Tips & Tricks to Not Overspend This Holiday Season
How to Manage Financial Anxiety and Not Fall Into Pressures to Keep Up With Spending Around You
Written By: Haley Moore
The holidays can often bring lots of fun - meals with family and friends, work parties, and holiday markets galore - and with that a lot of financial obligation. With big SALE signs on every window, pressure to meet the expectations of everyone on your buy-for list, and lots of events requiring you to bring your favourite dip or dessert, it can really start to add up when you’re not looking! Financial anxiety is an emotional state that is impacted by your spending habits (or lack there-of). Whether your traditions include spending extra money this time of the year or not, it can always be helpful to have a few more tools in your tool belt to keep you on track with spending as we move into the new year. Don’t let yourself dig a hole that you’ll have to spend the first few months of 2025 trying to (anxiously) undo.
Redefine What the Holidays Mean to You
Before we talk about money at all, we first want you to take a big step back and reflect on what the holiday season really means to you. Consider what you celebrate and why. Reflect on your favourite memories of the holidays and notice the patterns within them - your memories likely focus on traditions, connection, and experiences, not on how much money was spent. Consider changing your own traditions and challenge yourself to think outside of the big box store parameters. New traditions could surround donations to good causes instead of presents, volunteering your time as a family or friend group, or even going out for dinner instead of having the pressure to host put on one person/family. Sometimes the best way to invest your energy is getting outside of the confines of what we consider to be the norm altogether! If you’d still like to spend some money this year, however, the rest of the article can give you some pointers.
Reflect on Your Money Mindset
It’s helpful to consider your relationship with money and the types of beliefs you hold about money prior to setting a holiday budget. If you are stuck in a scarcity mindset where there’s never enough money, you’re likely to either overspend (because there’s no use trying to be financially stable) or underspend (because you need to see the money in the bank or it might never be there ever again). If you’ve instead had an upbringing that showcased the most expensive item as the markers of success, your money scripts may follow along those lines too - “If I can show my success with buying the newest x, then people will know I’ve made it!”. Once you’ve noticed the mindset(s) you often fall into around money, try to challenge that thinking style. Consider talking with a therapist or professional to start rewriting your money mindset scripts if you’re finding it hard to challenge them on your own.
Make a Budget BEFORE You Start Spending
Take a look at your finances and decide beforehand how much you are willing to part with in the coming month. If you’ve already started spending, account for that too! Notice how much you have to work with before you start dipping into savings (or credit card debt) and decide ahead of time how much you realistically think you could spend without being stretched too thin. Of course if you have a higher risk tolerance or are more comfortable carrying a bit of credit card debt, this factors in too, but make sure you are aware of your money situation prior to jumping in with your purchases! It may be helpful to talk to a financial advisor prior to making a budget if this is something new to you.
Set Goals Ahead of Time
Sit down before you start getting any presents, outfits, or baking supplies, and write out exactly what you need to get. Make a list of any items you think are necessary and divide them by category - for example by each person you are buying for or each event you are attending. Once you have a fairly exhaustive list, use the budget you created above and divide it amongst your categories. This allows you to see how far your money will actually go, and allows you to make any necessary adjustments prior to getting out your credit card.
Pro Tip: Consider talking with your friends and family about doing experience-based presents instead of physical gifts. This way, some presents can then be purchased at a later date when the activity is happening instead of in the month, and you get to make social plans for the coldest months of the year when we tend to hibernate in isolation!
Extra Pro Tip: If you have more time than money on your hands, consider making presents or gifts for some of the people on your list instead to save some money. This can also lead to more heart-felt and personalized gifts too, and can include vouchers for your time too (e.g. Babysitting vouchers for your niece and nephew so your sister gets a break or offering to mow the lawn for your parents or grandparents).
Stick to Your Decisions
It can be REALLY easy to fall for the BOGO sales, get swept up when your coworkers are buying new dresses for the work event, and feel guilty about maybe not spending as much as your friends for the gift exchange. We all know the feeling! This is where you look at the budget and your list you’ve made already and see that your plan will work, you just have to stick to it. It isn’t too late to discuss your boundaries with friends and family, have the tough conversations around spending limits, or set expectations about what you are willing to bring to an event. Honesty is hard, and you might feel some anxiety and guilt in response. You get to choose if you’d like to feel some anxiety now (by sticking to your limits) or anxiety later (by overspending now), so you have to choose which one is worse for you!
Understand the Urges for Emotional Spending
Even if you do not have much to celebrate this time of year, you can still fall prey to spending pressures. When you see or hear about others spending money on fun, cool, or exciting things, it can be easy to want to do the same. Or the emotional experiences of feeling like you’re missing out may lead you to booking that last minute vacation that you really can’t afford in the heat of the moment. These experiences are completely normal! We are social creatures, and therefore we want to be accepted and feel like we belong, which puts pressure on us to ‘keep up’ socially and financially with the people around us. If you want some help following steps 3-5, here are a few extra tips to keep you grounded:
STOP: Before spending, S(top) and take a pause. T(ake a step back). O(bserve) the situation. P(roceed mindfully) with a bit more space.
Enforce the 24 Hour Rule: To avoid impulse buying (which is an emotional response!), set the 24 hour rule in place. This means you can’t make any purchases until 24 hours after you add it to your cart or see it in a store. If you still want it the next day after a good night’s sleep, you’re free to buy it!
Window Shop First: If you’re not quite sure what you want yet, give yourself an afternoon of window shopping at the stores you’re most likely to buy from before you purchase anything. Set the expectation that you will not spend anything on that shopping trip (or online search), and that it must be purchased on a separate occasion. To take this one a little further, you can also go to the stores WITHOUT any money if this seems helpful!
Consider The Future
We hope the tips above can help you to reframe what the holidays are really about, and focus on setting yourself up for success in the future. The holidays and the end of the year already can bring so many emotions, and it’s an act of self-love to be able to prioritize your own comfort and sanity as you make room for external obligations. We wish you the best of luck in sticking with your boundaries and allowing yourself to start off the new year with the least amount of stress as possible!
*Please note that we are not financial advisors and this article is not meant to be financial advice of any kind. This article is meant for educational purposes only. If you require financial advice, please find a qualified professional to support you.
References
Jaggernath, J. (n.d.) How to Avoid a Holiday Hangover of Debt. My Money Coach. Retrieved from: https://mymoneycoach.ca/blog/paying-for-christmas-with-credit-avoiding-debt
Linehan, M. M. (2015). DBT skills training manual (2nd ed.). Guilford Press.
Martyr, J. (2024, November 26). Conquering Holiday Money Stress. Psychology Today. Retrieved from: https://www.psychologytoday.com/ca/blog/mental-wealth/202411/conquering-holiday-money-stress?amp
Ritchie, M. (2022). How to Manage Christmas and Holiday Stress. My Money Coach. Retrieved from: https://mymoneycoach.ca/blog/how-to-manage-christmas-holiday-stress
TD Bank. (2024, April 24). Loud Budgeting 101: 5 tips that could help you save money. TD Stories. Retrieved from: https://stories.td.com/ca/en/article/loud-budgeting-101