7 Money Moves To Make Today If You’re Worried About Holiday Expenses
Written by
Martin Dasko
Edited by
Zuri Anderson
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According to Thrivent’s 2024 Holiday Spending Survey, 27% of Americans are very concerned about their holiday finances this year, with two out of every three having expressed some concerns.
While the level of financial concerns seems to vary, the one consensus is that holiday spending can be daunting if you’re not prepared for it. It’s understandable if you’re stressed about holiday expenses because consumers have had to deal with stubborn inflation and higher interest rates for the last few years.
Here are seven money moves to make today if you’re worried about holiday expenses.
1. Set a Holiday Budget
“Break your budget into specific categories like gifts, meals and travel, to assign a dollar amount to each,” said Ali Hashemian, a certified financial planner (CFP) and president of Kinetic Financial. “Once you have your plan, track your spending closely using a budgeting app or even a simple spreadsheet.”
The experts GOBankingRates spoke with agreed that setting a holiday budget is important if you’re worried about expenses this season. The best starting point is to review what you spent last year to get a rough idea of what you may spend this year.
“Organizing your finances ahead of holiday shopping is critical for maintaining control over your spending,” Hashemian added. “When you go into the season with a clear plan, you’re far less likely to overspend or rely on credit to cover expenses.”
As is often the case when it comes to financial issues, you want to spend some energy and time on preparation so that you’re not shocked when your credit card bill arrives in 2025.
2. Monitor Credit Card Usage
Richard Barrington, a financial analyst for Credit Sesame, warned about getting carried away with your credit card.
“Aim to stick to the 30% rule (keeping your total credit card balance under 30% of your credit limit),” he said. “Since credit utilization is one of the biggest factors that impact your credit score, you may see your credit score drop if you accrue a higher balance.”
If you’re concerned about holiday spending this year, the first step is to review your credit card balances to see your financial shape. If you don’t monitor your credit card usage closely, you could easily get carried away, leading to additional issues.
3. Watch Out for Retail Store Cards
“Retail stores may try to lure you to sign up for their credit card usually by offering you a major discount on your purchase,” remarked Barrington. “In general, the credit limit is often low, making it challenging to purchase several items or one big item because you can quickly find yourself over the 30% mark.”
While you’re shopping this holiday season, you’ll want to avoid the temptation to sign up for new credit cards, even when they try to incentivize you with gifts. You don’t want to start 2025 with more credit cards than required.
It’s essential that you stay proactive about your credit and spending during the holidays this year as financial worries grow.
4. Try To Avoid Buy Now, Pay Later Programs
While these programs may seem convenient, they come with significant risks.
“These plans can encourage overspending because the immediate cost appears manageable, Hashemian elaborated. “However, juggling multiple installment plans can strain your budget, and missing a payment often results in substantial fees and penalties.”
Your financial issues could get much worse if you end up purchasing major gifts for which you don’t have the funds set aside. You want to ensure that you have a budget so that you have a spending plan that you can follow instead of getting stuck with expenses in 2025.
5. Set Spending Limits
The holidays are about making memories, not about getting into debt. Hashemian suggested that you communicate openly with friends and family about spending limits.
When everyone is on the same page, it removes the pressure to overspend, especially when you’re entering the season stressed about your budget. This is one of the best financial moves you can make this holiday season because you don’t want to put unnecessary financial pressure on yourself.
6. Save Money on Gifts
“Give experiences rather than physical gifts,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com. “Tickets for admission to local attractions or events can be less expensive than other types of gifts and can be used to create fun memories that outlast other items.”
If you’re worried about holiday expenses, you’ll want to find ways to save money on gifts so that you don’t get into credit card debt. You can also consider re-gifting by looking through your unused gifts around the house.
The goal is to find ways to save money on gifts so that you don’t go over your budget in an attempt to get something for everyone in your life.
7. Make Wise Year-End Financial Decisions
With the year coming to a close, you want to ensure you’re still making wise financial decisions.
“Maximize contributions to tax-advantaged accounts like 401(k)s or IRAs. Not only does this help reduce your taxable income, but it also sets you up for long-term financial success,” Hashemian suggested.
Review your investment accounts and make certain moves to alleviate financial concerns heading into 2025 to finish 2024 strong.
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