What we spend says a lot about us and we need to talk about Christmas spending in particular. Not because I want to be the Grinch who ruins your festive vibes, but because the research shows we’re collectively terrible at this—and it’s costing us more than just money.
Recent data shows that 74% of Australians set a Christmas budget, but only 29% actually stick to it. Meanwhile, 44% regret their spending from previous years. Americans are planning to drop $1,107 per person this holiday season—up $182 from last year—and 31% are still paying off last Christmas on their credit cards. If that doesn’t make you slightly queasy, you might want to check your pulse.
But here’s where it gets interesting: the latest research on mindset and emotional intelligence suggests the problem isn’t just that we overspend—it’s why and how we overspend. And understanding these psychological patterns might be the difference between January financial regret and actually enjoying the holidays.
Your Personality effects how you spend
Research published in Social Psychological and Personality Science analysed over 2 million transactions from 2,133 people and found something fascinating: emotionally stable people spend more at Christmas, while those high in neuroticism spend less. Those with artistic interests (high openness) actually spend less during the holiday season.
Translation? Your personality traits are literally driving your spending patterns without you realizing it. If you’re conscientious, you’re likely spending more. If you’re neurotic, you’re holding back. Neither approach is inherently good or bad—but both happen on autopilot.
Here’s the kicker: research from the University of Skövde shows that financial anxiety triggers a brutal cycle—stress drives impulsive spending, which creates more financial problems, which causes more anxiety, which drives more spending. It’s a psychological doom loop, and 28% of Americans report feeling more holiday stress this year than last.
The Fixed Mindset and the Money Trap
Carol Dweck’s groundbreaking research on mindsets—the difference between believing your abilities are fixed versus believing they can grow—has massive implications for how we spend at Christmas.
People with a fixed mindset tend to see their financial situation as unchangeable. “I’m just bad with money” becomes a self-fulfilling prophecy. They avoid looking at their spending because failure feels like proof of their limitations rather than useful feedback. Research shows that people with fixed mindsets literally show no brain activity when reviewing their mistakes—their brains essentially shut down when confronted with feedback.
Applied to Christmas spending, this means:
- You avoid checking your bank balance because it feels threatening
- You rationalize overspending as “that’s just how I am at Christmas”
- You don’t track your purchases because you “already know” you’ll fail at budgeting
- You see others who stick to budgets as having some innate ability you lack
Meanwhile, someone with a growth mindset views their spending habits as learnable skills. They see overspending as data, not destiny. They track, adjust, and improve.
Emotional Intelligence: The Real Christmas Superpower
Research on emotional spending reveals that our ability to manage emotions is directly linked to lower materialism and less compulsive buying. Emotional intelligence isn’t some fluffy concept—it’s about financial awareness, recognizing your triggers, and making decisions from clarity rather than panic or pressure.
Unfortunately, global emotional intelligence scores have declined for four consecutive years, with wellbeing dropping 5.3%. We’re in what researchers call an “emotional recession,” characterized by low wellbeing and high burnout. This matters for Christmas spending because when emotional intelligence is low, spending becomes a coping mechanism rather than a conscious choice.
A study from Norway and the UK identified three components driving Christmas spending behaviour: financial concerns, indulgence, and social aspects. The researchers found that people’s relationship with the “meaning of Christmas” predicted their propensity to spend and borrow. If Christmas means proving love through expensive gifts (fixed mindset) versus creating meaningful connections (growth mindset), your spending will reflect that belief system.
What The Data Actually Tells Us
Let’s look at what people are actually doing this year:
In Australia, spending intentions are up, with the average person planning to spend $1,140—a 14% increase from last year. Young Australians aged 18-24 are leading the charge, with 59% planning to increase their budgets. But here’s the twist: 78% of Australians say they’re adjusting their spending to stretch budgets, and there’s been a notable shift from credit cards (down to 40%) to debit cards (up to 56%)—suggesting people are trying to spend within their actual means.
In America, PwC’s 2025 Holiday Outlook reveals a “value-first consumer mindset.” Despite planning to spend slightly less on average ($1,552, down 5%), 63% say they wish family traditions were less focused on gifts—yet only one in five have actually discussed cutting back. That gap between desire and action? That’s where emotional intelligence comes in.
