Lynda Moore offers a crash course in avoiding the pressures and pitfalls of holiday spending

I don’t know about you, but I’m not quite sure where 2025 has gone.  The year has raced by, and I’m running out of steam, and really looking forward to a break.  But despite being on the edge of exhaustion, don’t you just love this time of year?

December often sneaks up with its mix of festive cheer and a rush that can feel downright overwhelming. Between finishing work projects, organising holiday events, putting up the Xmas tree and getting all the decorations out (which seems to happen earlier every year) there’s also navigating the endless stream of Christmas marketing, it’s easy to get swept into a cycle of stress and spending. Suddenly, it’s all “spend, spend, spend; shop, shop, shop” with the nagging thought of how we’ll pay for it all next year.

But it doesn’t have to be this way. Understanding your money mindset behind holiday spending and having a simple plan can make a huge difference.

The first step is recognising the pressure. Christmas brings heavy social and cultural expectations. We feel the need to buy the “perfect” gifts, host the ideal gatherings, and create picture-perfect memories. This pressure can make even the most disciplined spender overspend. By pausing and asking yourself whether a purchase is truly necessary or simply a response to pressure, you take back control and make deliberate choices rather than reacting to external influences.

What I find hardest to resist is all the lovely Xmas food, the shortbread in lovely tins, the chocolate that only seems to come out at this time of year. My plan to not get too caught up in the festive food, is to power shop my way through the supermarket, and have imaginary blinkers on. So far that seems to be working, but I still have a couple more weeks to get through…

We seem to forget that Xmas happens every year at the same time, and every year I say the same thing, and here I am saying it again. Set a realistic budget for gifts, food, and activities. A budget only works if it is treated like a commitment, not a suggestion. Decide how much you can spend on gifts and distribute it across family and friends, remembering colleagues or teachers if applicable. Plan meals in advance, make a shopping list, and avoid impulse buys for things you don’t truly need. Don’t forget to include decorations, charitable donations, and festive experiences in your plan. Think back to last year, how did you go?  Did you blow the budget, or didn’t you even bother to have one?  Just do one thing differently this year, pretty please.

Gift giving is another area where thoughtful choices matter more than sheer expense. It’s easy to fall into the trap of “more is better” during Christmas, but research shows that meaningful, personal gifts are often more appreciated than costly or numerous ones. Handmade presents, baked treats, or experiential gifts like a shared outing or a class can be far more memorable. Charitable donations in someone’s name can also carry emotional value while keeping costs manageable. The key is to focus on gifts that bring joy and connection, rather than stress and debt.  Or you might decide to not give gifts at all this year, particularly if you have had a tough year financially.  I don’t think there is the same expectation that there has been in the past to give gifts to everyone.

Impulse spending is a major culprit during the festive season. Stores and online retailers are designed to trigger immediate purchases through flash sales, countdown timers, and “limited stock” alerts.

Combat this by making a list and committing to it, waiting at least 24 hours before making non-essential purchases, and using cash or a prepaid card instead of credit. A little delay in decision-making can save both money and future regret. I really need to take my own advice here.  I came home the other day with a lovely Xmas wreath for my front door. I didn’t need it, the one we have is perfectly fine, but I wanted a new one for my house, Mum can have the other one for hers, and of course it was ‘on sale’!

Food and entertaining can also strain your budget if not carefully planned. Christmas meals often come with a long list of ingredients and last-minute additions. Start by planning menus early, taking stock of what you already have, and shopping strategically. Bulk buying, freezing leftovers, and sharing responsibilities with guests can all reduce both cost and stress. I’m in Xmas cake making mode, I’ve swopped a few ingredients around, and visited the bulk bin shops to make up my own mixes of fruits and nuts this has all helped to keep the costs down, without compromising flavour.

Social obligations add another layer of financial pressure. Travel, gift exchanges, or hosting duties can sneak up on you and inflate costs. Be honest about what you can realistically handle, both financially and emotionally. It’s perfectly okay to decline invitations outside your budget, suggest low-cost gatherings, or set clear expectations with family and friends about spending limits. Being upfront prevents regret and reduces stress while still maintaining connection.

Amid all this busyness, it’s essential to focus on the true meaning of Christmas. The holidays are about connection, gratitude, and celebration, not the number of gifts under the tree or the perfect meal on the table. Shifting your focus from material presents to shared experiences can reduce financial pressure and increase enjoyment.

Time spent together outdoors, volunteering, creating new traditions, or reflecting on what truly brings joy can be more meaningful than anything money can buy.

Finally, once the season winds down, take a moment to reflect on how you managed your spending. Consider what worked well, where you felt pressure to overspend, and what you might do differently next year. This reflection can help strengthen financial habits and make future holiday seasons more enjoyable.

Christmas doesn’t have to leave you stressed or financially strained. By understanding the psychology behind spending, setting clear limits, and focusing on what truly matters, you can enjoy the holidays without guilt or worry.

After all, the best gift you can give yourself is peace of mind - and that doesn’t cost a thing.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.