The holiday season is many things - joyous, sentimental, and sparkling with festive energy. But cheap it is not.
An October survey from Gallup found that consumers expected to spend around $1,007 during the holidays this year. So it’s good to know what options you have to pay for seasonal spending, an important part of maintaining financial health as you enter 2026.
“As we get closer to Christmas, the pressure to create a ‘perfect festive season’ starts to build,” said Louise Halliwell, group savings director at financial services firm OSB Group.
“But it is possible to enjoy a warm, memorable Christmas without overspending or facing a financial hangover in January.”
Three common options for funding big purchases, no matter the time of year, are savings, low-interest credit cards, and Buy Now Pay Later (BNPL).
Be savvy with savings
For consumers who’ve been fortunate to build up a rainy day fund over the past few years, pulling money from their savings account is perhaps the easiest way to cover the cost of holiday spending. Pairing your savings with a sensible budget further improves this strategy, Halliwell told The Independent by email.
“The first option I always recommend is the simplest: look at what’s already in your current and savings accounts and set your total Christmas budget based on that figure,” she said. “Paying with debit rather than credit helps you stay grounded in what you can genuinely afford and avoids the temptation to overspend when emotions are running high.”
Once you enter the new year, consider setting aside “small, regular amounts” each month for a 2026 holiday fund, Halliwell advised. Not only does it give you some cushion when November and December roll around again, but the accessible cash helps you strike fast on limited-time sales and offers on days like Black Friday and Cyber Monday.
Sign up for a credit card with a 0-percent interest offer
Many credit cards have an introductory offer in which they don’t charge you interest on purchases you make in the first six to 15 months that you own your card, generally speaking.
These types of credit cards can be an easy way to split up $1,000 of holiday spending into smaller payments without interest. For example, $1,000 of purchases spread out over a 12-month 0 percent promotion allows you to split up your balance into payments of less than $100 a month.
The key to 0 percent offers is to pay them off before interest kicks in, certified financial planner Thomas J. Brock told The Independent by email.
“Making a big holiday purchase via a zero-interest loan can be fiscally savvy, assuming you have enough money to pay off the loan prior to the expiration of the promotional period,” he said.
Enroll in a Buy Now Pay Later (BNPL) plan
BNPL plans’ popularity has exploded over the past few years. In fact, consumers used $1.03 billion in BNPL funding on Cyber Monday, according to Adobe online shopping data. The plans are popular for good reason - they’re relatively easy to understand and, in some cases, you don’t pay any interest.
Traditional BNPL plans split your purchase into four payments across six to eight weeks, in many cases. Your monthly payments are bigger than what they’d be if you opened, say, a credit card with 12 months of 0 percent interest, but the upside is that you pay off your balance over six to eight weeks, and, in some cases, no credit check is required to start BNPL.
“When used responsibly, it’s a great way to maintain cash on hand and not build up credit card debt,” bestselling personal finance author Nicole Lapin told The Independent by email. “The added choice and flexibility allow you to manage your budget while keeping cash on hand so December can be calmer.”
Three things to consider when looking for holiday financing
With so many options available for holiday funding, it helps to have a system for deciding which financing option and repayment terms are best for you. Taking a moment during your planning to ask the following three questions might help simplify the process.
Can you pay back what you borrow?
It’s tempting to find a funding option you qualify for and then accept the offer so you can start spending. Before you accept, though, take a minute to consider what your monthly payments will be and how that will affect your budget.
“If shoppers decide they do need to use a form of finance, the most important question is whether they can realistically repay it,” Halliwell said. “That means being clear about your existing financial commitments, understanding the level of risk you are comfortable taking, and knowing whether you’ll have the income in January to cover what you borrow in December.”
If repaying your financing will put you in a tough financial position in the months to come, you may need to find a more affordable way to fund your purchases or re-evaluate how much you want to spend.
Do you have a long-term mindset?
Short-term thinking during this time of the year can put you at risk of choosing a fast but less-than-favorable funding option, such as a store credit card with a high annual percentage rate (APR) instead of a low-interest credit card with 0 percent APR on purchases for 12 months.
If you find yourself rushing your decision, Halliwell suggested focusing on how your decision will impact you in January.
“Taking a long-term view helps shoppers shift their thinking from ‘How can I afford this today?’ to ‘How will I feel about this decision in the New Year?’” she said. “When you picture that moment, you are more likely to be realistic about your spending and less likely to be left with a financial hangover.”
What’s driving your spending?
If you’re like the millions of other people browsing online or shopping in-person for the perfect present, then you’ve likely felt that persistent pressure to spend just a little bit more to level up your gift-giving.
Halliwell challenged shoppers to look past that pressure and think about other factors that may be driving the spending that’s squeezing their wallet.
“It’s also worth questioning what’s driving the cost - is it a genuine necessity, or pressure to live up to expectations?” she said. “Often, thoughtful alternatives, cashback tools, discount codes, or small savings adjustments can remove the need to borrow altogether. Christmas magic doesn’t come from the price tag; it comes from time, generosity, and togetherness.”
