4 reasons we overspend at Christmas and what you can do about it

overspend at christmasI suspect if you ask most people if they didn’t list Christmas as their favorite holiday, it would probably at least rank in the top 3. Yet so often we overspend at Christmas which can be a real killer for our budgets. Too often we get caught up in the emotions of the moment and pull out the plastic figuring it isn’t that much and we’ll just pay it off in January. After all, Christmas only comes around once each year right? Rinse and repeat a few times and when January comes we get a real shock when we open that credit card statement. Then we spend most of next year trying to pay it off, until next December comes and we start the process all over.

One solution is to have a Christmas Fund where we save a little each month so that we have cash to pay for things when Christmas rolls around. This works, but the problem is sometimes there are things we forget about.


We know we have to spend money for presents for friends and family, a Christmas tree, and some other common things. But what about the extras?

  • Baking supplies for all those Christmas goodies
  • Wrapping paper, ribbon and bows
  • Travel expenses to visit family
  • Christmas cards
  • Postage to send those cards as well as any packages you need to ship
  • Special giving you do at the holidays
  • Family Christmas pictures
  • Special Christmas events you may attend

These are just some of the extra expenses that can trip you up.

What you can do about it

Ultimately, most of these items aren’t really unpredictable. They are expenses that we know we will have; we may just forget to plan for them. Perhaps it is too late to plan to handle these budget busters this Christmas, but this is a great time to make sure you aren’t tripped up next year. Start making a list of any expenses you have that are Christmas related.

The problem is come January when you decide you are going to save for Christmas next year, you will have forgotten some of these items. If you make a list now, then you’ll have a good idea of how much you need to save for next year and these Christmas “extras” won’t give you a January headache.

Emotional spending

This can be a tough one, especially as parents. We want Christmas to be perfect for our children. And when Johnny looks at us with those big blue eyes and tells us how much he wants that new iPad or video game or bike or you name it, it is hard not to cave in. And while that is true for our children, it is just as true for our spouses or other family members. Sometimes the only difference is the older we get our “Toys” just get more expensive. We know that we don’t really have the money to buy those presents, but then we start to think about the smile and the joy we’ll see on their faces when they open that gift and our will power disappears.

Now there is nothing wrong with buying things we think will make a loved one happy. However, when this emotion-based spending leads us to making purchases we’ll spend the next 12 months trying to pay off, it can be very damaging to our finances.

What you can do about it

Remember that “stuff” really isn’t the path to true happiness. If little Suzie doesn’t get that doll house she wanted, she probably won’t be scarred for life. Little Johnny probably won’t end up pursuing a life of crime because his parents didn’t buy him an Xbox when he was 10 years old.

I believe that most often the things that provide our most cherished memories are far more about people and relationships than they are about things. Do you remember what you got for Christmas when you were 7 years old? Probably not. But do you remember going to Grandma’s house on Christmas evening, or driving around to see the lights, or that special breakfast you always had on Christmas mornings, or a host of other traditions that make the holidays special?

Don’t put so much pressure on yourself to make the perfect Christmas. You loved ones will remember it as a perfect Christmas because of the time they spent with you not because of some present that will eventually be forgotten.


Fatigue is often a culprit for overspending.  You head out in the morning for a day of Christmas shopping. You spend the day going from store to store. Fighting the crowds. Standing in checkout lines. Etc. And by evening you are tired. Your feet hurt. Your back hurts. And what happens? You say let’s just order pizza tonight because no one wants to cook!

Or perhaps you are out doing that shopping and all you have left is crazy Aunt Mary. You planned to get a $15 dollar item for her but you haven’t found anything yet. You are tired and just want to get home, so you give in and buy that $40 item just so you can say you are done.

What you can do about it

The key to beating fatigue is planning ahead. If you know you are going to be out Christmas shopping all day, throw something in the crock pot before you head out or have some freezer meals planned ahead of time available. Or perhaps this is just another of those extras I mentioned earlier that you need to plan ahead for. Maybe part of your Christmas savings needs to be for having a little extra money for eating out.

Another key to dealing with fatigue is don’t wait until the last minute. I know there are some of you that enjoy heading out on Christmas Eve to finish off your list. Generally speaking though that’s a recipe for overspending. You’ll be tired, maybe a little frustrated with the crowds and feeling the pressure of time, and you’ll end up spending far more than you intended.

Unplanned events

Lastly, there are things that come up that despite the best intentions you just didn’t plan for. You started a new job a few weeks ago and had no idea that they traditionally have a gift exchange within the department. Your first child entered school this year and you forgot to plan for buying a Christmas present for his teacher. You pull out the lights to decorate the house and find that something happened over the course of the year and most of them are no longer working. Who knows. Often, despite our best efforts to plan, life throws us a couple curve balls.

What you can do about it

This one is tough as it is hard to plan ahead for the unexpected. The best advice would be to just assume something unplanned is going to come up and build a little extra fudge factor into your savings.

Remember the real reasons for Christmas

First and foremost remember Christmas is really about celebrating the birth of our Savior. In all of the hype and consumerism, that is easy to lose. While I don’t think all those other things we surround Christmas with are bad things, they can be bad if they cause us to forget the real meaning of Christmas.

Second, I think Christmas is a time for family and close friends.

Both of those things can be celebrated without creating bills that will take us most of the next year to pay.

What trips you up most often at Christmas time?

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