5 Tips to Avoid the Holiday Spending Hangover

because the holidays are basically here

Author

Michela Allocca
October 28, 2025

👉🏻 The TL;DR (7 minute read):

The holidays are about connection, not consumption. If you haven’t started saving yet, start saving now. I’m going to cover how to spend intentionally and use the tools available to you, to enjoy the holidays and avoid starting 2026 feeling financially stressed.

🚨 There are only 2 months left of 2025! Don’t let your goals get away from you! Check out the Personal Finance Dashboard or the Basic Budgeting Template! 

MONEY
5 Tips to Avoid the Holiday Spending Hangover

There’s nothing worse than waking up on January 1st with two things: a headache and a credit card balance you don’t want to open.

The holidays sneak up on us every year (how, IDK!!?) even when we swear we’ll be more prepared. The truth is, we think that discipline is going to save us when we’re faced with holiday temptation.

But it’s really not about being perfectly disciplined; it’s about being intentional. Which as you make know has been a major theme of 2025.

So this holiday season, instead of focusing on what to buy, I’m focusing on how to continue to spend mindfully. This doesn’t mean I won’t buy anything (trust.. I will) but I am going to go into it with a more definitive plan not only around what I am buying, but how I will optimize.

Let’s get into it!!

Tip 1: Start a Holiday Sinking Fund

I always start this at the beginning of each calendar year, but even if you haven’t started one yet, it’s worth doing.

Set your budget for gifts, travel, events - all of it - and divide it by how many weeks we have left (hint: 7). That’s your weekly transfer to your holiday sinking fund.

I keep mine in a SoFi high-yield savings vault labeled Holidays (you can make as many mini-vaults as you want). When I shop, I use only what’s in that fund. It’s helped a ton to avoid shopping guilt and stress because I’ve created this boundary and I stick to it!

→ You can open your HYSA and start your Holiday sinking fund HERE!

Tip 2: I Audit My Spending (again lol)

I will do this ahead of the holiday spend season, usually during my money review from October → November. The goal is to find a few “leaks” that I can patch up and free up some extra cash to put towards my holiday spending.

Pausing one weekly habit (takeout, coffee runs, whatever it is) adds up fast. Redirect that money to your holiday fund and you’ll feel the difference in January.

If you need help tracking where it’s going, the Personal Finance Dashboard is your best friend. I track all my spending and savings goals in there every month.

Tip 3: I Gift INTENTIONALLY!

Tell me if this is a hot take but I truly hate receiving gifts I didn’t ask for. Nothing makes me feel worse than receiving a gift I didn’t want and knowing that someone else spent their money on it and it will go to waste.

My family actually stopped doing “everyone buys for everyone” gift-giving a few years ago and started a Secret Santa. We each get one person, we buy one thoughtful gift, one small stocking, and there’s no chaos.

The best part? It made gift-giving fun again.

This year, I’m leaning into experience gifts and DIY ideas — like a homemade loaf of sourdough, or a “coffee tour” day with my dad. Less clutter, more meaning, and generally less expensive.

Tip 4: I Let My Money Work For Me

If I’m shopping, I’m earning cash back. Rakuten has been my go-to for years - it’s basically free money on purchases I’d make anyway. And during the holidays, cash back often doubles or triples.

I cannot emphasize enough how much I love Rakuten - truly if you are not using it yet you NEED TO BE!!!

My favorite money trick? I use the check I get in January to seed next year’s holiday fund. That’s on breaking your budget!!

Tip 5: I Track Everything - Then I Plan Ahead

Holiday spending in November and December is data for next year. Each year when I am setting my budget, I’ll take a look at how I spent last year. It usually is telling to see what I spent after the holiday in that weird “in between” week because it’s the time of the year where I tend to loosen my grip on my spending rules.

This year, I am going to plan for that. If you have no idea what you spent last year, then use this year to start!

The Bottom Line

You don’t need to deprive yourself to have a mindful holiday season. You just need a plan, a little awareness, and the discipline to stop buying things you don’t actually want to pay for later.

Connection > consumption. Always.

If you enjoyed this newsletter, I dive deeper on this topic in this weeks youtube video!

💡 Not sure how much you’re spending? Start by tracking your numbers in a tool like the Personal Finance Dashboard!

Go from AI overwhelmed to AI savvy professional

AI will eliminate 300 million jobs in the next 5 years.

Yours doesn't have to be one of them.

Here's how to future-proof your career:

  • Join the Superhuman AI newsletter - read by 1M+ professionals

  • Learn AI skills in 3 mins a day

  • Become the AI expert on your team

WEEKLY RECOMMENDATION

The More Money I Have, the Worse I Am at Managing It: This is a super interesting article about how people tend to abandon sound financial habits as they start to make more money, and those with limited income tend to make clearer financial decisions. It all goes to show, if you can’t manage $10,000 you won’t be able to manage $100,000. Financial discipline > earning more (although obviously earning more helps).

RESOURCES
What’s Happening This Week at Break Your Budget

  • This week on Don’t Depend on Daddy: I recently read The Life-changing Magic of Tidying Up by Marie Kondo and it re-inspired me to declutter and tidy my space. In this episode, I dissect the KonMari method, why decluttering is so important, and how to start!!

  • Holiday Spending Tips: If you enjoyed this newsletter, I dive deeper into everything I shared in this weeks youtube video and also provide some more examples.

LOOKING FOR MORE?
Check out ALL of my Money & Career Resources!

xoxo,

Michela