6 ways a financial advisor can help with holiday finances


The holiday season is a time of joy, celebration and giving. But for many Americans, it’s also financially stressful.

Over half — 54 percent — of holiday shoppers expect to feel financially burdened during the 2023 holiday season, according to a recent Bankrate survey. Specifically, 25 percent say they’re stressed about the cost of holiday shopping.

Thankfully, with a little planning, you can avoid stress-inducing financial pitfalls, like splurging on gifts or racking up credit card debt. Speaking with a financial advisor at the start of the holiday season is a smart way to set realistic spending limits and ensure your budget is on track.

Here are six ways to help financially prepare yourself for the holidays.

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1. Set a budget

It’s easy to get carried away during the holidays, so creating a budget is essential.

Determine how much money you can allocate to different categories, such as gifts, food, travel and entertainment. By setting spending limits, you’re more likely to make thoughtful, intentional purchases.

Be realistic and prioritize essentials. Consider setting aside a contingency fund for unexpected costs. As you shop, make sure to track expenses so you stay within your budget.

“I think it’s also good to create a list of the people you’re buying for and add a dollar amount next to their name as a limit,” says Jarrod Sandra, a certified financial planner and owner of Chisholm Wealth Management in Crowley, Texas.

Does the idea of creating a budget stress you out? A financial advisor can help you set a realistic budget tailored to your unique situation. They’ll analyze your entire financial picture, including your income, recurring expenses and savings goals, so you can set spending limits that are realistic and manageable.

2. Start saving money now

To ease the financial strain of the holiday season, start saving money as early as possible.

By saving long before Christmas decorations hit store shelves, you can build a financial cushion and reduce your risk of taking on debt. If you tend to go overboard with gift giving, a financial advisor can offer guidance on creating a savings plan.

Sandra recommends stashing your savings in a separate bank account for the holidays.

“Once you’ve come up with your dollar amount for gifts, put that money in a separate account, so when it’s gone, it’s gone,” he says.

3. Look for travel deals

Airfare prices tend to increase after mid-October, according to a 2023 survey by Hopper, a travel app that tracks the cost of airline tickets.

The cheapest days to fly are Christmas Eve and Christmas Day, according to the survey. Travelers departing on these dates are expected to save 26 percent off peak prices, or about $114 per ticket on domestic flights.

If you haven’t booked your flights yet — and you don’t love the idea of traveling on Christmas — it’s not too late to find a good deal. Apps like Hopper and Skyscanner can help. Their algorithms identify the best time to book your flight and automatically track prices for you.

4. Take advantage of sales and spread out your purchases

It’s important to consider when and how you make your holiday purchases. By starting your holiday shopping early, you can lessen the blow to your budget in December.

“People tend to overspend when they shop at the last-minute,” says Trae Bodge, a smart shopping expert. “They’re rushing rather than shopping at a leisurely pace.”

While many stores offer deep discounts on Black Friday, don’t assume the sale price is the best price — there will be sales throughout the season.

“Early October is a sweet spot for deals because of Amazon’s second Prime Day, and competitive deals from retailers like Target, Walmart and Best Buy,” says Bodge.

Sales tend to peak around Black Friday and Cyber Monday, but shoppers will also see sales in December, particularly mid-month. “Take your time, and if you find yourself in mid-December and you still don’t know what to get someone, opt for the safest gift of all – a gift card,” says Bodge.

Trying to decide the best time to make a big purchase? A financial advisor can offer insights on strategic purchasing, ensuring that your must-have gift doesn’t derail your financial plan.

5. Avoid debt and buy-now-pay-later temptation

As credit card interest rates top more than 20 percent, Americans now owe more than $1 trillion on credit cards, according to an August report on household debt from the Federal Reserve Bank of New York.

While credit cards can be a great way to earn cash back and travel rewards, it’s important to avoid carrying a balance after the holidays.

Like credit cards, buy-now-pay-later loans (BNPL) also carry risks.

By lowering the amount you owe today, BNPL loans may tempt you to spend more than if you were using other ways to pay.

“You’re prolonging the inevitable, just like carrying a credit card balance,” says Sandra.

BNPL loans have become increasingly popular in recent years. These options often seem like an attractive alternative to credit cards since pay-in-four plans don’t charge interest. However, you can still face late fees and BNPL users tend to experience more overdraft charges than non-users.

“Using buy-now-pay-later with multiple gifts can get out of control quickly,” says Sandra. “It’s a lot harder to manage 50 BNPL loans than just having a budget and sticking to it.”

If you’re struggling with debt or you’re worried about overextending yourself, a financial advisor can help you establish a firm limit on your credit usage and ensure you follow your plan.

6. Review your investment portfolio before the end of the year

The end of the year is a great time to review your investment portfolio and tax situation.

A financial advisor can discuss your portfolio’s annual performance and guide you through end-of-the-year strategies like tax-loss harvesting and portfolio rebalancing.

Tax-loss harvesting involves strategically selling investments that have experienced a loss to offset capital gains, potentially reducing your tax liability. You can take up to $3,000 a year in losses to offset your normal income, and any unclaimed losses can be carried forward to future tax years.

Meanwhile, rebalancing involves buying and selling certain investments so that your portfolio continues to align with your desired asset allocation and risk tolerance.

Sandra also recommends using the IRS Withholding Estimator to see if you’re on track on taxes.

“If you’re set to get a big refund, you could adjust your withholdings on your paycheck to get an effective increase in your take home pay now instead of waiting for tax time,” he says. “This money can go towards holiday expenses.”

Bottom line

The holidays should be a time of celebration, not a source of anxiety. By enlisting the help of a financial advisor, you can financially prepare for higher costs and increased spending. From setting a budget to reviewing your investments, a financial advisor can help you stick to your long-term goals and set you up for success in the new year.



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