7 Tips to Help You Avoid Holiday Shopping Mistakes

Man walking on sidewalk with bags after holiday shopping

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Overspending during the holidays is a common habit and one that seems likely to continue. In fact, according to forecasts from the National Retail Federation, retail holiday sales in 2021 are expected to hit an all-time record, reaching anywhere from $843 billion to $859 billion.

It can be especially tempting to spend wildly, for example, the first holiday season after you get your first real job. You are making a real salary, and you feel that you want to say thanks to those who have helped you while you struggled through college and internships. However, whether you're making your entry into the real world, an established member of the workforce, or supporting a family, you should make sure you don't blow your budget in the process. 

That's why it's important to have a holiday survival guide to help you avoid common shopping mistakes and to prevent yourself from overspending.

1. Don'r Forget Your Budget

Before you buy a single present during the holiday season, here are some steps to take:

  1. Make a list of which items you want or need to buy and how much you can specifically afford for gifts.
  2. Determine your spending budget beyond gifts. Many people forget to add in holiday cards, office parties, white elephant gifts, and travel expenses. If you are planning a party, you should add this to your list as well.
  3. Once you add up all your projected costs, plus the estimated cost for gifts, then you'll have your holiday spending budget. 


It's easier said than done, but it's important to stick to your holiday budget. When you have used up all of your holiday money, it's time to stop spending. 

2. Try Not to Overuse Credit

One common holiday shopping mistake is to put everything on your credit card. You can end up paying for your gifts for several months—or even years—if you make this mistake. 

Keep in mind that people tend to overspend when they use credit cards compared to cash. As a matter of fact, according to a study conducted by researchers at the MIT Sloan School of Management, not only are consumers more likely to buy something at a higher price with cards, "they also are likely to give larger tips and make more impulse buys."

It's important to use your debit card or cash to purchase your holiday gifts. If you plan carefully, you do not need to use credit to buy anything associated with the holidays. This is one gift you should give yourself.

3. Don't Buy to Impress

It is tempting when you have some money to spend to go out and buy extravagant gifts for everyone on your list, whether they're your parents, a significant other, or a close friend. But try not to go overboard.


Most people in your close circles would likely prefer a thoughtful gift rather than one that's simply carrying a hefty price tag. 

4. Don't Forget Anyone

One common holiday shopping mistake is forgetting to buy a gift for someone important. This is why shopping with a list is critical because, for one, you do not want to leave out certain people when it comes to giving gifts. Here are some key steps to help you remember:

  1. When you formulate your list. write down all the important people you'd like to give gifts to and ideas of what to give for each.
  2. When you set out to shop, whether online or at the stores, take your list with you and consult it as you go.
  3. Cross off each person as you find the perfect gift, so you don't overbuy for one person and forget another. 

5. Don't Forget to Shop Around

Instead of stressing yourself out by heading to the mall and running from store to store trying to find the perfect gifts during the holiday season, try comparison shopping online first from the comforts of home.

Shopping online has become the standard for many people in the U.S., especially since 2020.


According to the Census Bureau of the Department of Commerce, U.S. retail e-commerce sales in Q2 of 2021 reached $222.5 billion, an actual 9% increase from the same period in 2020, when online shopping exploded because it became more of a necessity. In Q3 of 2021, retail sales clocked in at $214.6 billion, up 6.6% from the same period a year earlier.

Even if you decide that you'd still rather make the trek to the stores, at the very least, comparing deals (like Black Friday sales) and prices online can give you a clearer idea of how much an item should cost you once you set foot in the physical location.

6. Don't Wait Until the Last Minute

Waiting until the last minute to do your holiday shopping can inevitably backfire. As you rush to try to find a decent present for your family and friends in nearly empty aisles of a store, you may wind up spending way too much on an item that feels less thoughtful or sincere because you have no other options.

Avoid this holiday shopping mistake by shopping ahead—perhaps even before the holiday season begins.

7. Don't Forget Your Year-Round Budget

A significant financial mistake that people can make is forgetting to spread the cost of holiday shopping over the entire year, meaning you should set aside money each month to cover the cost of the next holiday season.

Put the money into a holiday savings account or simply earmark the money in your normal savings account. This allows you to purchase your holiday gifts without overspending or worrying about how much you have to spend on them when the time comes.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. National Retail Federation. "NRF Predicts Highest Holiday Retail Sales on Record."

  2. Drazen Pelec, Sachin Banker. "How credit cards activate the reward center of our brains and drive spending." MIT Sloan School of Management.

  3. United States Census Bureau. "Quarterly Retail E-Commerce Sales, 2nd Quarter 2021."

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