7 Ways Retirees Can Avoid Overspending During the Holidays
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Overspending at the holidays is easy to do, especially if you have a long list of loved ones to shop for or enjoy hosting big gatherings. Even frugal retirees can find themselves stretched too thin if they’re not careful.
Consumer finance and debt expert Austin Kilgore, analyst with the Achieve Center for Consumer Insights, suggested several ways retirees can keep spending in check this holiday season.
1. Avoid the Common Culprits
Gifts and food are two of the biggest holiday budget-busters, Kilgore said. Without a plan and the discipline to stick to it, it’s all too easy to overspend.
“The motives might be wonderful — thinking of children, grandchildren, dear friends — but if your spending exceeds your means, you’ll end up carrying debt and stress. No friend or relative wishes that for anyone they care about,” he said.
When it comes to food, retirees often buy and cook in excess, in an effort to please every guest, or if they’re accustomed to preparing meals for larger groups.
“There is no need to buy and cook the dinner you may be used to unless you are intent on having leftovers to freeze,” Kilgore said of larger meals.
2. Stay Aware and Compare
There’s no magic way to spend less, Kilgore said, but common-sense habits go a long way. Start by setting a holiday spending budget and tracking every purchase.
“Along with giftees, include cards and postage, decorations, travel expenses and year-end tips for service providers,” he said.
Compare your itemized list to your total budget early in the season. The more time you have to make realistic adjustments, the easier it will be to avoid last-minute spending stress.
3. Choose the Right Payment Method
Some retirees find that withdrawing a set amount of cash helps limit purchases, but Kilgore said the best payment method depends on the person and the purchase.
“Credit cards can be convenient, but only when you know you can and will pay off any balance in full when the bill comes,” he said.
Credit cards are also essential for holiday travel and reservations, as they often come with travel insurance and a supportive network to dispute charges and fees. If you’ve built up credit card rewards points, the holidays can be a great time to redeem them for gifts or cash. Or you may wish to convert them into a set spend, so recipients can buy whatever makes themselves happy.
“If you have gift cards on hand, holiday purchases are an ideal way to use them before they expire,” Kilgore added.
For anyone tempted to overspend, debit cards or cash are safer choices, giving you an immediate sense of your liquidity.
4. Give What Really Matters
The gift of time is often the most meaningful, Kilgore said. Retirees can offer to babysit, make a meal for a busy family or help with errands. Maybe you can knit, bake or do woodworking.
“Think about your skills and abilities, knowing that even the simplest can be appreciated, and how you can gift those to the people you love,” he said.
5. Communicate Expectations
“Most people really want the holidays to be primarily about spending time, not money, with loved ones, relaxing and, for many, taking part in the religious aspects,” Kilgore said. “When talking with family members, focus on what you’d like the holiday to be about instead of just how you want to cut back on spending or activities,” he explained. “It may be that you want to do things together, take part in a community activity or just take some time to relax.”
Before shopping or planning events, discuss goals with family and friends. Discuss with your family about what’s most important, from entertaining to setting gift parameters, so that no one feels pressured to take on expenses or run short on time — but also to ensure everyone enjoys the holiday experience they want.
6. Make Small Changes
Kilgore advised suggesting small changes to help reduce costs without sacrificing fun. For instance, instead of serving an elaborate meal with every possible dish, plan something simple and enjoyable, then add a family activity like a board game or a group walk.
7. Set Realistic Goals
Ultimately, Kilgore said, it’s important to set goals that reflect your needs and priorities.
“Take time to decide and talk about the kind of holiday you really want,” he said. “Chances are that it’s one that doesn’t deplete your savings and cause financial stress.”
Spend according to the budget you set and plan time for free or low-cost activities you enjoy.
Retirees don’t have to sacrifice joy to stay financially healthy during the holidays. A thoughtful budget, clear communication and a focus on what matters most can help make the season both memorable and affordable.
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