Skip to content
  • Home
  • Essentials
        • ESSENTIALS
        • Goals and Budgeting
          • Overview
          • Organizing Your Financial Life
          • Budgeting
          • Your Personal Net Worth
          • Setting Goals
          • Financial Planning
          • Planning Your Charitable Giving
        • Credit and Debit
          • Overview
          • Good Debt versus Bad Debt
          • How Credit Can Help—and Hurt
          • Understanding Your Credit Score
          • Preventing Identity Theft
          • Paying Off Student Debt
        • Estate Planning
          • Overview
          • Estate Plan Basics
          • Creating an Estate Plan
        • Types of Accounts
          • Overview
          • Choosing the Right Accounts
          • Individual Retirement Accounts
          • Employer Sponsored Retirement Accounts
          • Small Business Retirement Accounts
          • College Savings Accounts
          • Custodial Accounts
          • Understanding FDIC and SIPC Insurance
        • Saving
          • Overview
          • Why You Should Save and How Much
          • Making the Most of Your Paycheck
          • Saving for an Emergency
          • Eight Savings Fundamentals
        • Investing
          • Overview
          • Getting Started with Investing
          • Stocks, Bonds, and Cash
          • Fractional Shares
          • Socially Responsible Investing
          • Understanding Mutual Funds and ETFs
          • Creating an Investment Plan
          • Finding the Right Asset Allocation
          • The Advantages of Diversification
          • Benefits of Compound Growth
          • Tax-Smart Investing
          • The Importance of Monitoring and Rebalancing
        • Taxes
          • Overview
          • Income Taxes
          • Income Taxes for Children
          • Calculate Taxes
          • Payroll Taxes
        • Insurance
          • Overview
          • Insurance You Need
          • Individual Health Insurance
          • Group Health Insurance
          • Understanding Medicare
          • Disability Insurance
          • Life Insurance
          • Long-Term Care Insurance
          • Auto Insurance
  • My Life
        • MY LIFE
        • STARTING OUT
        • BUYING A CAR
        • MILITARY COMMUNITY
        • Buying a Home
          • Overview
          • Buy or Rent?
          • How Much House Can You Afford?
          • Mortgage Basics
          • Beyond Mortgage Costs
        • Jobs
          • Overview
          • Changing Jobs
          • What to Do If You Lose Your Job
          • Managing Your Finances as You Change Jobs
          • Protecting Your 401(k)
        • Getting Married
          • Overview
          • Planning and Paying for a Wedding
          • Marrying Your Finances
          • Prenups: Do You Need One?
        • Starting a Family
          • Overview
          • Budgeting for a Child
          • Insurance and Estate Planning Needs
          • Planning for a Child's Education
        • Divorce
          • Overview
          • Preparing Your Finances for Divorce
          • Protecting Yourself During a Divorce
          • Managing Money After a Divorce
        • Helping Aging Parents
          • Overview
          • Talking Money with Aging Parents
          • Insurance Needs
          • Managing Income and Investments
          • Knowing Their Wishes
          • Social Services
        • Losing a Loved One
          • Overview
          • Handling Finances After Loss
          • Special Guidelines for Loss of a Spouse
        • Retirement
          • Overview
          • Starting Retirement
          • Nearing Retirement
          • Enjoying Retirement
  • Money Talk
        • MONEY TALK
        • Planning & Goals
        • Investing Basics
        • Insurance
        • Education Savings
        • Couples & Families
        • Kids & Teens
        • Estate
        • Retirement
        • Major Purchases
        • Banking, Credit & Debt
        • Budgeting & Saving
        • Taxes
        • About Money Talk
  • Teaching Kids
        • TEACHING KIDS
        • Basics
          • Overview
          • Rules of the Road at Every Age
          • Budgeting
        • Saving
          • Overview
          • Starting the Savings Habit
          • Motivating Your Kids to Save
          • Tips for Parents with Kids and Teens
        • Investing
          • Overview
          • Introducing Kids to Investing
          • Important Investing Concepts
          • Benefits of Early Investing
          • Investment Accounts for Kids
        • Giving Back
        • Life Lessons
          • Overview
          • Tips for Financial Success
          • Managing an Allowance
          • Help Teens use Credit Wisely
        • Buying a Car
          • Overview
          • Your Teen's First Car
          • Assessing Your Teens Needs and Budget
          • Cash or Financing?
          • Auto Insurance
        • First Job
          • Overview
          • Your Teen's First Job
          • Income Tax Basics
          • Payroll Tax Basics
          • Getting Serious About Saving
        • Going to College
          • Overview
          • Costs Beyond Tuition
          • Life Away from Home
        • Leaving the Nest
          • Overview
          • A Checklist for Leaving Home
        • Activities and Resources
          • Overview
          • Overview
        • Categories
          • Overview
          • Classroom Curriculum
        • Age Groups
          • Overview
          • Elementary School
          • Middle School
          • High School
  • Teen Academy
        • GOALS AND BUDGETING
          • Overview
          • Dream Big, Save Smart: How to Set Money Goals
          • Who Needs a Budget? Well, Everyone—Even You!
          • Spending Reality Check: Do You Need It or Just Want It?
        • JOBS
          • Overview
          • Got Your First Job? Understand Your Paycheck
        • CREDIT AND DEBT
          • Overview
          • Spend Smart: How to Use a Credit Card the Right Way
        • COLLEGE
          • Overview
          • Financial Aid 101: How to Pay for College
        • INVESTING
          • Overview
          • This Cool Investing Feature Is the Key to Reaching Your Goals
          • How to Invest Like a Boss—As a Teen
  • Tools & Resources
        • TOOLS AND RESOURCES
        • Worksheets
        • Calculators
        • Spending Tracker
        • Monthly Budget Planner
        • Financial Fitness Quiz
        • Documents and Forms
          • Overview
          • Form W-4
          • Form W-2
          • Form 1099
        • Financial Glossary
  • Foundation
      • FOUNDATION
      • Moneywise America
Search

