4 Huge Signs You’re Overspending on the Holidays — and How To Stop Before It’s Too Late
Written by
J. Arky
Edited by
Jenna Klaverweiden
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It’s easy to break your budget and spend a lot of money, especially around the holidays. Beyond the gift purchasing, there are travel expenses, festive meals and decorations for your home, office and car.
According to a MarketWatch Guides survey, 27% of consumers expect to take on holiday debt this year, and 12% are still paying off overdue balances from 2023. It can all add up quickly without you even realizing it is happening. For those who are worried about draining accounts or maxing out credit cards this season, there are some red flags to look for.
Here are four huge signs that you’re overspending on the holidays, as well as how to stop before it’s too late.
‘Buy Now, Pay Later’ Thinking
The first sign that you’re overspending this holiday season is having a “buy now, pay later” mindset when making purchases. This could be a reliance on credit cards or “buy now, pay later” loans, according to Lindsey Crossmier, financial expert at MarketWatch Guides.
“If you don’t have cash on hand or have no intention to pay off your full credit card balance after December, pace yourself and set a reasonable budget,” Crossmier said.
Impulse Buying
Impulse buying is another key sign that you’re overspending. “Impulse purchases occur when you go off plan and make sudden, off-track purchases,” said Rod Griffin, senior director of public education and advocacy at Experian. “If you do this too often, or at too high a cost, you can quickly overspend and rack up debt.”
Impulse buying is common around the holidays due to all of the sales going on, which can pressure shoppers. “During the holidays, you have Black Friday specials and are bombarded with sale flyers and social media ads trying to get you to buy, buy, buy,” said Cynthia Campos Delgado, a financial advisor and founder of Campos Wealth Management. “The flash sales with limited hours to buy pressure you to believe if you don’t buy now, you will miss out. Don’t fall for the gimmicks because this is not the only time there will be sales.”
Taking Money From Other Accounts
“Dipping into savings to buy gifts or fund holiday travel is another sign of overspending,” Crossmier said. “Savings are typically set aside for big-ticket purchases or emergencies, and if you haven’t already set aside money to fund your holiday purchases, you may be in overspending territory.”
It’s easy to make impulsive purchases for your loved ones, Crossmier explained, but setting a detailed holiday budget, using cash or debit when possible, and shopping on savings days can help you beat the overspending bug.
Using Credit Cards for Everything
Be wary of using credit cards for every purchase, as that could mean you’re in overspending territory. “You must recognize racking up credit card debt is taking a step backwards,” Delgado explained. She advised going back to the basics and determining whether you have the cash to pay for each gift.
“Don’t let all the ads and special holiday sales win by getting you to spend under the false idea you are saving because the intended benefit of the sale price will likely be eaten up by the double-digit interest rate the charge card company will add to the newly acquired debt,” Delgado said. “If you’re using a credit card, ensure you can pay it off at the end of the statement period.”
Ways To Stop Overspending
For those who have found themselves overspending this holiday season, it’s not too late to turn it around. Here are a few key ways to stop overspending.
Make a List
And check it twice. Does everyone on it need a gift? “First, before anything, decide how many people you intend to give a gift,” Delgado said.
“Be like Santa Claus,” Griffin said. “Make a list and check it twice. Don’t deviate from the list once you’ve created it, and you’ll be better equipped to stay on track and avoid costly, unplanned purchases.”
Make a Budget
Delgado advised shoppers to go through their budget and savings in order to determine how much should be spent on each person. “Give yourself a stated cap or max budget to spend on each gift,” she said.
“You may want to talk with your friends and family to set gift expectations from the start so you’ll feel less pressure to overdo it,” Griffin explained. “It’s also a good idea to make a list and rank what is most important to you so you can still enjoy some of your favorite activities and experiences without setting yourself back financially.”
Be Strategic With Your Shopping
Overspending can be tempting, especially during the holidays. That’s why it’s important to be strategic with your shopping and always have a plan.
“Remind yourself the purpose of the sale is to reel you in and get you to spend your money on the product,” Delgado said. “Instead, decide who you are buying for, how much you will spend per person and then stick to the plan. This one season is not the only time there will be sales. Don’t fall for the pressure tactic to buy now. Take your time to research who has the best price.”
Remind Yourself What Really Matters
The idea of a gift is to let the person know they are special to you and that you care, Delgado explained.
“Consider spending time on an experience or outing with them,” she said. “Not everything has to be a physical gift wrapped under the tree. Are there more gifts than space for the gifts? Maybe consider one meaningful or thoughtful gift per person and don’t get carried away in buying multiple gifts for each person.”
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