5 Ways to Avoid Overspending During the Holidays

By Tracy L. Hirsch

Worried about draining your wallet on holiday gifts? These tips will ensure that you’ll have a smile on your face when your January bank statement comes.

It’s the most wonderful time of the year! And… It’s the most expensive. Did you know that the average American without children spends nearly $1,000 on holiday gifts, and that the average American with children spends an average of $1,700?

It’s predicted that the United States will spend roughly $500 billion dollars on holiday gifts this year, and a majority of those gifts will end up on credit cards. While it’s fun to get caught up in the holiday spirit, it can easily lead to unwanted debt that you’ll be paying off until the end of next year (with interest no less).

So how can you experience the joy of Christmas, Hanukkah, and Kwanza without the regret of overspending that often comes in the months afterward? If you’ve gone over budget in the past, here are five tips for avoiding debt in this upcoming holiday season:

1.) Start making a list and checking it twice.

Before you start thinking about what you’re going to buy, first think about who you’re going to buy gifts for this year.

It’s best to make two lists: one that contains close family and friends, and another that contains people who fall under the “acquaintance” category, such as neighbors, co-workers, and your kids’ school teachers.

While your family members and friends might get gifts such as electronics, clothing, home appliances, and gift cards, you shouldn’t feel obligated to give the same type of expensive gifts to acquaintances.

Instead, you can show your appreciation to neighbors and others with a homemade cookie tray and a card, a bag of locally-roasted coffee beans, or an inexpensive bottle of wine. Once you have your list of gift recipients, it’s time to set a spending limit.

Don’t let the joy of the season lead to financial decisions that bring the post-holiday blues. 

2.) Have yourself a merry little budget.

Nobody wants to have a budget, but unless you’re the CEO of Amazon, you most likely don’t have tens of thousands of dollars in extra spending money.

While a budget may seem like a buzzkill, it’ll actually make your New Year a lot brighter when you have enough money to pay all of your monthly expenses for January.

It’s important to decide how much money you can afford to spend on gifts, not how much you want to spend.

Create an Excel spreadsheet with your allowed amount at the top, and then insert each recipient’s name with the maximum amount that you’ll spend for each recipient. Then add columns for the amount you’re spending, and the remaining balance.

If you don’t have Excel, no worries! You can create a table in a Word document, use the ‘Notes’ app in your phone, or even write it down on a piece of paper.

Here’s an example:

                           Total Holiday Gift Budget: $500

Maximum Amount
Amount Spent
Remaining Amount
Neighbor #1
Neighbor #2
Jackson’s Teacher
Willow’s Teacher

Remember that you don’t have to use your full budget amount. The ultimate goal is to have some left over in the ‘remaining amount’ category, but as long as you aren’t in the negative in the last category (i.e. below zero), you’re golden!

3.) Thinking about using credit cards? Let it go, let it go, let it go!

If you’re able to use your credit card knowing that you can pay it off in full on your next billing cycle, then gather up those rewards and get your 3% cash back!

However, if you’re tempted to go over your set budget by charging multiple credit cards (and if you’ve done that in the past), it’s best to either use cash or a debit card. Maxing out several credit cards and then planning on paying them off throughout the following months of the new year is never a good idea.

When you tack on high interest rates, plus the fact that you’ll need to pay your regular monthly expenses (groceries, mortgage, utilities, etc.), you could end up in a situation where you’re paying hundreds of dollars in interest every month AND you’re without enough funds to pay your other bills.

While paying cash may seem like an old-school way of shopping, you’ll be glad that you did it when you don’t have any holiday debt next year.

4.) Do you see what I see? Your accountability partner will!

If you have a history of overspending around the holidays, ask a trusted friend or family member to hold you accountable in regards to your budget. Put dates on your calendar where you check in every few days so that they can ask you how much you’ve spent on each recipient so far.

If you haven’t been keeping track as closely as you had hoped, ask your accountability partner if they’re willing to sit down with you and look at your receipts to make sure that you’re still within budget.

If necessary, ask them to keep your credit cards in a safe place for the next few weeks so that you’ll rely solely on cash (or your debit card) for your holiday gift purchases.

5.) Find some corn for poppin’ (and some movies for watching)!

If your budget is really tight, and you can’t afford to buy your spouse an Apple Watch or your best friend front row tickets to their favorite concert, there’s no shame in that whatsoever.

While it may seem in vogue to max out your credit cards for the latest gadgets, it takes a lot more wisdom and self-control to live within your means. If you’re honest with yourself and your loved ones, you’ll end up having a less stressful holiday season where you can focus on each other instead of the gifts.

This means that you can think outside of the box, and give creative gifts that can even be homemade! Does your significant other love old Christmas movies?

Find a small basket and fill it with homemade caramel popcorn, hot chocolate, and a DVD of “It’s a Wonderful Life” or “Miracle on 34th Street.” You’ll only spend $15 or $20 on the contents of the gift basket, but you can’t put a price tag on the thoughtfulness!


The holidays shouldn’t have an adverse effect on your finances, and with these five tips, you’ll be able to experience the joy of the season (and the peace of mind that comes with staying inside of your budget).

Are there other things that you would add to the list? If you’ve already implemented other tried-and-true methods for avoiding overspending during the holidays, be sure to keep up the good work!

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Lawyer

Do you have an overwhelming amount of debt? Do you need a fresh start? Let's chat!

(502) 435-2593

Need help immediately? Text or call Tracy Hirsch on her cell phone!

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