Many millennials, now in their late 20s to early 40s, are heading into the holidays balancing rising costs, caregiving responsibilities and delayed wealth milestones. While many are earning more than they did a decade ago, lifestyle creep and inflation mean seasonal spending can still derail their financial goals.
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From relying too much on “buy now, pay later” to not setting a holiday budget, here are three money mistakes many millennials may be making before the holidays.
Not Setting a Holiday Budget Early
Waiting until late November to set a holiday budget can lead to impulsive spending and higher credit card balances once the season is in full swing.
Millennials are projected to keep their holiday spending essentially flat this year, according to PwC’s Holiday Outlook, making budgeting especially important for avoiding unexpected debt.
“Spend less by starting the holiday shopping season with a budget,” said Richard Barrington, financial analyst for Credit Sesame. “Figure out the total amount you know you can afford to pay off by the end of March next year. That’s your maximum budget for all the people on your shopping list. Then research the best prices online before you start shopping.”
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Relying Too Heavily on Buy Now, Pay Later
Buy now, pay later (BNPL) can make holiday purchases feel more affordable, but overreliance can lead to trouble once bills come due.
According to a September 2025 LendingTree study, 54% of millennials said they were considering applying for a BNPL loan that month, making them the most likely generation to do so. Additionally, 57% of millennials reported regretting a BNPL purchase.
Sabino Vargas, CFP, a senior financial advisor at Vanguard, said millennial shoppers should be cautious with high-rate credit cards and BNPL, which often turn small purchases into lingering, expensive debt.
“The best way to avoid these pitfalls is by setting a clear, realistic budget. Start by mapping out your regular monthly expenses, like rent, utilities and groceries, alongside seasonal costs such as gifts, travel and entertaining. Having a full financial picture helps you spend within your means and protect your long-term financial goals,” Vargas said.
Ignoring Credit Card Rewards Strategies
Many millennials are missing out on valuable travel and cash-back rewards by failing to plan their holiday spending strategically.
According to American Express Travel’s 2025 Global Travel Trends Report, millennials and Gen Z are motivated to book meaningful trips. Yet only 61% of millennials and Gen Z use their credit card to maximize travel rewards.
Redeeming rewards for flights, lodging or statement credits before peak season can help reduce out-of-pocket costs and keep budgets on track.
The Bottom Line
Millennials face unique financial pressures during the holidays, from social media-fueled FOMO to high travel demand and new credit options. Taking a proactive approach, budgeting early and using credit strategically can help keep seasonal spending in check.
“The holidays should result in great memories of friends, family and fun,” said Scott G. Kyle, CEO and chief investment officer at Coastwise Capital Group, “not regrets about overspending and having to face a pile of debt in the new year.”
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This article originally appeared on GOBankingRates.com: 3 Money Mistakes Millennials May Be Making Before the Holidays
