7 ways to reset your money mindset after holiday overspending

The credit card statement arrives in late January, and suddenly the festive glow of the holidays fades to panic. Those spontaneous gift runs, the upgraded dinner reservations, the online purchases — they've all added up to an eye-popping sum.

You're not alone in this moment of financial reckoning.

According to a recent Harris Poll on behalf of the American Institute of CPAs, nearly half (47%)  of holiday spenders planned to take on debt this holiday season, with a majority (79%) anticipating they’d need to use credit cards to make purchases. More than half of holiday spenders said they're unlikely to pay their balances in full, and 17% expect repayment to take more than six months.

The path out of holiday debt starts not with a spreadsheet, but with your mindset. Here's how to break free from the shame spiral and build a sustainable plan for financial recovery.

1. Replace shame with self-compassion

Before you can tackle the debt itself, you need to address the emotions surrounding it. "If shame is too intense, we'll avoid [facing it]," explains Sarah Carr, a certified financial planner and certified financial therapist who runs her own practice in Waverly, New York.

"We're just going to keep pushing that giant ball down the hill, and we will not actually take action steps to change and to pay that off."

Carr recommends approaching your situation with curiosity rather than judgment. Ask yourself what was happening when you made those purchases. Were you trying to create meaningful experiences? Were you responding to family pressure? Understanding the "why" behind your spending helps you move forward without getting stuck in self-blame, she said.

2. Don't ignore the problem

The worst thing you can do is pretend those bills don't exist. Avoidance only compounds the issue, and you’ll wind up with accumulated interest and delinquent accounts.

"Everything you just bought on Black Friday for 25% off, you're now paying 25% in interest on it," notes Erika Wasserman, a South Florida-based certified financial therapist and author of “Conversations With Your Financial Therapist.”

Face the numbers head-on. Pull up your credit card or bank statements, calculate the totals and create a payoff plan immediately. The sooner you start addressing the debt, the less you'll pay in interest in the long run.

3. Create visual accountability

Transform debt repayment into something tangible that the whole family can see and celebrate.

Wasserman suggests using visual tools like progress thermometers that you can color in as you pay down balances. Involve everyone in the process by presenting choices, she added.

4. Reframe your debt

Instead of viewing debt repayment as punishment, connect each payment to the positive experiences that spending created.

"Every time I make a debt payment, I remember what that debt was used to pay for," Carr explained. Whether it was time with family or meaningful gifts, acknowledging the value helps transform the negative energy around repayment into something more positive.

This doesn't mean the overspending was wise, but it does make the payback process more emotionally sustainable.

5. Build a ‘yes’ plan instead of a budget

The word "budget" carries the same restrictive connotation as "diet" — and about the same success rate, Wasserman said.

Wasserman recommends creating what she calls a "yes plan" for 2026. Define what you want to say yes to financially, whether that's paying off credit cards, building an emergency fund or saving for a specific goal.

"That way, it's easier to start saying no to other things when you start saying yes to [your goals]," she explains.

When tempted to make purchases, ask yourself: Is this part of my yes plan?

6. Start planning now for the year ahead

Most people treat the holidays like a pop quiz when they should approach them like a final exam. That’s why you should prepare — and save — all year long.

If holiday spending is important to you, Wasserman advises setting up a dedicated savings fund starting in January. Calculate what you want to spend next year and divide it by 12. Even small monthly contributions prevent the December scramble and lessen the likelihood of overspending.

7. Rethink traditions with intention

Not every tradition needs to continue as-is, and the conversation about change can bring families closer. Sometimes, having direct conversations about your financial situation (and limitations) with family and friends is the best approach to avoid overspending, Wasserman said.

Consider experience-based celebrations instead of gift exchanges, or focus on meaningful handwritten notes, handmade gifts, or shared time rather than purchasing more stuff, she adds. Also, remember that “no” is a complete sentence, but you don’t have to isolate yourself from loved ones if you can’t afford gifts.

Remember: Debt isn’t forever

Breaking the cycle takes time, patience, and consistency. Consider working with a financial therapist through the Financial Therapy Association, or find an accountability partner who's working toward similar goals. Have open conversations with your partner about finances and set expectations early for how much you’ll spend and on whom, and stick to your budget.

"Where you are today isn't a permanent state of being,” Carr said. "You have power, you have agency and the circumstances will change.”