The holidays have a funny way of sneaking up on us. One minute you’re packing away Halloween decorations and the next you’re staring at a gift list, travel plans, school parties and a calendar that somehow has no empty spaces left.
And then there’s the spending.
Between presents, decorations, family gatherings, holiday outfits, food and travel, it’s easy for the most wonderful time of the year to become one of the most expensive. But before the shopping begins, there’s an opportunity to do something a little different this year: Make the magic without kicking off 2027 in debt!
Start With a Number
Before making a gift list, figure out what you can actually afford to spend.
That sounds obvious, but it’s easy to start shopping first and add up the damage later. The American Psychological Association (APA) recommends creating a realistic holiday budget and tracking spending throughout the season. Think beyond presents, too. Wrapping paper, decorations, food, shipping, travel and school or workplace gifts can all add up.
Give yourself one holiday number, then divide it into categories. If the budget is $1,000, for example, decide ahead of time how much goes toward gifts, food, travel and everything else.
Once the money has a job, it’s much harder to accidentally spend it twice.
Don’t “Buy” the Memory
Kids aren’t likely to remember whether you spent $50 or $150 on a toy. They may remember driving around to look at Christmas lights, making cookies with Grandma, watching the same holiday movie every year or waking up to a living room full of people they love.
That doesn’t mean you shouldn’t buy presents. It just means the value of the gifts doesn’t have to carry the entire weight of making the holidays magical.
Try choosing a few traditions that cost little or nothing and making them your family’s “thing.” A neighborhood lights tour, a pancake breakfast in pajamas, a holiday movie marathon or a night spent decorating cookies can become the moments everyone looks forward to.
Give With a Plan
The pressure to find the perfect gift can be surprisingly expensive. The APA notes that the pursuit of the “perfect” present can add stress, particularly when it leads to excessive spending.
Instead of buying something simply because it’s on sale or because you think your child needs more gifts under the tree, make a list and stick to it.
You can also consider gifts that create experiences rather than clutter: tickets to a local attraction, a family game, art supplies for a shared project or a special outing together.
And don’t be afraid to talk with extended family about spending limits. A gift exchange with a set dollar amount can be just as festive without requiring everyone to buy something for everyone.
Give January a Gift, Too
The real test of a holiday budget isn’t whether the presents fit under the tree. It’s whether you still feel good about your spending when the decorations come down.
According to NerdWallet’s 2025 holiday spending survey, 31% of people who used credit cards for 2024 holiday shopping still hadn’t paid off those balances by the following holiday season. Holiday spending can follow families long after the wrapping paper hits the recycling bin.
This year, consider giving your future self something, too: a January without a financial hangover.
Spend on what matters. Skip what doesn’t. And when the holidays are over, put some of that same energy toward 2027. Even a small monthly contribution to a holiday savings fund can make next year’s season easier to afford.
Because making holiday magic isn’t about how much you spend.
It’s about making sure the magic lasts a lot longer than the receipt.