It’s Not Too Late to Rein In Holiday Spending

Mx. Clark, the Seattle financial planner, suggested talking with your family to agree on a maximum amount to spend on gifts and putting holiday spending in context with longer-term financial goals. You may be giving priority to saving for other things — like a car or a down payment for a house. “You don’t want gifts for other people to derail your goals.”

Lukas Battle, a stand-up comedian in New York whose TikTok video popularized the concept of “loud budgeting,” said the practice of being open with others about your circumstances and your willingness to spend money could also apply during the holidays. He advised first asking, “What do I value? What do I want to spend my money on?” Then “tell people what your plan is.” Maybe it’s putting together small gift bags, he said, or cooking a meal for friends. When he was a child, his family emphasized items like board games to play together. Setting aside time to go for a walk with a friend or to host a movie night at home can be more rewarding than splurging on a pricey night out. “The main idea,” he said, “is communication.”

Yanely Espinal, a financial educator and author of “Mind Your Money,” said buying gifts for her large extended family would be financially difficult. So at Thanksgiving, each family member draws a name from a hat and buys a gift for that person. Ms. Espinal said she preferred to make donations to 529 college savings accounts for younger family members rather than buying toys, and encourages others to do so as well. “They know I’m a personal finance nerd,” she said.

Should I consider special cards and payment plans offered at retailers?

Retailers selling electronics, jewelry and home improvement materials often promote “deferred payment” credit cards, which let you purchase an item without paying interest for a year or longer. But steer clear of such offers unless you are sure you can pay off the balance by the end of the promotional period, said Chi Chi Wu, a senior attorney at the National Consumer Law Center. Otherwise, you’ll be charged interest — typically in the double digits — from the date of purchase, which can add hundreds of dollars to the cost of the item.

Most online retailers offer “buy now, pay later” plans, which typically let you choose to pay for purchases in four installments that are automatically deducted from your bank account. Ms. Wu advised caution in using them for multiple purchases at the same time. You could end up with several different payment dates. If you lose track and an automatic withdrawal overdraws your account, you could be charged an overdraft fee by your bank.

What if my credit card bill has become unmanageable?

You’re not alone. Credit card balances increased by $24 billion, to $1.7 trillion, in the third quarter of 2024, according to the Federal Reserve Bank of New York. If you need help getting your debt under control, consider a consultation with a nonprofit credit counseling agency. (Search for reputable providers on the website of the National Foundation for Credit Counseling.) A counselor can review your situation and recommend options, such as a debt management plan, which reduces the interest rate on the money you owe in exchange for agreeing to pay it off over several years.