Tips to keeping holiday spending in check

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COLUMBUS, Ohio—Increased expenses that typically occur during the winter holiday season can make it hard for some consumers to avoid overspending, with many struggling to stay within normal spending limits, often taking months into the next year to pay off the resulting debt.

While this has become an annual issue for many consumers, the economic stress many faced last year due to the COVID-19 pandemic has many consumers saying this year they plan to spend more to make up for missed celebrations put on hold to prevent virus spread last year.

In fact, some 40% of consumers say that the pandemic won’t impact their spending this year, and an additional 30% of consumers say they plan to spend more this year than last year, a time when fear and uncertainty caused by the pandemic resulted in many consumers lowering their holiday budgets.

According to the 2021 Holiday Outlook by PwC, formerly Price Waterhouse Coopers, total holiday spending this year will be 20% more than last year, with the average consumer planning to spend $1,447 compared to last year’s total of $1,186. The international accounting firm’s survey of more than 1,000 consumers also found that more people plan to increase their personal spending as well.

“After a 2020 holiday season of self-deprivation, consumers plan to pamper themselves this year: They will spend an average of $442 on themselves this holiday, up 48% from 2020 and 28% from 2019,” PwC said in a written statement. “Consumers are ready to celebrate this year. They want to shop and travel and make merry after more than a year of various forms of pandemic-related abstinence.

“They’re still wary about public-health considerations in the wake of the variants. But for many, the vaccine has offered more freedom to participate in holiday activities.”

That’s why it’s so important—especially this year—that as you plan for the holidays, you make sure that you have a clear picture of where you are financially, said Emily Marrison, an Ohio State University Extension program specialist in healthy finances. OSU Extension is the outreach arm of The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES).

Already, 7 in 10 consumers say they typically overspend during the winter holidays, according to a consumer spending survey by Affirm, a California-based company that offers consumers the ability to buy now and pay later. And over half of consumers say they typically have anxiety about holiday shopping, with 41% reporting staying on budget a top concern, and 31% concerned about incurring long-term debt, the survey found.

“We all have our own money personalities—our habits and attitudes toward money,” Marrison said. “Individuals who especially value giving or being spontaneous may find it more difficult to be disciplined with spending this time of year compared to individuals who value planning and security.”

One way to be disciplined is to create a budget, a list of priorities, and then stick to it, she said.

“Check on your progress weekly, and be as honest as you can with yourself about staying true to the spending limit that you’ve set,” Marrison said. “If a gift or activity is going to exceed your budget, don’t charge it on credit. Instead, review your list and budget, and perhaps reprioritize your list.” 

Here are some other tips to help you formulate a holiday spending plan to avoid financial pitfalls:

  • Make savings automatic. Set aside a portion of your paycheck. Start saving now. Transfer to your savings a set amount of money from each paycheck.
  • Start with a list of everything you’ll be spending money on during the holidays. Include all gifts, foods, drinks, decorations, and charitable giving.
  • Set reasonable expectations. Take a look at your monthly budget, decide how much you can really spend on those holiday extras, and plan your budget accordingly.
  • To determine your holiday budget, review what you spent last year. Then, use that amount as a guide for this year. Remember to include all money spent on gifts, foods, drinks, decorations, and charitable giving.
  • Once you’ve created your budget, stick to it.
  • After your budget is made, prioritize where and how you’ll spend. Be sure to account for everything: gifts, decorations, donations, a new piece of clothing, groceries, and baking.
  • Prioritize. If you come up short, determine where you can do some trimming. Can you forgo new holiday decorations this year? Can you pledge to avoid spending money on yourself when you’re out shopping?
  • So many things about this year are nontraditional, so if your money is tighter this year than usual, think about starting new traditions that don’t require you to spend as much money. For example, instead of buying for everyone in your family, you can opt for a family gift exchange that will allow you to buy for one person instead of the whole gang. That way, everyone still gets to be involved in the holiday experience. If you need to, adopt a new tradition that requires no money spent at all, like watching a holiday movie together, baking your favorite holiday treat, or taking a festive holiday walk.
  • Keep an eye out for online and in-store deals and sales. Retailers are offering Black Friday deals over multiple weeks this year. Grocery stores often offer specials on holiday-related food items. And limit the number of shopping trips: The more you are in the stores, the greater the chance you’ll make impulse purchases.
  • Don’t wait until the last minute. That’s one of the best ways to go into debt during the holiday season. Take advantage of pre-holiday sales and free online shipping.
  • Look ahead. Now’s the time to realistically start planning for next year. Take the holiday budget you’ve set for this year—or what you wish it could be—and divide it by 12. Then, set up an automated plan to deposit that amount directly from your paycheck into a special savings account for holiday spending next year.

Finally, Marrison stresses the point about overspending and avoiding burdensome credit card debt.

“Be kind to your future self,” she said. “Purposefully set yourself up for a financially healthy start to a new year.”

More consumer tips and helpful information from CFAES experts can be found at

Tracy Turner
For more information, contact: 

Emily Marrison