The holidays might be a joyous time of the year, but they're also an expensive one -- so much so that more than 25% of U.S. adults have landed in holiday debt in the past. For financial reasons, a large number of Americans find this time of year overwhelmingly stressful.

The logical part of you knows that you shouldn't let the pressure to spend extra on the holidays cause you to make poor financial decisions that haunt you in the new year. Yet 50% of U.S. adults are likely to blow their budgets to make the holidays special, according to data from Vital Smarts. Not only that, but 29% say they can't stick to a holiday budget anyway, and that they rely heavily on credit cards to get through that period.

Woman at computer with papers on desk, covering face as if stressed or upset.


If you're planning to charge up a storm this holiday season in an attempt to please the important folks in your life, you're making a mistake. And the sooner you realize it, the more likely you'll be to take a step back and adopt a more logical approach to holiday spending.

The dangers of debt

Many people overspend on the holidays, thinking they'll just rack up credit card balances temporarily and pay them off in the months that follow. But here's a news flash: Paying off those bills might prove more challenging than expected. Case in point: An estimated 15% of Americans are still in the process of paying off last year's holiday debt. And the longer you carry a balance, the more interest you'll accrue.

Carrying debt could also hurt you in other ways -- namely, by bringing down your credit score. That could be a problem if you're planning to apply for a mortgage, an auto loan, or even a job. That's why it's crucial to stay out of debt in the coming weeks, even if it means having to say "no" more than you'd like.

Keeping your spending in check

Convenient as it is to shop with credit cards during the holidays (or any time of year, really), one of the easiest ways to avoid going over budget this season is to ditch the plastic and only bring cash to the stores. If you make a list of the items you're planning to buy each time you head out and only bring enough money to cover those purchases, you'll eliminate the option to overspend.

At the same time, think about ways you can be more frugal during the holidays to minimize your expenses. If you're hosting a party, cooking the food you'll be serving is a lot more economical than having that event catered. Along these lines, you can assign guests specific items to bring to avoid having to purchase all of the essentials yourself.

Gifts are a different story, but you can keep your costs down by comparison shopping before hitting stores to ensure that you're really getting the best deal. Also, try bundling purchases to take advantage of in-store promotions and coupons. If a retailer is offering 20% off purchases of $100 or more, for example, rather than buying three $35 gifts at different stores, make all three purchases in that one location. Will that possibly mean changing course and buying something different than what you initially intended? Sure. But if it saves you money while still allowing you to be generous with a gift, so be it.

In fact, if you take the attitude that you'll do your best this holiday season given your financial constraints, you'll probably find that you save money by adopting a healthier attitude. It's nice to want to make everyone happy, but you shouldn't do so at the expense of your long-term financial well-being -- because frankly, debt and stress aren't what the holidays are supposed to be about.