The holiday season often leads even the savviest of spenders to overextend their budgets. Gift giving, parties, traveling, food—it all adds up, especially on top of regular monthly bills. If you feel anxiety brewing about your finances this time of year, take a deep breath: There are specific things you can do to prevent overspending, no matter where you are starting from.
Track every dollar
First, start tracking your spending down to every last dollar. Download a budgeting app or use a spreadsheet. The act alone of having to input and record where your money is going each day makes you more aware of bad habits. Analyze the recent data, looking for those frequent little expenses on things you likely won’t even remember or care about next month.
List must-haves vs. nice-to-haves
Next, make your holiday gift list then divide people into must-have and nice-to have categories. Must-haves should be immediate family and very close friends where you feel obligated. Nice-to-haves are those you’d like to get gifts for if possible. Be honest with yourself about priorities and expectations.
Set firm spending limits
For each must-have person, set a firm limit for spending on gifts, say $50 or $75 max. Having the endpoint caps explicitly stated makes it easier to say no to things in stores that exceed boundaries. For nice-to-have folks, set even lower thresholds, gifting only if you have extra money later.
The cash-stuffing method, “or envelope system,” helps turn your budgeting into a more visceral, even “gamified” experience: You have different physical envelopes for different categories of expenses, and you stuff each envelope with a budgeted amount of cash for one category (or pay period). The key here is you can only spend money in a certain category (say, groceries or gifts) from its designated envelope. Once the envelope is empty, that’s that until your next paycheck arrives.
Cash-stuffing works because it forces you to be more intentional (deciding how much money gets allocated into each envelope) and more disciplined (you can’t put more money into the envelope once it runs out).
When you feel yourself getting carried away or tempted by holiday commercialism, pause for perspective. Make a list of things most important for well-being—family, friends, doing meaningful things. No material goods you can buy ultimately provide more lasting joy than those pillars. Keep the holiday season about value, not money-sucking excess. Stay intentional with spending while still embracing the spirit of the season.