Why Do We Spend and Borrow at Christmas? Stress, Wellbeing and Mindful Gifting

Christmas is meant to be a time of joy, but for many people it is also a time of financial pressure and stress. According to Deloitte ConsumerSignals’ European Holiday Outlook 2025, 30 % of European consumers consider the Christmas period stressful, and 34 % say the same of Christmas shopping. Why do people spend, and sometimes borrow, despite this pressure? This article looks at what psychological research says about Christmas spending and wellbeing. It also considers the family tensions that can add to the stress, and what all this suggests for making the season less stressful.

Evidence note: These studies, advice and surveys took place in different countries and years using small groups of people. They show that things are connected, not that one causes the other.

Why Do People Spend and Borrow at Christmas?

McNair, Nyhus and Ranyard examined Christmas spending and borrowing in two surveys: one in the UK in 2013, with 190 participants, and one in Norway in 2016, with 234 participants. The studies found that people who valued money and possessions, or saw Christmas as a time to treat themselves, were more likely to spend. People facing financial hardship were less likely to spend, but more likely to borrow.

Adding psychological factors explained about 30 percentage points more of the variation in how much people were likely to spend. However, the study shows a link, not proof that these factors caused the spending.

There were also differences between the countries. In the UK, negative emotions were associated with both spending and borrowing, and having more children was associated with a greater propensity to borrow. In Norway, only lower positive affect was associated with spending among the affect measures; gift motivation was measured only in Norway, where giving gifts out of obligation was linked to higher spending, although this link weakened once borrowing was taken into account.

The authors also note that some Norwegian scales had lower reliability, so the UK-Norway comparison should be treated with caution. The samples were not nationally representative and were predominantly female.

Christmas and wellbeing

Christmas stress is not only financial: accounts from 1930s Britain already describe the holiday as burdensome or emotionally false, although Mass Observation volunteers were not representative of the wider population. Media reports and advice from Germany, France, Italy and the UK similarly describe how family gatherings, and questions about study, children or relationships, can revive old conflicts and intensify difficult emotions. Mental Health UK and Lancashire Mind therefore recommend setting boundaries and limiting commitments, which does not mean that every family gathering is harmful.

In a 2002 study, Kasser and Sheldon surveyed 117 people aged 18 to 80 about their satisfaction, stress and emotional state during the Christmas season, as well as their experiences, use of money and consumption behaviour. Participants reported more happiness when family and religious experiences were particularly important to them, while lower wellbeing was linked to the dominance of spending money and receiving gifts. Environmentally conscious consumption also was associated with a happier holiday, as did being older and male. The authors concluded that the materialistic aspects of modern Christmas may undermine wellbeing, whereas family and spiritual activities may help people feel more satisfied.

We would agree that materialistic aspects may undermine wellbeing. We would also add that friendships and chosen family, as well as biological family, may help people feel happier, and that spiritual activities do not necessarily need to be tied to Christian practices.

Mindful Gifting: Reducing Christmas Excess, Not Gifts

Returning to spending, some researchers have also proposed an alternative to excessive gift-giving, which does not require giving up the ritual itself.

Branco-Illodo, Heath, Otnes and Givi reviewed 85 articles on gift-giving and mindful consumption in general. They define mindful gifting as an approach in which givers and recipients consider the impact of a gift on themselves, society and the environment before, during and after the exchange.

The review identifies three themes: caring awareness towards the self, society and the environment; managing tensions between these forms of care; and strategies for gifting temperance. The authors argue that mindful gifting does not necessarily mean giving less, but rather curbing excess and approaching gift-giving with greater awareness and intention.

What this means for your Christmas

The research reviewed above is largely correlational, so none of it guarantees a particular result. Even so, several findings point to practical ways of making Christmas less stressful and less costly.

Set a budget in advance. In both of McNair, Nyhus and Ranyard’s surveys, people who managed their money more proactively were less inclined to borrow at Christmas. Deciding in advance how much to spend is one way to put this into practice. In a 2025 Croatian survey by JaTrgovac, for example, most people who planned to buy presents intended to spend no more than €50 or €100 in total.