Unwrap a New Approach to Holiday Spending

December 15, 2023 Patrick Means
Consider these nine ideas to help you take control of holiday spending and avoid a financial hangover in the New Year.

'Tis that time of year. Holiday spirit is back in season. Americans plan to open their wallets wide and spend an average $1,652 on the holidays this year, according to a 2023 Deloitte survey. Now, I'm no Grinch. But at this point in my life, holiday spending has become a non-event for me. It wasn't always that way, however.

When I was in my early 20s, I was that person going to the big box stores and getting caught up in the sales. One year, I remember thinking, "Oh, this sounds like a great deal," and I bought an expensive video camera on Black Friday. I even opened one of those store credit cards, not realizing back then what opening a new card does to your credit score (typically lowers it). I ended up losing that camera several months later. Imagine how ticked I was to be paying interest on that camera—something I had lost, wasn't using, and the purchase of which dinged my credit—for months afterward.

Today, I'm over the whole drama of chasing Black Friday deals, and that's a good thing. Instead, it's about the experience of seeing my son and fiancée open their gifts and the joy and happiness on their faces. As you prepare for the holidays, consider these nine ideas to help you take control of your spending and help prevent a financial hangover in the New Year.

1. Create a separate fund for holiday spending.

When you save for a down payment on a house, for retirement, or your kids' college education, you set aside funds in a special account. In that same way, consider creating a separate fund for holiday spending. This is a miss for many folks. We don't treat holiday spending the same way and we should. You have a whole year to plan for this. Get into the mindset of creating a goal and saving in a holiday spending fund. You could set aside $100 a month starting in January in a special account. Whatever you decide, create a systematic plan to get to your number, and then follow it.

2. Set a budget.

Call me boring, but I make a budget and stick to it. Let's say my holiday spending budget is $1,000. My fiancée gets a piece, my five-year old son gets a piece, and extended family gets a piece. I also factor in gift wrap, tape, holiday decorations, and postage—these are all a separate line item. Holiday spending includes all of the above.

