The holidays are a wonderful time to get together with friends and family and celebrate with good cheer. But it also can be a stressful period when it comes to our finances. Here are a few tips for making it through the season without spending more than you’re comfortable with.


The best way to control your holiday spending is to set a budget, and to make sure that budget includes items beyond gifts. One guideline is not to spend more than 1.5% of your annual income on seasonal gifts and related costs, but, of course, you should decide what’s best for you. If you plan to travel or entertain a lot, for example, you should include those related gas, airline tickets, hotels and food costs in your budget. Another tip is to look back at last year’s credit card bill to see if you paid it off in full in January. If you did, you might consider that your spending limit for this year.


It’s very easy to get caught up in the emotions of the season and buy more than you need. We’ve learned that our brains are hardwired to seek pleasure and avoid pain. Impulse shopping, for many people, releases endorphins that can feel like a sugar rush. Then, when the bills come due, a wave of remorse can follow.

That’s why we advise clients to make a holiday list and set limits on how much you’ll spend for each person. Remember, $50 per person may not sound like a lot on paper, but if you have 10 people on your shopping list, it quickly adds up.


Credit card companies love the holidays, and for good reason. A good chunk of their interest revenue and profits are generated by holiday spending from people who overspend and pay just the monthly minimum balance. This is an example of inefficient debt, as you wind up paying more in interest for gifts and services than you intended or budgeted.

Some folks use the “envelope” method of holiday shopping: They put all the cash they’ve allocated for the season into an envelope and stop spending when the envelope is empty. Simple, but effective. Another good idea is to use debit cards instead of credit cards, as you won’t be able to spend more than what’s in your bank account.


Although Black Friday and Cyber Monday are two of the biggest shopping days of the year, we’re not convinced that consumers get such great deals at the mall or online during this over-hyped weekend. Instead, we know some expert shoppers who keep a holiday list with them and shop for deals over the course of the year (back-to-school season in August can be a great time to buy clothes and electronics, for example, when most everyone is still enjoying summer outside).

Also, it’s really the thought that counts. Instead of paying up for a stocking stuffer that no one may remember or appreciate a year from now, think of personalized or homemade gifts that people will actually use and cherish. If you like to bake or make beer, consider gifting cookies or a batch of your homemade brew. Or for an elderly person living alone, offering to shovel snow, cut the lawn or help with painting will be highly valued.

We wish our readers a happy, stress-free holiday season and a prosperous New Year.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.