December 2025. Mental Wellness

Holiday Debt: From Guilt and Stress to a Clear Strategy

For many people in the U.S., the holiday season doesn’t end on New Year’s Day. It lingers in the form of credit-card statements, buy-now-pay-later plans, and a quiet sense of dread every time you open your banking app.

That mix is what we usually call holiday debt: money borrowed to pay for gifts, travel, food, décor, and “once-a-year” experiences that didn’t fit comfortably into your budget.

If you’ve ever opened your account “just to check,” felt your stomach drop, and closed the app right away, you’re not alone. That reflex is part of the emotional weight that comes with carrying a balance into the new year.

You are far from alone if you entered January with holiday debt. A recent LendingTree survey found that about 36% of Americans took on new debt during the 2024 holiday season, with an average balance of $1,181, up from $1,028 the year before. At the same time, a 2023 poll by the American Psychological Association (APA) reported that 89% of U.S. adults feel stressed during the holidays, and more than four in ten say their stress is higher than the rest of the year.

If you’re dealing with a leftover holiday balance right now, this guide will help you understand why it’s so common, how it affects your mental health, and—most importantly—how to build a clear, realistic plan to pay it down and protect your future holidays.

Why holiday debt is so common

When you look at holiday debt in context, it becomes less about “being bad with money” and more about the systems and expectations around you.

1. Gifts, travel and celebrations land on top of a normal month.

You still have rent or a mortgage, utilities, groceries, car payments and student loans. Then November and December add flights, hotels, parties, charitable giving, school events, décor for home and office, teacher gifts, and last-minute “just in case” purchases. Even a careful budget can’t stretch that far without planning months in advance.

2. Sales pressure is intense and highly targeted.

Retailers now track browsing behavior, abandoned carts and previous orders to send perfectly timed emails and notifications. Black Friday countdown clocks, “only three left at this price” pop-ups, and extra discounts if you open a store card are all designed to feel urgent and personal. It’s no surprise that plenty of holiday debt starts with “I didn’t want to miss the deal.”

3. “Once-a-year” thinking lowers your guard.

It feels reasonable to spend more “because it’s only once a year” or “the kids are only this little once.” The problem is that many other costs are also “once a year”—insurance premiums, car repairs, school fees, tax bills. When several of those land on the same credit card, balances climb quickly and turn into lingering holiday spending.

4. Many households already carry significant debt.

By late 2024, total U.S. credit card balances were estimated at more than $1.1 trillion, and the average American carried thousands of dollars in revolving debt (Federal Reserve Bank of New York, 2024).

When you start the season already owing money, even a few hundred dollars of additional holiday debt can push your finances from uncomfortable to overwhelming—especially with average interest rates above 20%.

None of this means holiday debt is inevitable. But it does mean there are understandable reasons you got here—and that shame is not an effective repayment strategy.

How holiday debt feels, not just what it costs

Holiday debt is not only about numbers. It often shows up in your daily life and relationships:

• Guilt and self-criticism. You might replay specific purchases—plane tickets, a toy that’s already forgotten, a fancy dinner—and think, “What was I thinking?” That critical voice is loud, especially if you grew up in a household where money was a source of tension.
• Avoidance and dread. Many people delay opening statements or logging into online banking so they don’t have to see their balance. You might delete email alerts without reading them, or stack physical bills in a drawer “for later.” Unfortunately, avoidance usually raises anxiety instead of lowering it.
• Arguments with a partner. One person may feel blindsided by how much was spent; the other may feel judged for wanting to give generously or travel to see family. Old conflicts about money, class background or “who works harder” can flare up when the bill is attached to holiday debt.
• Post-holiday emotional crash. Once decorations come down and routines resume, the contrast between December sparkle and January reality can be sharp. For people already managing anxiety, depression or trauma, the combination of gray weather, less daylight and a lingering holiday balance can intensify symptoms.

In one analysis, a majority of people who took on holiday debt reported feeling stressed or regretful about it afterwards (LendingTree, 2024).

The goal of a repayment plan isn’t just to save on interest. It’s to help your body and mind move from dread and self-blame toward a sense of agency.

Taking inventory without panic

Before you can tackle holiday debt, you need a clear picture of it. Think of this as a short financial check-up, not a trial.

If the idea of looking at your accounts makes your chest tighten or your thoughts race, that’s already useful information. It means money isn’t just about math for you—it’s tied to memories, expectations and fears.

Step 1: Gather everything in one place.

Collect your credit card statements, store cards, buy-now-pay-later plans and any personal loans you tapped for holiday spending. If you use banking apps, open each one and take screenshots or notes.