3. Don't get sucked into the impulse-buy trap.

It's easy to walk into a store and buy things on impulse. When I go to Costco, my fiancée has to stop me from buying things I don't need. Try to avoid being tempted by deals you see in store or online. Just because something is a good deal, doesn't mean you need it or have the budget for it. To help stay disciplined, make a list for everyone you plan to buy a gift for and follow it. I'm a big fan of online wish lists. It's like a family registry for gifts. It helps you avoid the trap of all the "deals" in the stores, which can lead to impulse buys.

4. Don't go into debt to pay for gifts.

In 2022, 35% of Americans took on holiday debt, with the average amount standing at $1,549, according to LendingTree. Ouch. Have you looked at the interest rate your credit card company charges you lately? Some credit card interest rates top 20% now, which means a holiday debt hangover in January could be rough. Only spend what you've got. If you have been putting a little bit of money away, just spend that. It's a great best practice to avoid borrowing for this time of year, which leads me to the next mistake.

5. Don't get lured into "Buy Now, Pay Later" offers.

The "Buy Now, Pay Later" industry has exploded in recent years, with a near tenfold increase in loans since 2019, according to the Consumer Financial Protection Bureau. These plans let you make a purchase, get it now, and pay for it over time with a series of installment payments.

So, here's the deal: If you are taking advantage of a buy now, pay later offer, it means you probably don't have the money right now. What happens if the car breaks down in three months and you get derailed paying it off? Some of these offers come with interest and late fees, which can add up. Again, only spend what you've got.

6. Don't try to buy gifts for everyone.

Early on as my extended family grew, I tried to buy gifts for everyone, including all my nieces and nephews and in-laws. But the family just kept expanding. Now, everyone puts their name on a list, and we all pick a name and buy one gift. It creates an experience where everyone can get a special gift, we all save money, and it's so meaningful. Now, outside of my immediate family, I buy just one gift for extended family.

7. Don't buy more online just to get the free shipping.

Have you ever topped off your online shopping cart with another purchase just to get the free shipping? Stick to your list. Need I say more?

8. Girl math and boy math: do the other side of the equation.

You may have heard of the 'Girl Math' and 'Boy Math' trends popularized on social media lately. It involves clever ways of justifying more purchases including ideas like: a refund is free money, anything under $5 is free, or if you find something on sale for $50 that originally sold for $100—then you just made $50.

Listen, I love that people are doing the math. But consider this: What if you took that $50 and invested it? What is the opportunity cost if you spend the $50? I would love to see people do the same amount of math with a compound savings calculator. I challenge you to do the other side of the equation.

9. Get creative—some of the best gifts are free.

Gifts don't need to be bought. To me, the holiday season is not about the biggest gift, it's about the moment we see someone else excited. Consider gifting your time: do an activity together, make a meal for someone, gift a night of babysitting so a couple can have a date night. Or consider taking your loved ones to fun holiday destinations in your area, like the Trail of Lights in Austin, Rockefeller Center in New York, or the Arboretum here in Dallas. These experiences are often cheaper than gifts, and making holiday memories together could be more meaningful.

Enjoy the moment without future financial regret.

Give yourself a gift by not overextending yourself financially this holiday season. These small adjustments can help give you financial peace of mind, and in my book that's something to celebrate.

Next Steps:

  • Use a compound savings calculator.
  • Explore more personal finance topics.
  • Follow Schwab Moneywise® on Instagram.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

1123-3KZM
  • About the Foundation
    • Foundation
    • Moneywise America
  • Money Talk
    • Money Talk
    • Planning & Goals
    • Investing Basics
    • Insurance
    • Education Savings
    • Couples and Families
    • Kids and Teens
    • Estate
    • Retirement
    • Major Purchases
    • Banking, Credit & Debt
    • Budgeting & Saving
    • Taxes
    • About Money Talk
  • Essentials
  • My Life
  • Teaching Kids
  • Tools and Resources

This information on this website is for educational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

Charles Schwab Foundation is a 501(c)(3) nonprofit, private foundation funded by The Charles Schwab Corporation. It is not part of Charles Schwab & Co., Inc. or its parent company, The Charles Schwab Corporation.

© 2025 Charles Schwab & Co., Inc. ("Schwab"). All rights reserved. Member SIPC.

(0624-1EZE)