Notice why you are buying. In the Norwegian survey, giving gifts out of obligation was linked to higher spending, while in the UK survey people who felt more negative were more inclined to spend and to borrow. If a purchase is driven by obligation or by a low mood, it may be worth pausing before paying. The authors suggest that finding socially acceptable ways of breaking the cycle of reciprocal gift-giving may help people in a strained financial situation. One option, in our view, is agreeing with relatives to set a limit or to give fewer gifts. The mindful-gifting review also notes that overspending can make recipients uncomfortable if they cannot reciprocate, and that givers sometimes need to borrow money to buy gifts.

Set boundaries. Mental Health UK and Vanity Fair Italia notes that family gatherings can intensify difficult emotions and recommends setting boundaries, limiting commitments and communicating openly about what feels manageable. Lancashire Mind similarly suggests limiting the number of gatherings, agreeing time limits and avoiding topics that may cause conflict. This does not mean avoiding family altogether, but deciding in advance how much time, money and energy you have for each commitment.

Put people before presents. According to Kasser and Sheldon, those for whom family and religious experiences were especially important reported more happiness, while lower wellbeing was linked to spending money and receiving gifts being the main focus of the holiday. This does not mean that gifts should be abandoned, or that everyone should spend the holiday with relatives. The study focused on family and religious experiences, but the same logic may apply to close friends. What seems worth protecting is time spent on meaningful relationships, on terms that feel manageable to you.

Give thoughtfully, not necessarily less. According to Branco-Illodo, Heath, Otnes and Givi, mindful gifting means considering how a gift affects oneself, society and the environment, and it does not necessarily mean giving less. The review reports that givers often misjudge what recipients want, for example by underestimating how much recipients appreciate gifts they have explicitly requested, and the authors emphasise that recipients should openly share their views about gifts so that unwanted ones can be avoided in the future. It also notes that spending more does not necessarily show more care: recipients may become suspicious of the giver’s motives, and some givers end up borrowing money to buy gifts. Studies summarised in the review suggest that gifts with sentimental value or a personal touch, such as heirlooms, customised gifts or gifts with a story, may strengthen relationships without high spending. In public commentary on the paper, Otnes has also suggested considering experiences instead of objects.

Finally, if Christmas feels stressful, you are far from alone. Deloitte found that 30 % of European consumers see the festive period as stressful and 34 % say the same of the shopping.

Conclusion

Research suggests that Christmas spending is associated not only with income and budgets but also with psychological factors. Material values, seeing Christmas as a time for indulgence, mood and a sense of obligation are associated with a higher propensity to spend, while financial hardship is associated with a higher propensity to borrow. Kasser and Sheldon’s study points in a similar direction, linking family and religious experiences to greater wellbeing and a focus on spending and receiving gifts to lower wellbeing. Family gatherings can add to the stress, so setting boundaries on what feels manageable may matter as much as setting a budget. Mindful gifting offers a way of reducing excess without giving up the ritual itself. Because the studies are small, come from different countries and years, and show associations rather than causes, these findings should be treated as indicative. Still, they suggest that planning a budget, noticing why we buy, setting boundaries, protecting time with loved ones and giving more thoughtfully may make Christmas less stressful.

Sources:

McNair, S., Nyhus, E. K. and Ranyard, R. (2024). “Propensity to spend and borrow at a time of high pressure: the role of the meaning of Christmas and other psychological factors.” Frontiers in Behavioral Economics, 3:1385609. https://doi.org/10.3389/frbhe.2024.1385609

Branco-Illodo, I., Heath, T., Otnes, C. and Givi, J. (2025). “Defining and Delineating Mindful Gifting: A Review and Research Agenda.” Psychology & Marketing, 42(11), 3043–3056. https://doi.org/10.1002/mar.70027 

Kasser, T., Sheldon, K.M. “What Makes for a Merry Christmas?” Journal of Happiness Studies, Vol. 3, 313–329 (2002). https://doi.org/10.1023/A:1021516410457

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