Why we repeatedly spend beyond our means at Christmas

Every year, as Christmas adverts begin their glittering parade across our screens, many of us feel that familiar sense of dread; that this year will cost more than we can comfortably manage. But why do we do it to ourselves? 

We promise we’ll spend less, keep it simple, focus on what matters. Yet December arrives, and the to-do lists and temptations multiply. Here, Dr Jane Brown, Lecturer in Marketing at Newcastle University Business School, explores why so many of us overspend at Christmas, and what this reveals about care, identity, and social belonging.

You’re not alone 

If this feels familiar, you’re not alone. My research on affording social rituals explores why people feel compelled to spend, even when they know it causes financial stress. Overspending on social rituals is rarely about impulse or ignorance. It’s about the social meanings of care, competence and belonging, and how failing to perform them risks being stigmatised. Many take on hidden debt to avoid visible judgement.

Last year a YouGov poll by StepChange Debt Charity found that 28% of us struggled to afford Christmas, particularly those with children. 8% of us borrow credit to pay for it, with a further 3% not celebrating Christmas at all due to cost. The Bank of England estimated that households spend an additional £700 in December, bringing the average outgoing to over £3,100.These figures look set to rise this year.

Where the pressure comes from 

The pressure to spend builds through a mix of cultural, social, and emotional forces that quietly shape what we believe a “good Christmas” should look like. 

1. The media and marketing machine

Months beforehand, retailers are already selling us everything we ’need’ for the perfect day: perfectly curated decorations, matching tableware, a mountainous spread of special food, coordinated novelty jumpers (including pets!), piles of gifts. 

Retailers sell more than products; they sell belonging. 

Advertising fuses consumption with emotions such as joy, generosity, and nostalgia – implying that if you buy the right things, you’ll buy happiness itself. Even festive films redeem misers through spending, reinforcing that ’good’ people give lavishly. These cultural cues normalise overspending.

2. The gaze of others

We worry about how others notice and judge our efforts at Christmas. Many participants described fearing the judgement of parents or in-laws with their own traditions and high expectations, keeping up with the neighbours who often had extravagant trees or decorations prominently displayed for all to see, or work colleague’s chatter about holidays and plans.

Significantly, Children seeing festive adverts and comparing gifts or activities at school created the most pressure amongst participants. Visible participation signals normalcy, competence, generosity, even love. Not joining in or doing Christmas minimally, risks feeling like a social failure.

3. The social media mirage

Add the digital gaze, and the pressure intensifies.

Social feeds overflow with curated festive perfection and a visual manifestation of happiness. This could be trips to the panto, Christmas breakfast with elves, ice skating, matching jumpers, Christmas markets, or visits to Santa’s grotto. Behind the smiles may lie exhaustion, debt or conflict, but the effect is a raised bar of what ‘normal’ looks like. We end up comparing our reality to other people’s highlight reels, and spending to close this imagined gap.

4. Roles in society and gendered expectations

Parents described wanting to create a ‘magical’ Christmas because either their own childhoods were modest, and they wanted better for their children, or because they have fond memories and want their children to have those too.

For many families, women carry the emotional and logistical weight of making Christmas happen – planning, shopping, wrapping, cooking, smoothing tensions, ensuring everyone else is happy. This unpaid labour of love becomes entwined with identity – and it is costly, both financially and emotionally.

Why it’s so hard to say no 

In this web of gazes and expectations, saying no can feel transgressive. People worry what others will think, or how it might reflect on them as parents, partners or friends.

Non-participation isn’t neutral, it’s visible, but debt – especially at first – is not. To protect themselves from visible stigma, participants chose the hidden stigma of debt – borrowing through credit cards, overdrafts, Buy Now Pay Later offers, pawning, payday loans, or even loan sharks, all the while knowing these credit source’s dangers.

Debt becomes a strategy for social belonging

The guilt is softened with justifications like; “It’s only once a year”, or “It’s for the kids”. These are not excuses but coping strategies, which are ways of making sense of competing values: love, duty, the fear of letting others down, and our hopes for managing our own identity.

Resisting, reframing, and reclaiming joy

Breaking these patterns doesn’t mean rejecting Christmas or denying joy. It means noticing the pressures that shape our choices, and deciding which ones we want to prioritise. 

1. Name the pressure

The moment you feel compelled to buy, pause and ask: Where is this coming from? Is it comparison? Guilt? The voice of a TV advert, a parent, a neighbour? Naming the source helps separate needs from socially scripted obligation, and allows us to think more carefully about our motivations to buy. 

2. Replace ‘perfect’ with ‘enough’

One notable aspect of Christmas is the one-upmanship from year to year – wanting each year to be better than the last. This creates an aggressive cycle of increasing stress and spending that spirals out of control in the pursuit of perfection. ‘Perfection’, however, is a moving target, while ‘enough’, is achievable. Enough might be one thoughtful gift instead of several, or a shared meal that’s simple but unrushed. Choosing ‘enough’ reclaims control and keeps care at the centre of celebration.  

3. Destigmatise the hidden stigma

Talk openly about Christmas costs with friends, colleagues, even children. When we share the reality behind the façade, it dismantles shame. Others often feel the same relief. One participant talked about the stress of buying gifts for her siblings, their partners, and their children. When she spoke to her siblings about it, they admitted similar feelings, so they now have capped exchanges for their nieces and nephews, and don’t exchange presents with each other.  

