hard to pass up a good deal;0) I’m learning though. We have a few gifts purchased already. We definitely don’t wait until Christmas Eve … there’s nothing left then!

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