Don’t Let the Holidays Ruin Your Financial Recovery — How To Stay on Track During This Time of Spending

Christmas sales.
Svetlana-Cherruty / Getty Images/iStockphoto

Last year, there was a black cloud hanging over the holidays as businesses struggled to stay open and consumers were still reeling from job loss and health concerns.

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But now, things are looking up. Even though this holiday season comes with a host of unique challenges, the economy is on its way to recovery and people are ready to celebrate with their wallets. A recent survey from Marcus by Goldman Sachs found that 45% of Americans will spend more on gifts this holiday season than they did in 2020. However, 1 in 5 respondents said it’s very likely they will spend more money than they’d like.

Even though it can be tempting to overspend during the holidays, you don’t want to undo all the progress you’ve made in 2021. So here are some ways to keep your spending in check without sacrificing any holiday cheer.

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Keep It Separated

If you’ve been saving all year for holiday expenses, it’s a good idea to set those funds aside in a separate account. “It is vital to keep your specific saving goals separate from daily expenses and your larger savings to help keep you on track,” said Sue Zhou, personal finance expert with savings app Digit. Otherwise, you may be tempted to dip into those savings to cover other spending, then end up going over budget or racking up debt later.

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Helpful Info: How To Resist the Temptation of Overspending During the Holidays

Track Your Spending

Once you’ve set your holiday budget limit, it’s important to keep track of your spending. Zhou said this can be done manually or with using a savings app such as Digit, Mint, etc. Check in periodically to make sure you’re on track and adjust your budget if needed.

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Shop Online

If you’re prone to impulse purchases, shopping online can help you avoid facing tempting items while you wait to check out in person. Plus, it requires you to find specific products rather than browsing aisles. “Browsing less means you’ll be less likely to find items to add to your cart, which means you’ll be able to stick to your budget easier,” said Julie Ramhold, consumer analyst with

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Be Wary of ‘Buy Now, Pay Later’

Companies such as Affirm and Quadpay allow you to spread the cost of your cart out over time without interest — as long as you make your payments on time. That can be a good strategy for avoiding credit card debt if you plan well. On the other hand, it can be an easy way to get in over your head. “Only use these short term credit solutions if you know you will be able to pay off the payments on time, otherwise you’ll be hit with unexpected fees,” Zhou said. “If you do choose to go this route, set up automatic payments or set calendar reminders for yourself to ensure you make every payment on time.”

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Skip the Free Shipping Threshold

Many retailers offer free shipping to entice shoppers to spend more. And of course, “free shipping” sounds better than having to pay $7 for it. “But the truth is that if you aren’t planning to meet that threshold anyway, it’s not worth it,” Ramhold said. “If you’re only buying one or two items, just go ahead and pay for shipping — trying to meet the minimum threshold is just going to cause you to overspend and buy items you didn’t intend to buy in the first place.”

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Choose Experiences Over Material Items

Consider getting creative with gifts that won’t break the bank and may even be more appreciated by friends and family. Zhou suggested gifting experiences such as a virtual wine tasting or local Airbnb experience, and sentimental items such as framed artwork, photos or a personalized note.

Read: The Ultimate Holiday Etiquette Gift Guide

Stick To Smaller Gatherings

If possible, Ramhold recommended planning your holiday dinners with a VIP list in mind and keeping it as small as you can. “Doing so will mean less stress for you if you’re hosting and cooking all the items, but also will ensure you spend less having to feed fewer people,” she said.

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