4. Focus on memory, not money

In interviews, people often discussed the idea of borrowing money as being a short-term fix that enables long-term memories. The truth is, that short-term fix is potentially problematic in itself, and can spiral for months, or even years afterwards. Participants mentioned finally paying off Christmas debts by September, then borrowing again in November and repeating the cycle.

Memories don’t need to be expensive. What we remember is how we felt – the laughter, the rituals, the time spent with others. Memories of connecting together; wearing matching festive socks, playing boardgames or video games, going to a park or for a walk, or watching a film at home with a picky tea, were memories that participant’s talked about when asked about their own Christmas experiences.

5. Protect your wellbeing

Debt, guilt and exhaustion can steal the joy they were meant to secure. Choosing to rest, to budget realistically, or to scale back isn’t failure; it’s care in another form. If you can minimise your festive financial hangover, future you will thank you.

Budgeting doesn’t need to be extreme. Can you pick a non-branded item over a branded item? Do you need all the little gifts that get used for a couple of minutes, then left for ages and end up lasting hundreds of years in landfill? Are there any outings with friends or family that could be combined, or instead of separate trips out, could everyone meet up for an outing to a local farm, café or museum? If there are several ticketed events that would be lovely to attend, do you have to do them all? Can you re-use last year’s jumpers and decorations?

6. Borrow, but be aware of the Terms and Conditions

Borrowing money at Christmas is sometimes inevitable. However, a big problem with credit often being seamlessly available, often through slick app interfaces, is that consumers often don’t look at the Ts&Cs, and don’t shop around. This often results in higher repayments than necessary, and can spiral into unmanageable debt and experiences with bailiffs and bankruptcies. Always be aware of the interest rate and what you will be paying back, the repayment period, and what happens if you miss a payment. All interest rates are given as an annual percentage rate (APR), but variations in the repayment period can cause these to appear difficult to work out.

The following shows a table summarising typical credit products, and illustrative details of repayments. The last column assumes one missed repayment, which would be one extra month of interest, plus a typical late penalty/fee.

Important caveats

The ‘monthly interest‘ figures assume the full £100 is outstanding each month and that interest is simply APR ÷ 12. Real calculations often use reducing balance, fees, compounding, minimum payments, etc.

For products like guarantor loans, overdrafts and payday loans, the exact late fee may vary, may include additional charges, and sometimes the lender may accelerate the debt (demand full repayment) rather than just a simple late fee.

Missing a repayment may also trigger additional interest rate increases, loss of promotional rate, immediate repayment demands, credit report impact — which are not captured in this table.

It’s important to note that this table considers a loan of £100 for simplicity. To illustrate on the scale of what the average family spends additionally in December (as previously mentioned), the total amounts paid back on £700 assuming no missed repayments/late fees, would be:

• Credit card: £952.00
• Store card: £944.99Guarantor loan: £1539.88
• Arranged overdraft: £962.56
• Payday loan: £772.92
• Buy Now Pay Later (BNPL interest free promo): £700

Please note that although BNPL options appear to be the best value, many cap at two missed repayments before defaulting to account restrictions, damaging your credit score, and sending your debt to a collection agency, so those can spiral quickly if not carefully managed.

Additionally, BNPL loans tend to be smaller, so in most cases, to have £700, or even £100 of this credit, would usually be through having multiple loans – known as ‘debt stacking’ – which would incur late fees per loan, rather than just the one used in the table. So, on a £700 debt, made up of fourteen £50 BNPL loans, that would incur late fees of £70. And finally, BNPL credit is currently unregulated, so consumers are not protected in the same way with other forms of debt, such as access to the Financial Ombudsman Service for complaints.

A gentler kind of Christmas 

The desire to make Christmas special comes from love, not greed. But love shouldn’t require self-sacrifice or secrecy. When we notice pressures from tv and radio campaigns, social comparisons, and the emotional labour, we make space for more honest, considered, and inclusive celebrations.

Perhaps the most meaningful gift this year is permission: to do less, to spend less, to stop measuring worth in wrapping paper and receipts. You can still splurge on the things you prioritise as important, but you need to work out what those are for you – and they’ll be different for everyone. Small changes like downgrading from a premium brand to a mid-range brand, or keeping track of all the ‘little treats’ bought as stocking fillers, can save important pounds.

Although the temptation is to be visible (to be seen to be conforming) by concealed means, for a few days of escapism and extravagance, it creates the potential for significant longer-term financial stress and anxiety. A key idea is to find the line between doing and affording Christmas.

So, feel confident reigning back on a few of the extras this year – many other people are in the same situation. Future you will be happy you chose balance over burnout.

The views expressed here are for educational purposes only and do not constitute financial advice. Always consult a licensed adviser for guidance tailored to your situation.

You might also like… 

• find out more about the author, Dr Jane Brown, Lecturer in Marketing

• explore the work done at Newcastle University’s Business School 
• find our more of Jane’s thoughts on overspending at Christmas at The Conversation: ‘Six ways to avoid a festive financial hangover’