Europeans, particularly in the UK and Norway, are showing similar patterns—high financial concerns coupled with social pressure to maintain traditions, creating what researchers call “propensity to spend and borrow at a time of high pressure.”
The Growth Mindset Approach To How You Spend
Here’s how to apply growth mindset principles and emotional intelligence to actually spend wisely this Christmas:
1. Reframe Your Financial “Failure”
Instead of “I’m terrible with money at Christmas,” try “I’m learning to align my spending with my values.” Research shows that reframing effort as part of the learning process rather than evidence of inadequacy changes both brain activity and behaviour. Your past overspending isn’t proof you’re broken—it’s data about what didn’t work.
2. Use The 20-Second Self-Compassion Hack
A 2024 study in Behaviour Research and Therapy found that placing one hand on your heart and one on your belly for 20 seconds as a reminder to be self-compassionate improves mental health and reduces stress and anxiety. When you’re feeling pressure to overspend, take 20 seconds to ground yourself. It’s ridiculously simple and surprisingly effective.
3. Question The Meaning You’ve Attached To Christmas
The Norwegian-UK research showed that how people conceptualize Christmas—financial concerns, indulgence, social aspects—predicts their spending. What does Christmas mean to you? Really? If it means “proving I’m a good parent/partner/friend through expensive gifts,” that’s a fixed mindset belief you can challenge. If it means “creating warm memories and feeling connected,” your spending might look very different.
4. Track Without Judgment
People with growth mindsets process mistakes as learning opportunities while fixed mindsets avoid feedback entirely. Set up a simple tracking system—notes app, spreadsheet, whatever—and record every Christmas purchase. No shame, no judgment, just data. The act of noticing builds emotional intelligence and interrupts autopilot spending.
5. Challenge Your Personality Defaults
Remember that research showing personality traits predict spending? If you’re high in neuroticism, you might be restricting spending out of anxiety rather than wisdom. If you’re conscientious, you might be overspending because you think you “should.” Awareness of your default patterns lets you make conscious choices instead.
6. Focus On Experience Over Things
Australian data shows a major shift toward experience gifts—holidays and events over physical presents. This aligns with emotional intelligence research: experiences create connection and memories without the material burden and environmental impact of more stuff. Plus, experiences can’t be compared on price tags, which reduces the competitive spending that drives so much holiday stress.
7. Have The Actual Conversation
63% of Americans wish family traditions were less gift-focused, but only 20% discuss cutting back. This is emotional intelligence in action: the courage to have an uncomfortable conversation. “Hey family, what if we drew names this year?” or “What if we focused on one thoughtful gift instead of multiple obligatory ones?” Most people will be relieved—they’re thinking the same thing.
8. Build Your Resilience Muscle
Research on emotional intelligence and wellbeing shows that emotional skills are learnable. Each time you pause before an impulse purchase, you’re literally building new neural pathways. Each time you feel the pressure to spend and choose differently, you’re strengthening your financial resilience. This isn’t about deprivation—it’s about building the capacity to choose wisely.
The Bottom Line (Pun Intended)
Your spending patterns are influenced by personality traits you didn’t choose, emotional intelligence skills you can develop, and mindsets you can shift. The difference between January regret and January peace isn’t about having more money—it’s about bringing consciousness to the process.
Australians will collectively spend over $72 billion this Christmas season. Americans will drop $242 billion. Europeans aren’t far behind. That’s a lot of money flowing toward…what exactly? Obligation? Love? Social pressure? Genuine joy?
The wisest Christmas spending isn’t necessarily the least spending—it’s spending that aligns with your actual values, contributes to genuine connection, and doesn’t leave you stressed and broke in January.
47% of Americans cite financial struggle as a major holiday stressor. 46% say it’s grief over lost loved ones. Here’s a thought: maybe the best gift we can give ourselves and others is to stop pretending expensive presents equal love, recognize that our worth isn’t measured by our spending, and focus on the things that actually create meaningful memories.
You don’t need a massive budget or extraordinary willpower. You need awareness of your patterns, compassion for your struggles, and the willingness to question the stories you’ve been telling yourself about what Christmas “should” cost.
So this year, before you click “buy now” or swipe that card, pause. Ask yourself: “Am I buying this from a place of genuine intention or from anxiety, obligation, or autopilot?” That moment of awareness—that’s emotional intelligence. That’s the growth mindset in action.
And that’s how you actually spend wisely this Christmas.
