‘Tis the season when you can expect to juggle your time agonizing over what to get people and navigating sales to nab something before the big day.
In all the hustle and bustle, your general financial wellness may take a back seat to your holiday financial planning. Before you make a mistake you’ll regret, check in with CreditFresh’s guide to the season. With money managing advice and tips about using credit responsibly, it has what you need to know about keeping your finances in a healthy place as you navigate through the holiday season.
1. Create a Holiday Spending Budget
Between stealing extra shortbreads from your pantry and toasting with one-too-many spiked eggnogs, celebrating in excess during the holiday season may seem like it’s all a part of the tradition. But if you aren’t careful, overdoing it with your holiday shopping could mean you take on holiday debt.
In 2024, shoppers are expected to spend on average, $1,778 for their holiday expenses. Roughly three quarters of consumers surveyed were planning on using their credit cards for these purchases[1]. On top of that, 28% of shoppers who used their credit cards for last year’s holiday expenses still haven’t paid off what they purchased a year ago. Sounds stressful! Generally, the longer you take paying off holiday debt, the more you may end up paying in interest and financing charges.
To keep holiday spending from dampening your good cheer, spend some time on a holiday budget. This spending plan helps you determine how much cash you have on hand to use on gifts, travel, and other holiday necessities.
If you need a framework to help you with your budget, check out these guides to try to figure out what system might work well for you:
2. Make a “Naughty and Nice” List of Expenses to Trim your Budget
If your holiday budget ends up being tighter than you were expecting, go through your spending habits and divide them into two budgeting categories: the “naughty” and the “nice”.
Things that make it onto the “nice” list are essential purchases or bills and may include housing costs, groceries, line of credit payments, and savings. These needs are central to your survival and financial security, so they must stay in your holiday budget.
The “naughty” list, on the other hand, often ends up being unnecessary spending on things like takeout or entertainment. They may be fun, but all they do is make you spend the money that you could use elsewhere. By limiting these “naughty” expenses, you may free up more cash for your holiday budget.

3. Make a Shopping List, Check it Twice
A list and a holiday budget go together like the milk and cookies millions of children leave out for old Saint Nick. This organizational tag team can help you stay on track all season long.
If a holiday budget gives you an idea of how much you can afford to spend on gifts and goodies, a list is your plan of attack that helps you buy items that match this spending limit.
When you go to write your list, jot down how much each item costs and which store offers it at the cheapest price. An organized list like this helps you in two ways:
- You know what stores to visit and which ones to ignore altogether. This helps to prevent you from dropping by a store that holds nothing but temptations to overspend.
- Once you make it to the right store, you’re also more likely to focus on what you need and ignore costly items you don’t.
Knowing what you need before you start your shopping is a great way of blocking out these distractions. If you keep to what you set out to buy, and just that, you may successfully avoid what these extra temptations may do to your finances.
4. Only Use Credit Cards if You Can Treat them Like Cash
When your plans call for snagging online deals that fit your holiday budget, a credit card may be the answer on one condition: if you plan on using your card for these reasons, you must be able to afford each purchase and pay it off before the due date.
This rule is easy to live by once you stop thinking of your card as an endless supply of money and start treating the plastic in your wallet as if it’s the cash in your billfold. Only charge items onto this card if you have that money in your checking or holiday savings accounts. Also keep in mind that making your payments on time can be easier if you have an online account or an app on your phone.
Getting into this habit may help you start saving on finance charges and interest. It may even help you limit your balance, which may have an impact on your credit utilization rate. These are just some of the many habits that may help protect your credit score and history.
Meanwhile, you’ll cash in on all the benefits of your credit cards, including:
- Rewards points
- Purchase protection
- Fraud liability
- Travel perks
If you think you won’t be able to keep to your holiday budget, sideline your credit cards. The only way these benefits make sense is if you can use your cards responsibly. That includes charging only what you can afford and paying your bills on time.
Feeling the pain when it comes to debt? Check out these tips on how to start chipping away at your debt to clear the slate!
Disclaimer: The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only, and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through FreshStart Blog or CreditFresh website.
[1] https://www.cnbc.com/2024/11/12/28percent-of-credit-card-users-are-still-paying-off-last-years-holiday-bill.html