Bruce Helmer and Peg Webb
After several years of stubborn inflation and steep borrowing costs, this holiday season finds many families determined to celebrate — but quietly worried about how much they’re spending.
With the average American planning to shell out roughly $1,700 on gifts, travel, and entertaining this year (up from about $1,430 in 2022) those worries are understandable.
Furthermore, tariffs have already raised prices by an average of 5%, according to the Harvard Business School Pricing Lab’s analysis of more than 350,000 goods. Ultimately, companies pass along their increased costs to consumers. Frequent holiday staples like toys, electronics and clothing are some of the products most impacted by tariffs, with costs increasing as much as 35% in some categories.
Even for people who manage to stay within budget, six in 10 shoppers later regret at least some of their purchases, especially parents with young children who often overspend to make the season “perfect.”
That buyer’s remorse doesn’t only come from an empty wallet. It also comes from guilt: the uneasy sense that we’ve spent too much, or on the wrong things, or for the wrong reasons. The good news is that a few simple mindset shifts and habits can help you celebrate generously without feeling financial regret come January.
Start with joy, not numbers
Financial advisers usually tell clients to keep emotion out of money decisions. The holidays are the exception. Budgeting by emotion and buying what truly brings joy to the recipient can be more effective than budgeting by category.
Start by making a “joy-per-dollar” list. Which purchases last year made you happiest? Which ones barely registered once the wrapping paper hit the recycling bin? Cut the low-joy categories first. Then pre-commit an overall number for generosity (covering gifts, charitable donations, and gatherings) and say it out loud to a partner or friend. This small act of accountability helps keep your plan real.
Use a cap that fights spending creep
A common rule of thumb is to keep total holiday spending within 1-2% of annual income, but you should pick the level that’s right for you. Translating that limit into weekly mini-budgets between now and New Year’s can prevent that “just-one-more-gift” mentality. The idea isn’t to cut out celebration, but to contain it, so you can enjoy the season without regretting overspending.
Buy early, buy fewer, buy better
Inflation may have eased, but prices on many goods remain higher than pre-pandemic levels. Stretch your dollars by shopping early and intentionally. Prioritize one meaningful gift per person rather than a pile of filler gifts. If you’re traveling or hosting, fold those costs such as gas, airfare, hotels and food into your holiday plan from the start instead of treating them as extras.
Whenever possible, choose experiences over material goods: a family concert, a cooking class, or tickets to a local attraction. These memories often outlast items. And if you can, shop local and purchase items that reflect your values. Spending that aligns with your principles will ultimately feel more rewarding in the long run.
Cards, cash, and ‘buy now, pay later’
Today’s average credit card interest rate is roughly 21%, meaning every impulse swipe of your card can quickly become expensive. If you tend to carry a balance, consider using a debit card or a prepaid spending account for gifts. Turn on real-time spending alerts in your mobile banking app; this can serve as a modern substitute for the old cash-envelope system.
And be cautious with “buy now, pay later” (BNPL) plans. Surveys show nearly half of BNPL users regret at least one purchase. If you do use one, limit yourself to a single BNPL loan at a time and set calendar reminders for each payment.
Three quick ways to curb impulse buying
• Apply the 48-hour rule. Leave online items in your cart for two days; if you still want them after 48 hours, clink “checkout.”
• Say no to instant-discount store cards. Their teaser offers often come with higher interest rates.
• Unsubscribe and mute. Reducing promotional emails and retail app notifications can help you stick to your list.
When you’ve already overspent
If the damage is done, don’t panic, just prioritize. Pay down the highest-rate balances first. Return unopened items or exchange them for shared experiences instead. Then automate payments above the minimum to ensure progress. A short-term balance-transfer card can help, but only if you’re confident you can clear the debt before the low-interest window closes.
Focus on gratitude, not guilt
Ultimately, guilt fades when your plan matches your values. Give yourself permission to celebrate wisely. The holidays are about connection, not perfection, and about sharing what matters most, not what costs the most.
A little planning, a little perspective, and a lot of gratitude can turn this year’s spending season into one you’ll remember fondly, not fretfully. And that’s a gift worth keeping.
Related Articles
Your Money: Financial planning tips for America’s heroes
Your Money: Financial stress can lead to avoidance, survey says
Your Money: Cybersecurity and your money in the AI era
Your Money: Should you tell your children how much you have?
Public hearings planned on Xcel Energy’s proposed rate increase
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Advisory services offered through Wealth Enhancement Advisory Services LLC, a registered investment adviser and affiliate of Wealth Enhancement Group.
Leave a Reply