Unwrapping the truth: why holiday spending skyrockets

By Jackie Lam

Reviewed by Kimberly Rotter

Dec 12, 2023

Read time: 2 min

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Do you suffer from a case of temporary spending amnesia during the holidays? You plan to make a budget, but your good intentions fly out the window between Black Friday and your favorite day-after-Christmas sales?

I’m just like you. And so are a lot of other American consumers. Most, in fact. A recent survey reveals that just about everyone—96% of consumers polled—plans on overspending this holiday season. It's not hard to do, especially this year. With inflation rearing its head, everything costs more.

Put these common reasons for overspending on your radar, along with tips for heading off that January post-holiday spending hangover.

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Reason 1: Keeping up with the Joneses 

Maybe you’ve just gotta have it. Or maybe you're vying for your clan's Sweetest Saint Nick award. In the digital age, it’s easy to notice what other people have and want it (it’s easy to be influenced right into debt). Especially if you have peers who are shelling out dough on fancy gadgets, the latest game consoles, and shimmery jewelry for their loved ones.

Do this instead: 

Sure, the holidays only come once a year. But you know what? Displaying your love can be a 365-day practice. Spending a pretty penny on lavish gifts for your loved ones doesn’t prove how much you care about them. Life isn't a spending competition. Set a budget for each person on your gift list, and stick to it. That also goes for holiday gatherings and festive attire.

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Reason 2: Lack of planning 

Waiting until the 11th hour to book travel or load up on presents might be your M.O., but it'll do some damage to your pocketbook. 

Do this instead: 

Book your travel in advance, and stay on budget while traveling. Spread out your purchases for presents throughout the year, or at least between July and December.

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Reason 3: The thrill of the deal

Frugal fanatics and deal hunters can relate to getting excited by an amazing limited-time deal…only to wonder later how you fell for buying stuff you don't actually need. Ironically, you can go broke saving money.  

Do this instead: 

Avoid impulse buying that’s not backed up by a plan. Whether it's Black Friday, Cyber Monday, or last-minute holiday specials, ask yourself the following:  

  • Do I really need this?

  • If I'm buying this as a gift for someone, is it within my gift budget? 

  • Is this something that I need to get now, or can it wait? 

  • Can I afford to pay for it in cash? 

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Reason 4: Emotional spending 

Feeling sad, bored, or a bit isolated? If you're trying to cure a case of the holiday blues with a dose of retail therapy, your likely result is a thinner wallet, a deeper debt hole, and even lower feelings come the new year. It's not uncommon to go click-happy and engage in a mini splurge when sitting at your computer for hours on end. Shopping when bored or lonely is a thing.

Do this instead: 

If you're wallowing, get off your devices and avoid stepping foot inside a store. Go for a stroll around the neighborhood, visit with a friend, or sign up to volunteer at a local charity with a mission you care about. 

New Year, new you

To overspend over the holidays is to be human. Don’t knock yourself. It's really easy to burn a hole in your pocketbook on gifts, travel, and other end-of-year expenses. 

Take this holiday season with a mindful approach and create a spending plan you’ll feel satisfied with. Kick overspending to the curb. You’ll level up your financial prowess and avoid that January burnout.

Jackie Lam - Author

Jackie is an Achieve contributor. She is an accredited financial coach (AFC®) who has written for Business Insider, BuzzFeed, CNET, USA Today's Blueprint, and others. She coaches artists and freelancers.

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Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

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