(Reviewed by Finelo)
This year, holiday giving has reached new heights. Americans are spending now more than ever. In 2025, U.S. holiday spending surpassed $1 trillion for the first time. Online shoppers alone spent $44 billion during Cyber Week, according to the National Retail Federation and Reuters.
Many households now stretch their finances with credit cards and buy-now-pay-later options. Relying on debt rather than increased income to power Christmas magic.
Rising holiday spending combined with low financial literacy exposes economic vulnerability.
Finelo, an online learning platform for financial empowerment, sees this trend as an opportunity to address 'credit card hangover.' Stress and guilt often follow holiday spending, as many find themselves financially stretched thin. Build your financial skills for 2026 with Finelo, and read on for four steps to help beat holiday spending anxiety.
Step 1: Take Stock of the Reality Under the Holiday Spending
Here's the truth: Just because holiday sales are high doesn't mean everyone's in great financial shape.
According to the Federal Reserve Bank of New York, total U.S. household debt reached $18.59 trillion in Q3 2025. Credit card balances and consumer loans continue to rise. At the same time, a survey cited by Investopedia found that most Americans cannot cover an emergency expense of $400–$1,000 without borrowing, selling assets, or using credit.
The numbers say it loud and clear: holiday spending does not come from a surplus. Instead, companies leverage high-budget marketing campaigns and emotional advertising to encourage spending. The idea of "holiday tradition" creates an image of lavish gift-giving that, honestly, not everyone can afford.
A common mindset during this season is the present bias: people focus on immediate rewards instead of long-term security. Present bias leads us to overvalue short-term benefits and ignore future costs. For example, holiday sales or luxury gifts can lead shoppers down a costly path that's hard to recover from once the celebrations end.
Step one in recovering from holiday spending is simple: recognize the gap between spending behavior. Doing so helps avoid carrying emotional overload into your financial decisions.
If you feel overwhelmed, step back and reassess before moving on. To transition from overwhelm to action, review your recent bank and credit card statements. List all your outstanding debts, noting the amounts, interest rates, and due dates. Set a small, achievable goal for the following month, such as reducing spending in one category. These actions pave the way for greater financial clarity and readiness.
Step 2: Prioritize Liquidity Before Long-Term Goals
After a season of limited-time offers and aggressive advertising, people often respond with dramatic post-holiday savings tactics. But the numbers show that a more sustainable strategy is to restore liquidity. Liquidity means having enough cash on hand to cover daily needs and unexpected expenses. Start by setting an automatic transfer from checking to savings on payday. This method gradually builds a financial buffer without much effort. If saving is difficult now, try cutting non-essential spending or negotiating bills to free up cash flow. These changes ease financial pressure without disrupting your day-to-day.
The National Financial Capability study, by the FINRA Foundation, shows important results. Americans with even a modest emergency buffer—enough to cover three months' essential expenses—report less financial stress and make fewer reactive decisions. Ease of mind means less impulse purchases for family and loved ones.
After the chaos of holiday gift-giving, focus on rebuilding a basic cash cushion—an accessible savings fund for emergencies—before optimizing your portfolio. This step reduces reliance on high-interest credit cards or personal loans when unexpected expenses arise, helping you maintain peace of mind.
The recurring mantra for spenders after the holidays is universal: financial stability precedes financial growth.
Step 3: Separate Short-Term Debt from Long-Term Strategy
Let's look at a scenario. If you live in a messy environment, anxiety gnaws at you as unsorted clothes and dishes pile up. You might delay dealing with these tasks because they cause more stress just thinking about them.
We're not talking about living spaces, but this scenario is a good analogy for financial avoidance. When debt becomes overwhelming, like dishes piling up, it's easier to ignore it than face the stress. Recognizing this can help people connect the metaphor to financial habits and encourage action. Here are some helpful steps you can take today:
- Start by making a simple list of all debts for clarity.
- Consider reaching out to creditors to discuss payment plans or adjustments and ease the strain.
This reaction was highlighted in the Financial Times, which reported that periods of high household debt often coincide with increased reactive behaviour, particularly among less-experienced investors.
Finelo's review of 2025 holiday spending distinguishes between damage control and future planning. Focusing on short-term actions, focus on stabilizing cash flow and reducing interest costs, while building on long-term actions to build skills, understanding markets, and making informed decisions over time.
Step 4: Rebuild Confidence Through Financial Skill-Building
Recent surveys reveal not only stress but also rising pessimism among Americans.
According to Bankrate´s Financial Outlook Survey, roughly 32% of Americans expect their finances to worsen in 2026. That's the highest level of pessimism since 2018.
Yet the same data shows people engaging in financial education—even at a basic level—report greater confidence and lower anxiety.
EdTech and online learning are increasingly viable ways to beat financial anxiety. The holiday spending season can become a chance for recovery and skill learning. Start by signing up for a free introductory course on personal finance. This first step lets you ease into financial education at your own pace and builds a foundation for lifelong financial literacy. Learners are encouraged to:
- learn how markets work and practice decision-making without risking real money through simulated trading.
- understand how to implement a savings and money-earning strategy in action.
Instead of eliminating uncertainty, the goal is to build skills to handle tough seasons with confidence and clear judgment.
Credit Card Offers and Rewards: Making the Most of Your Plastic
Credit cards are powerful tools during the holidays. They offer rewards, cash back, and exclusive benefits that can help save money.
At the same time, overspending can lead to debt, fees, and high interest rates, erasing any potential benefits. Make a budget before the holidays, track your spending, and use credit carefully. Cash back and discounts work only if you stay aware of your full financial picture.
Let your card work for you, not against you.
If you want to build financial skills but have no prior experience, online platforms like Finelo can help. Become an empowered learner with tools to understand risk and rebuild financial confidence, join a thriving community of over a million users, and gain financial clarity in as little as 15 minutes of gamified learning per day.
