Holiday Sales Are Projected to Top $1 Trillion — Here’s How To Pay for Your Buys
Holiday shoppers are about to spend more, even as groceries and rent take a bigger bite out of their paychecks. Retailers are counting on it. But gift-buying is the easy part. The hard part arrives in January, when the credit card statements do.
A holiday hangover is fixable. You don’t need a total budget overhaul or a vow to never buy anything fun again. You need a clear look at the damage and a plan to get back on track before the new year gets expensive.
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Spending Is Up -- Comfort Isn’t
The National Retail Federation projects November and December sales of $1.013 trillion, up 4.2% from $972 billion in 2025. That’s faster growth than last year’s 3.1%.
Bain & Company forecasts even stronger growth, at 4.5%, but expects inflation to drive more than half of that increase. The distinction matters because retailers can post higher sales while shoppers feel squeezed by everyday costs.
Consumer spending accounts for roughly two-thirds of U.S. economic activity, so holiday shopping is a useful gauge of economic health.
As Eric Mangold, founder of Argosy Wealth Management, put it: “When we see figures that predict this increase, it means that people are in a position to spend more during the holidays, which is great for the economy as a whole, including the businesses that are seeing increased sales.”
Strong spending doesn’t mean shoppers are financially comfortable, though. The ICSC’s 2026 Holiday Intentions Survey found that 49% of consumers are worried about affording gifts, and 23% expect to carry their 2026 holiday debt into 2027.
Assess the Damage
Nobody likes to see a big bill, but the first step in getting finances under control is to know what you’re dealing with.
“Pull the credit card balances, look at what’s due in January and get a real number on paper,” said James Comblo, partner at Prosperity Capital Advisors.
Once the damage has been totaled, put a plan in action.
“January is what I would call a now-bucket problem; it’s about cash flow and liquidity, and the goal is to keep a short-term mistake from reaching your longer-term savings and retirement plan,” Comblo explained.
Protect the Essentials First
A large credit card balance can give anyone anxiety, but before tackling it, taking care of essentials first is key.
“I always say we need to protect the needs first: housing, utilities, groceries, nothing fancy, just what keeps life running,” said Comblo.
Then build a cash buffer before throwing leftover money at debt.
“I don’t want someone to put every available dollar toward debt payoff and then finance the next car repair on the same card,” he said. “For most families, roughly one month of essential expenses is a reasonable starting target, though the real amount varies for every person or family.”
Attack the High-Interest Debt
Once the essentials and buffer are covered, go after your highest-interest balances. Comblo suggested calling your card companies to ask for a lower rate. If the numbers add up, look into balance transfers or consolidation loans. Pay close attention to transfer fees, the length of any promotional period and what the rate becomes once the promo ends.
Make Temporary Budget Cuts
Temporary cuts in January can help you catch up without falling behind on bills, savings or investments.
Comblo recommended picking three categories you can scale back without wrecking your life. Eating out, food delivery and entertainment are solid starting points. Then go hunting for the sneaky stuff.
“I also tell people to go look for invisible spending because it’s rarely one giant expense that blows the budget,” he said. “It’s $25 here, $40 there, a few forgotten subscriptions and online purchases you barely remember clicking.”
Plan Ahead for Next Season
It’s easy to turn the holidays into a months-long problem that rolls into the next year, but that can be prevented. Comblo recommended following these steps next time around:
Decide where the important dollars go before you spend the discretionary money.
Protect the essentials and maintain the cash reserve.
Direct the remaining recovery dollars toward high-interest debt.
Then spend what’s left.
Overspending during the holidays is stressful, but beating yourself up won’t balance the books. Mangold’s advice is perfect here: “Simply realize it’s time to get back on track.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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