Step 2: Capture four key numbers for each account.

For every line of debt, write down:

• Current balance
• Interest rate (APR)
• Minimum payment
• Due date

You can do this in a notebook, spreadsheet or budgeting app—whatever feels less intimidating.

Step 3: Label holiday charges.

Skim through November–January transactions and mark those clearly tied to the holidays—gifts, flights, hotels, decorations, extra groceries for gatherings, donations, event tickets. This helps you see how much of your total balance is truly holiday debt and how much is everyday spending.

Step 4: Add up the holiday portion.

The final number might sting, but now you know what you’re working with. You can even write: “Holiday balance total = $_____. This is a snapshot, not my identity.”

If this step feels overwhelming—if you find yourself shaking, dissociating, or wanting to shut your laptop—take it as data. Money is touching some deeper emotional or trauma-related themes. That’s exactly the kind of material that can benefit from therapeutic support.

Holiday spending through the 50/30/20 lens

The 50/30/20 rule is a simple way to think about a monthly budget. It suggests using roughly 50% of your after-tax income for needs, 30% for wants and 20% for savings or extra debt payments. The rule was popularized by Elizabeth Warren and Amelia Warren Tyagi in their book All Your Worth: The Ultimate Lifetime Money Plan (Warren & Tyagi, 2005).

In practice, these percentages are flexible—especially in high-cost cities like New York or Los Angeles—but they’re a useful starting point.

Imagine your take-home pay is $4,000 a month:

• Needs (50% = $2,000): housing, utilities, basic groceries, transportation, insurance, minimum debt payments.
• Wants (30% = $1,200): dining out, streaming services, hobbies, vacations, holiday gifts and extras.
• Savings and extra debt payments (20% = $800): emergency fund, retirement contributions, and additional payments toward credit cards or loans beyond the minimums.

During November and December, many people slide far outside this 50/30/20 balance. Holiday trips and gift lists can easily push the “wants” category to 40–50% of income for a month or two, while savings and extra debt payments shrink close to zero. That’s how holiday debt sneaks in: you’re not just overspending; you’re borrowing from your future self.

You can use the rule in two ways:

• Looking backward. Print your bank or card statements for the holiday months and roughly categorize each expense as need, want or savings/debt. The goal isn’t precision; it’s to see the pattern. Many people realize that what they thought was a “needs” month was actually 60% wants.
• Planning forward. For the next six months, you might temporarily shift to something like 45/25/30—slightly leaner wants, slightly smaller needs, and a bigger slice devoted to paying off holiday debt and rebuilding your safety net.

The point is not to follow a rigid formula, but to make sure your plan to eliminate holiday debt still leaves room for basic needs and some joy.

Two simple ways to pay down debt

Once you know what you owe and how it fits into your overall budget, you can choose a method to pay holiday debt down. Two of the most common approaches are the debt snowball and debt avalanche.

With the snowball method, you list your debts from smallest balance to largest, pay the minimum on each one, and put every extra dollar toward the smallest balance. When that’s gone, you roll its payment into the next smallest.

With the avalanche method, you list debts by interest rate, highest to lowest. You still pay the minimum on everything, but all extra money goes toward the highest-APR account first. Once that’s paid off, you move down the list.

Here’s a quick comparison of those options:

Method	How it works	Pros	Things to keep in mind
Snowball	Focus extra payments on the smallest balance first.	Fast psychological wins; good if you feel stuck.	May cost more in interest if small debts have low APRs.
Avalanche	Focus extra payments on the highest interest rate first.	Saves the most money in interest over time.	Progress can feel slow if the highest-rate debt is large.
Hybrid plan	Start with one small debt, then switch to avalanche.	Combines motivation with mathematical efficiency.	Requires a bit more planning and regular check-ins.

You don’t have to pick one method forever. A lot of people use a hybrid:

• Pay off one small balance quickly (snowball-style) to build confidence.
• Then switch to avalanche, focusing on the remaining debt with the highest interest.

Whichever you choose, write it down: “I’m using a snowball plan,” or “I’m in avalanche mode.” This moves your holiday debt out of the category of “shameful secret” and into “project with a strategy.”

The 30-minute monthly money ritual

Instead of obsessively checking your banking app—or avoiding it completely—try a simple 30-minute ritual once a month. Think of it as maintenance, like brushing your teeth.

