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5 Ways to Avoid a Financial Holiday Hangover

By Sarah Carlson, CFP®, CLU®, ChFC®

A financial holiday hangover is an unpleasant experience that will linger for weeks and possibly months. This time of year is when many Americans lose financial control. Being strapped for cash is not how you want to end the year and begin the upcoming new year. 

Wondering how you can play Santa this year without going broke? Check out these 5 tips to help create a holiday budget and keep gift spending on track.

Avoid a financial holiday hangover

1. Analyze Your Debt

Budgeting is one of the best ways to be able to give the gifts you want to your family and friends, without drowning yourself in debt. First, figure out how much you can spend.

  • Consider how much you can afford: think about what monthly bills already come out of your pocket like utilities and rent, and what is feasible to spend for you and your family.
  • Start setting aside money for next year: If you started saving in January, setting aside $50 will net you $600 to spend around the holidays. $100 a month = $1200.
    • Another trick is selecting the “cash back” option every time you go to a store that allows you to, such as when grocery shopping - $20 stashed away here and there will add up fast for holiday gift giving!

Skip a financial holiday hangover by creating guidelines

2. Develop Gift Guidelines

Make a commitment to spend a certain amount per person or child and stick to it!

  • Create a cash budget: Once you have an idea on how much to spend per person, try taking cash with you shopping instead of putting gifts on a credit card. That way, you have more of a tangible idea of what you are spending and won't be tempted to keep spending.
  • Homemade gifts & gifts from the heart: If you have a lot of credit card debt, don't be drawn to add onto it for the sake of gift-giving. Those closest to you would agree that a much better use of your hard-earned money would be paying down that credit card debt. A thoughtful gift might mean more to someone than something that would go out of style next year anyways!

Plan around a financial holiday hangover by tracking prices

3. Track Prices

It's easier than ever to find the best bang for your buck.

  • Do your research. Be patient to find the best deal!
  • Save money with apps:
    • Coupon apps such as RetailMeNot offer easy-to-access bargains right on your phone for both online retailers and brick-and-mortar stores.
    • There are many apps that will let you know if now is the right time to buy and can even predict whether a price will jump or drop. These apps will also help you compare costs between vendors and even if a newer version of the product will be released onto the market soon.
    • Most retailers have a dedicated app for their store, and they keep getting smarter. For your shopping list on Amazon, the Amazon Prime app has price-history graphs so you can truly see if you are getting the best deal, or if waiting/visiting another vendor is going to be less expensive.

Find joy instead of a financial holiday hangover by giving meaningful gifts

4. Think Small but Meaningful

For your friendly mailman, your trustworthy babysitter, or the neighbor who watered your plants while you were on vacation, having small but meaningful holiday gifts on hand is always a good idea.

Small tokens of appreciation, such as candles, bottles of prosecco, or chocolates are fantastic gifts. Small gestures don't have to cost a lot of money, but can go a long way in making someone feel special and appreciated. 

Stick to your plan to avoid a financial holiday hangover

5. Stick to It!

The most important value a budget provides is the satisfaction of knowing you are in control of your finances and escape financial stress. There will always be people who spend large amounts of money on their children, family and friends, but pressuring yourself to match everyone you know can come at a heavy price. Coming out of the holiday season without bulging bills and credit card debt is one of the best gifts you can give yourself!


The holidays can be a stressful time of year for many people. However, you can ease the financial holiday hangover by remaining disciplined and in control of your finances as you cross the finish line for the year.

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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.