The Traps Retailers Use to Get You to Exceed Your Christmas Budget (and How to Avoid Them)

(Psst: The FTC wants me to remind you that this website contains affiliate links. That means if you make a purchase from a link you click on, I might receive a small commission. This does not increase the price you’ll pay for that item nor does it decrease the awesomeness of the item. ~ Daisy)

As adults, we’ve all discovered the painful truth that it isn’t Santa Claus paying for the big stack of ever-more-expensive presents under the Christmas tree. It’s us, and we’ve learned the hard way that it’s not just the “most wonderful time of the year.” It’s the most expensive time of the year.

Not only do we have to strive to keep up with our family’s expectations, but we are also the targets of retailers who are doing everything they can to get you to exceed your Christmas budget and spend more than ever.  They’re backing up their efforts with science, using surveys and psychological strategies to manipulate customers for more profit.

My family has decided to keep holiday spending ultra-low this year and focus on traditions. (My youngest daughter and I created a book about our plan. You can read more about it here.)

Most people are pulling back.

Instead of battling the Black Friday stampedes, more shoppers than ever before took their spending online. Online sales on Friday hit a record high, while in-store sales were dismal.

Inflation and the high cost of living mean that spending is being curbed by nearly everyone. So marketers are going into high gear to fight it.

Retailers are going to do their best to get you to spend more.

Smart retailers are reading the statistics above, too. Especially in brick-and-mortar stores, where sales are down slightly, they’ll be pulling out all the stops to get you to exceed your budget. According to an article from the National Retail Foundation, “Holiday budgets are set in pencil, not stone.” A survey was conducted to see how people could be persuaded to part with more money than they had originally planned on spending.

The survey discussed how customers were persuaded to spend anywhere from $25-$200 beyond their original budgets. Below, you can see the top five reasons people parted with extra money and the percentage of people who said they’d be likely to do so.

  • A really good sale or promotion: 51%
  • Seeing the perfect gift for someone I didn’t originally plan to buy for: 34%
  • Finding something perfect for myself: 27%
  • Free shipping with no minimum threshold: 27%
  • Needing additional items for last-minute parties: 17%

The article also suggests that convenience, like easy returns and delivery, can make people more likely to spend, particularly people over 65. And finally, expert salespeople can persuade people to purchase more expensive versions of items they are seeking, or even things that were never on the shopping list, to begin with.

The NRF concludes, “Shoppers can be convinced to spend more than they originally budgeted for, but may need a little convincing or inspiration. Retailers can try these tactics to earn more of those spontaneous sales.”

The most important thing you can do is make a Christmas budget and stick to it.

As you can see, retailers and marketers strategize all year long to figure out how to part you from your money. If you are aiming for a simpler holiday season, having financial difficulties this year, or just want to be able to face the New Year without holiday debt looming over your head, it’s essential that you understand the ways they’re trying to manipulate you.

The most important thing you can do is to set a budget – in cash – and stick to it. Below, you’ll find an excerpt from our new book, “Have Yourself a Thrifty Little Christmas and a Debt-Free New Year.” The excerpt discusses how to set a budget that won’t impoverish your family and, most importantly, how to adhere to it.

First of all, you have to create a budget.  It’s easy if you have been putting aside money and saving up for the big event.  Otherwise, see what amount you can spare, and then stick to it.  Never, never, never put Christmas gifts on a credit card!  I can think of no more horrible way to start a new year than opening astronomical bills that are incurring 28% interest.  

Here are a few tips to help you stick to the budget:

  1. Figure out what you can truly afford. 

Many of us don’t have the means for a financial free-for-all with the justification that “Christmas only comes once a year!”  Christmas might just come once, but those credit card bills will keep on coming, every single month until they’re paid off, accumulating interest long after the gift has lost its charm.  Make sure you pay your bills first, put aside a little money for an unexpected emergency, and have a stocked pantry of food before you go and spend hundreds or even thousands of dollars to fuel a 15-minute paper-tearing frenzy on Christmas morning.

  1. Use the envelope method. 

To do this, write the names of your gift recipients on envelopes. You can also include envelopes for groceries, decorations, and charitable giving.  Into each envelope, place the designated amount of cash you intend to spend on each person or item.  When you purchase something, place the receipt and the change into the envelope from whence the money came.  The most important thing: When the money is gone, it’s gone!  You don’t get to top it up or buy one more thing.  This is your limit.

  1. Let the kids know what to expect.  

Ever since my kids were old enough to understand it, I’ve told them what the Christmas gift budget was for that particular year.  If it is $50 each or $200 each, they have known in advance and have made their lists accordingly.  

I’ve been told that this is “mean” and it “takes the magic out of Christmas.”  Honestly, I think it is kinder to let them know what to expect, particularly if it’s a tight year, than to allow them to expect a room full of expensive presents that just magically appeared.  The girls nearly always get what they want for Christmas because they keep their wishes within a budget.  They don’t ask for iPads and XBoxes because those are purchases that exceed the amount we are spending.  Because they know what to expect, they’ve never been disappointed on Christmas morning, and I’ve never been stressed and worried that they’ll be unhappy.


What are your frugal Christmas budget tips?

Do you consider the holidays a free-for-all where spending is concerned? How do you keep spending under control? Are you spending less this year?

Share your favorite tips in the comments below.

The Traps Retailers Use to Get You to Exceed Your Christmas Budget (and How to Avoid Them)
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Daisy Luther

Daisy Luther is an author and blogger. She's the single mom of two daughters and credits extreme frugality and a good sense of humor for her debt-free lifestyle. She is the author of numerous books, the editor of, and is the founder of a small digital publishing company in the emergency preparedness niche.

4 thoughts on “The Traps Retailers Use to Get You to Exceed Your Christmas Budget (and How to Avoid Them)”

  1. Went BF shopping – everywhere was dead and all the major chains had NO sales. This was the worst I’d ever seen this shopping holiday – stick a fork in it.

  2. Home made gifts are the best! Whether it’s fruitcake or a basket put together from thrift store finds, making gifts shows a lot more love and thought process than just buying something. Of course that takes some pre-planning, especially if you make quilts for everyone, but it’s really worth it. And cheaper, at least in terms of money.

  3. I shop all year, and especially at thrift shops. When I see something for a particular person I can get it then, and I keep track on the app Keep Notes. This is year, though, I got several gifts at Aldi (new!) with an eye to prepping: long sleeping bags, flashlights, water canteens.

  4. Crap is crap. I noticed that many products on sale were junk to begin with. The market is flooded with junk from China with inflated retail prices.

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