You can structure that half hour like this:

1. Check in with yourself first. Take three slow breaths. Notice what emotions show up when you think about money: fear, irritation, sadness, determination. Name them without judgment.
2. Open your accounts. Look at your checking, savings and credit cards. Jot down balances and upcoming due dates. Compare your holiday debt balances to last month’s notes so you can see progress, even if it’s small.
3. Review what worked. Did any choices help you this month—bringing lunch from home, saying no to one night out, setting an automatic transfer to savings? Celebrate those, even if your overall numbers still feel heavy.
4. Choose one adjustment. Instead of rewriting your whole budget, pick one change for the next month: cancel a subscription, set a spending cap on food delivery, or schedule an extra $30 payment on your highest-interest card.
5. Close with compassion. Remind yourself: “I’m actively working on this balance. This is progress.” Then put the next 30-minute session on your calendar.

Over time, this ritual turns money from a crisis you only confront when something’s wrong into a regular conversation you have with yourself.

Partner check-ins that don’t turn into fights

If you share finances or a home with someone, holiday debt can easily turn into a blame game. A few simple structures can make those conversations safer.

Set the scene.

Pick a neutral time—not right after work, not at midnight, and definitely not in the car on the way to a family event. Sit at a table instead of lying in bed with statements on a laptop.

Use shared language.

Try phrases like:

• “We ended up with more holiday debt than we feel okay with. Can we look at it together?”
• “I’d like us to agree on a plan for paying these cards down and for how we’ll handle next year.”

Avoid labels like “you’re irresponsible” or “you’re controlling,” which invite defensiveness.

Agree on the facts first.

Before talking about what should happen, look together at balances, interest rates, and which charges were holiday-related. You might realize that both of you contributed to the holiday debt in different ways: one person overspent on travel; the other added a lot of smaller purchases.

Divide responsibilities in a way that feels fair.

Maybe one partner is in charge of scheduling payments and tracking progress; the other leads the search for lower-interest options or promotions. The goal is teamwork, not assigning blame.

If money talks always end in yelling or silence, that’s a strong sign that couples therapy or financial counseling could help you build new patterns.

Protecting next year’s holidays

The most powerful step you can take is to prevent future holiday debt. Once your current balances are under control, you can design next year with more intention.

1. Create a holiday sinking fund.

Estimate how much you’d like to spend next season—including gifts, travel, décor and charity—and divide that number by 12. If your target is $1,200, that’s $100 a month into a separate savings bucket. Many banks let you nickname sub-accounts “Holidays 2026” so you remember their purpose.

2. Plan your calendar, not just your list.

Look at next year’s November and December and mark likely events: work parties, school concerts, religious services, family trips. Each event has hidden costs—outfits, childcare, transportation, contributions to group gifts. Building them into the plan reduces surprise holiday debt later.

3. Set guardrails before the season starts.

You might agree as a household to:

• Use only one credit card for holiday purchases and pay it off by a set date.
• Stick to a maximum gift amount per child or per adult.
• Choose either a big trip or big gifts, but not both in the same year.

4. Align spending with values, not pressure.

Research on money and happiness suggests that how we spend matters more than how much we spend: spending on experiences, on others, and on reducing daily hassles tends to create more well-being than buying more stuff (Dunn, Gilbert, & Wilson, 2011). That insight can reshape holiday budgets—more shared meals and donations, fewer last-minute gadgets.

Over time, these changes can shift the story from “Every year I end up with holiday debt” to “Every year our holidays feel more aligned with what we actually care about.

When to bring in extra support

Sometimes holiday debt is part of a larger pattern: chronic under-earning, growing caregiving responsibilities, untreated ADHD, depression, anxiety or trauma. In those cases, willpower alone isn’t enough.

You might benefit from professional support if:

• You feel paralyzed or panicky whenever you think about money.
• You’re using alcohol, substances, or compulsive shopping to cope with stress.
• Fights about holiday debt or other bills are frequent and intense.
• You grew up around scarcity, instability or financial abuse, and current money issues trigger those memories.

A therapist can’t negotiate your interest rate, but they can help you understand the emotional weight holiday debt carries for you, build skills for tolerating discomfort instead of shutting down, and practice new ways of talking about money with your partner or family.

Ready to break the holiday debt cycle? Connect with care that fits your life

If holiday debt is weighing on you, you’re not just dealing with numbers—you’re carrying worry, shame and the pressure to “fix it” alone. Working with a licensed therapist can give you a calmer, more compassionate space to sort through both the financial and emotional pieces.

At Sessions, you can find mental health clinicians who understand how money stress, family expectations and seasonal depression intersect. Many offer evening and weekend appointments as well as secure online therapy, so you can get support without adding another commute or obligation to your already full schedule.

You don’t have to wait until every card is paid off to feel better. If you’re ready to start changing your relationship with holiday debt—and with yourself—visit Sessions and take the first step toward a clearer, more sustainable plan for next year’s holidays.