By Caren P. Williams, CPM®
Financial Advisor and Senior Vice President, Morgan Stanley

I love the holidays – the traditions and decorations, celebration of faith, time with family and friends creating memories, and of course, expressions of my gratitude and love with gifts to others.  As I look back over the years, I realize that my favorite holiday memories have had nothing to do with the amount of money I spent.  In fact, it’s just the opposite:  the best memories are from the things or events that cost the least.

When the calendar turns to January and the decorations have been put away, do you fear opening the credit card statement to learn you spent WAY too much? That pit in your stomach is the holiday credit card hangover, and it can certainly put a damper on the best of holiday memories.  Never fear, here are four easy tips to avoid the credit card hangover:

  1. Before you start shopping, set a budget. Look at your monthly budget; “Gifts” or “Gifting” falls under Discretionary Expenses in your budget.  And remember, your discretionary expenses should not exceed 30% of your total monthly income.  If you plan to spend more than this amount for your holiday gifts, you should have been setting money aside as a savings goal.  If you weren’t able to do that, be proactive and take a stand now to limit your Gifting to stay within your overall budget.
  2. Once you determine your total Gifting budget, make a gift list with limits for each person. Keep the list handy as you shop and refer to it often.  This way, you won’t be tempted to buy a more expensive gift than intended.  Check yourself at the end of each shopping day (either online or in the stores) by adding up your receipts to make sure you are still on target with your Gifting budget.  If you start to veer, stop and adjust your remaining gift list to get back on track.
  3. Consider gifts of your time or handiwork, instead of purchased items.  One of my favorite gifts I receive each year is the homemade trail mix that my sister and brother-in-law make in Phoenix and ship to us in a festive holiday tin.  My whole family LOVES it, and we all look forward to it every year.  I realize they spent money on the ingredients, tin, and shipping; but I feel certain the total cost is more reasonable than if they had purchased gifts for everyone instead.  Plus, it is more meaningful to our family!
  4. Spend time with others instead of money. Invite your friends or extended family over for a Game Night, Favorite Holiday Movie Night, or Cookie Day to bake cookies.  No gifts allowed; just bring an easy dish to share, pizza to bake at home, or ingredients for baking.  Better yet, plan some time to volunteer together for a local charity and remember the real reason for the season.  My Italian family kicks off the holiday season with “Ravioli Day,” when we get together to make homemade ravioli for the holidays using my great-grandmother’s recipe.  We each bring a breakfast item and contribute $6 to cover the cost of the ingredients; and we spend hours making the filling, rolling the dough, and stamping the ravioli forms. It is a wonderful time to talk with cousins and share a craft that past generations perfected.  Whichever event you choose, your friends and family will appreciate the opportunity to be more prudent with their holiday spending too, and you will all have memories to share or traditions to pass on to future generations.

Just remember: A little planning and creative thinking can go a long way to making the holidays more enjoyable and less stressful, and freeing you from financial guilt in the months to follow.  Stick to your Gifting budget and spend more time and less money to show those you love how much they mean to you.  You will love the memories you create, and you can celebrate the New Year without the Credit Card Hangover.



Caren Williams is a Financial Advisor with Morgan Stanley Global Wealth Management in Nashville, and may be reached at


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