Using Money Management Tools to Keep Holiday Spending in Check

As the holiday shopping season approaches, many Americans are thinking more carefully about their budgets. In PwC's Holiday Outlook 2026 survey, eight in 10 consumers said they plan to use a budgeting strategy this year. Even so, shoppers expect to spend an average of $708 just on gifts.

Empeople Credit Union says one helpful approach is a sinking fund. Paired with digital banking tools and a practical spending plan, it can help people handle holiday costs without relying on unnecessary debt.

What a sinking fund is and why it helps

A sinking fund is money you put aside over time for a specific expense you expect to face later. The idea may be widely discussed on social media now, but it has been around for years.

Adam Carrier, ongoing financial guidance expert at Empeople Credit Union, compared it to childhood money jars or envelopes. One might be for spending, another for saving, and another for a bigger item you really wanted, such as a gaming device. “A sinking fund is essentially the grown-up version of that,” he said.

Consumers can do the same thing today with separate savings accounts or savings categories. Empeople, for example, offers savings sub-shares that sit alongside a primary savings account, letting members reserve money for different goals.

“Keeping that money separate helps you leave it alone and watch it grow,” Carrier said. “If you automate your contributions, you're building savings without having to think about it every payday.”

Building a holiday budget that fits your finances

Carrier recommends reviewing what you spent during past holiday seasons to get a clearer estimate of what you may need now.

“Think beyond the presents under the tree,” Carrier said. “You've got travel, holiday meals, parties, maybe new clothes for special events. All those little extras really add up.”

After you total the expected costs, divide that amount by the number of months or paychecks you have left to save. If the figure is more than you can reasonably set aside, it may be time to rethink your plans.

“You have to be realistic about what you can afford,” Carrier said. “If the numbers don't work, look for places to cut back. It's better to adjust your holiday plans than spend the next six months paying for them.”

A financial guidance expert at your credit union or bank can also help you review your finances and set a savings target you can work toward gradually.

How digital banking tools can help curb overspending

Digital banking features can help keep holiday spending on course. Depending on your financial institution, you may be able to set card spending limits by dollar amount, merchant category, or location. Real-time alerts can also show you purchases as they happen.

For responsible credit card users, planned purchases may also be an opportunity to earn rewards and save them for holiday expenses or needs later in the year.

“If you're disciplined about paying off your credit card, holiday shopping can be a good opportunity to earn cash back or other rewards,” Carrier said. “You can use money you've already set aside in your sinking fund to pay those purchases off, so you're not carrying a balance and paying interest.”

Redeeming accumulated rewards for cash back, statement credits, or gift cards can also create a little extra breathing room in your holiday budget.

Finally, track what you spend this season and use that information to plan for future years. And don't close your holiday savings account when the season ends.

“Keep putting money into that sinking fund all year long,” Carrier said. “When the holidays come around again, you'll already have a head start.”

This article is sponsored by Empeople Credit Union. Visit their website to explore their financial products and to apply for membership.

The content in this article is educational in nature and should not be considered official financial advice for any specific situation.