Unsplash / Heidi Sandstrom

Quick notes:

  • 51% of Americans say they typically overspend around the holidays.
  • Don’t give in to upsells, which are usually designed to get you to spend more money unnecessarily. 
  • You’re better off paying for gifts with cash or a debit card than a credit card when it comes to curbing your spending.

Tens of millions of Americans enjoy the holidays, and why not?

After all, nothing says nirvana like homemade eggnog, Yukon Cornelius, and Christmas butterballs, winged and otherwise.

Unfortunately, many holiday revelers take Christmas to extreme financial measures, threatening their household budgets and paving the way for January credit card bills that induce sticker shock in even the most battle-hardened yuletide consumer.

Chances are, you know a hardcore holiday spender, among your family, friends, coworkers, or even from that familiar face staring back at you in the mirror.

According to a 2018 survey from NerdWallet, 51% of Americans admit to “typically overspending” around the holidays.

Additionally, a whopping 39.4 million holiday shoppers admit to still paying off 2017 holiday spending debts after Black Friday 2018.

8 financial decisions that holiday shoppers make — and will regret

What mistakes are U.S. adults making to accumulate so many financial headaches from holiday spending? Plenty, it turns out.

From “over-gifting” to buying an engagement ring at a huge financial disadvantage, here are eight toxic holiday consumer spending moves that even the Grinch would dislike.

Being overly generous. When facing a gift-oriented purchasing decision, take a step back and ask yourself why you’re making that purchase, says one financial expert.

“All too often, consumers end up with holiday gift-giving regret because they made a purchase decision with the ulterior motive of validating a relationship,” says Ben Huber, cofounder of, a personal finance online platform. “This sets you up for disappointment when no gift is given in return, or there is no perceived equity in the size of the gift.”

Instead, go into the holiday season with the mindset that it’s not financially wise to purchase a gift for every acquaintance you know. “It’s best to prioritize those gift recipients who mean the most to you and give without the expectation of return,” Huber says.

Giving in to upsells. Big data is more accessible to companies than ever before — and it has changed the way businesses market products to consumers.

“Companies know, thanks to a treasure chest of data now available to them, that if they can get consumers to relent on product upsells or frivolous warranties, they’re significantly padding their bottom line at the expense of those consumers,” Huber states. “An aggressive stream of in-person sales tactics or a relentless campaign of interest-based advertising is focused solely on getting consumers to start at one price point, and check out at an entirely different one — one significantly higher than you first intended.”

Armed with a healthy dose of skepticism, consumers can save big dollars when holiday shopping by merely foregoing upsells that may or may not add much value to the product being considered, Huber advises.

Maxing out credit cards. You never want to get close to maxing out your credit card to purchase gift items during the holidays.

“Unfortunately, consumers do so because it’s the one time of year when they get to impress friends and family with a kind gesture,” says Deborah Sawyerr, a financial literacy educator at U.K.-based Sawyerr House. Sawyerr advises using extra precaution when using a credit card, and tracking your spending if you use a credit card.

In fact, don’t use credit cards at all. Studies show that when you shop with a credit card, you spend more money than you would if using cash or a debit card, says Randall Yates, chief executive officer at The Lenders Network, an online loan comparison website. “With the high-interest rates that come with most cards you could be stuck paying much more than you can afford,” Yates says. “Instead, stick to cash, or your debit card. If you can’t afford to pay cash for your gifts then it’s probably not a good idea financially to do so.”

Yates says that if you absolutely have to use a credit card to buy your gifts, apply for a credit card with a zero-interest introductory period — usually between six and 18 months. “Just be sure not to spend more than you can pay back within the zero-interest period,” he advises.

Not having a budget. This mistake is both one of the easiest to avoid but also one of the more common holiday spending mistakes people make, says Nathan Wade, managing editor at WealthFit, a personal finance website that focuses on consumers and debt.

“Your finances will be all over the place if you don’t have a set budget in place,” Wade says. “Use a spreadsheet or a budgeting app (like Mint, Simple, or Goodbudget) and plan out how much you’re willing to spend on holiday gifts, decorations, and other expenses.”

Getting lax on personal data security. Thanksgiving and Christmas are active periods for identity thieves, and holiday shoppers need to take notice — but all too often they don’t do that.

“During the holiday season, it gets hectic and you may be more than willing to provide personally identifiable information (PII) to get the best deals possible,” Wade notes. “Avoid putting your identity at risk and protect your personal information. Keep a lookout of your bank account activity and monitor your credit during the holidays.”

Buying an engagement ring. Waiting until the holidays to buy an engagement ring — or any expensive piece of jewelry — is a big no-no.

“The simple fact is that diamonds and precious metals are a commodity and have a value assigned to them in the market,” says Dan Moran, diamond expert and founder of Concierge Diamonds in Los Angeles, California. “If someone is offering you jewelry at 50% off or a ‘Get It While It Lasts’ Black Friday deal, take a pass.”

“The reality is that the engagement ring, or diamond earrings or whatever they are selling were overpriced to begin with, or they’re of terrible quality and the store is having a hard time moving the items so they slash prices to the bone,” Moran says. “Don’t be tricked into buying someone else’s garbage and think you’re getting the steal of a lifetime.”

Waiting until the last minute to shop. “The biggest mistake that people make regarding holiday spending is to wait until close to Christmas to do their shopping,” says Mike Greig, a personal finance blogger at “The fact is, there are great deals on all year round. By making a list early in the year, and buying presents throughout the year, you can take advantage of more sales and also spread out your spending over several months, rather than a big amount all at once.”

Devalue money around Christmas and spend like a wise man

Above all, don’t equate money with a great holiday experience. While you’ll surely need some extra cash to accommodate the unique demands of the holidays, place a firm limit on spending so you don’t ruin the household budget.

“There’s really no need to spend a lot of money to have maximum impact at Christmastime,” says Frances Vidakovic, a financial book author and blogger at “When people say it’s the thought that counts, it’s all about understanding the little things that still mean a lot and feel priceless without the huge price attached to it.”

For example, a framed photograph of a long-lost photo can mean more to your parents than a $100 gift basket of goodies they aren’t really interested in consuming, Vidakovic says.

“A homemade gift voucher pack with massages, cleaning, and free babysitting can mean more to an exhausted frazzled mom than a $200 piece of jewelry,” Vidakovic adds. “It does take imagination to think outside the box, but the biggest financial mistake people make is assuming they need to spend a lot to give wonderful gifts, when the contrary is actually true.”

A deeper dive — Related reading on the 101:

Learn how you can save money AFTER the holidays too!

Don’t just save money yourself this holiday season, teach the kids money hacks too!

It’s a Christmas miracle!