A therapist explains holiday spending & how to prevent overspending
The holidays are supposed to be the season of joy, peace, and warm fuzzy feelings, but for many people, it’s also the season of, “Why is my credit card smoking?”
Holiday credit card debt is like a fruitcake: Nobody really wants it, yet it shows up and takes months to get rid of.
Bill Prasad, owner of Prasad Counseling and Training says, “Overspending during the holidays is incredibly common, and yes—there are very real psychological reasons why so many of us lose financial common sense somewhere between the first holiday sale and the last bite of leftover pie.”
How “Perfect Holiday Pressure” Pushes Us to Overspend
Let’s start with the big one: emotional decision-making. When the holidays roll around, people often feel pressure to create a magical experience worthy of a greeting card commercial.
Perfect gifts. Perfect gatherings. Perfect food. Perfect everything.
But inside, a lot of folks are just thinking, “If I buy everyone enough stuff, maybe they won’t notice I’m exhausted.” Shopping becomes a quick mood boost—a dopamine hit. It’s emotional caffeine. Unfortunately, the crash lasts longer than the high.
Social Comparison
Then there’s social comparison, the silent holiday sport no one admits they’re playing. You scroll through social media and suddenly feel like everyone else is living inside a luxury catalog.
Every year there’s the commercial where one spouse surprises the other with a new car. Nothing exudes the holiday spirit more than casually making a five-figure financial decision without consulting your partner!
Then there are the Instagram videos of a beautifully wrapped mountain of gifts. Someone else is showing off matching pajamas for the entire extended family including the dog. Meanwhile, you’re wondering if your budget can accommodate another scented candle. That pressure to “keep up” nudges spending higher in ways we often don’t realize.
A Tradition of Over-Giving & Overspending
Tradition also plays a role – specifically, the kind that costs money. Maybe you’ve always bought a certain number of gifts or hosted a party that has slowly evolved from “small gathering” to “event requiring appetizers with names.”
People get trapped in the idea that they “have to” keep doing things the same way. Spoiler: you don’t. You are allowed to modernize, downsize, or totally reinvent holiday habits. The holiday police are not coming down your chimney or taking away your dreidel.
Overspending also sneaks in as a form of avoidance. Sometimes people shop because they’re stressed, lonely, overwhelmed, or dreading family dynamics. Browsing becomes a distraction. Buying becomes a quick fix. But emotional spending is a bit like eating your feelings—sometimes comforting, usually regrettable.
Financial Procrastination
And then we have future discounting, which is psychology’s fancy way of describing the inner voice that says, “I’ll deal with this later.” It’s the same voice responsible for procrastination, unwashed dishes, and the mysterious existence of junk drawers.
During the holidays, that voice tells you that future you will sort out the credit card bill. But Future You often responds with, “Seriously?”
So how can you stay sane—for your mental health and your finances?
Resetting Your Spending Mindset
Pause before buying. Ask yourself: “Do I really want this, or am I emotionally hungry?”
Clarify what actually makes the holidays meaningful for you. Spoiler alert: It’s usually connection, not coupons. Think about buying someone a less expensive experience as opposed to a very expensive gift. I will never forget when my wife bought us tickets to see “White Christmas” at a movie theater. I love her even more for doing this.
Make a goal after the holidays of establishing a “Gift Bank Account.” Each week a small amount is siphoned off your checking account and lands gracefully in your gift account silently like a snowflake landing on the ground. Next year you will have your spending in control because you won’t spend more than is in the special account and it is all cash!
Set boundaries early. Most people appreciate honesty. And give yourself permission to simplify. Your presence is worth far more than presents.
This year, aim for memories, not debt. Your future self will thank you—and maybe even stop yelling at you in January.
