Use AI to set spending caps. Split your budget by category and add rules like “no gifts over $40”
Add hard-stop banking alerts. Turn on every-transaction notifications and a “holiday” spending cap
Shop on a schedule. Plan your buy windows and stick to 1–2 purchase days to avoid impulse spending
If your December routine often includes a weekly “why did I even buy that?” panic, you’re not alone. Holiday overspending has a way of sneaking in through dozens of small purchases. But new data suggests that one group is actually getting better at dodging the overspend trap and it just might surprise you, it’s Gen Z.
TD Bank’s 2025 Merry Money Survey found that 88% of Gen Z respondents are considering ways to limit holiday overspending. And the modern twist is that more than half (51%) of Gen Z budgeters are using AI to help build that holiday budget.
So, what are the lessons we can take away from Gen Zers? The bottom line is you don’t need to be born between 1997-2007 or an AI power user to copy what they’re doing.
The Gen Z holiday spending playbook you can steal
1. Use AI to plan the budget, not to “shop smarter”
AI is great for helping you plan and coming up with a shopping list full of gift ideas that are within your budget. Consider these prompts that Gen Z is taking full advantage of:
- “Make me a holiday budget for 12 people with a $600 cap, including stocking stuffers, hostess gifts, and wrapping.”
- Then ask for a budget breakdown with what percent should go for gifts, food, travel, etc.
- Example: “If my holiday budget is $1,000, tell me what percent (and dollar amount) should go to gifts vs. food vs. travel vs. donations.”
Then take the output and put it somewhere like your notes app, a spreadsheet, or your banking app’s budgeting tool. The point is not the AI specifically, but getting an actual number you will follow.
Pro tip: If you want AI to actually help you save money, tell it your specific rules. Examples include: “No gifts over $40. Two gifts max per kid. Include three backup gift ideas under $25.”
2. Set “hard stops” with alerts
Let’s face it, most budgets fail because they don’t have enough 'tough love' built into them. To that end, it’s time to use some techy options that most banking and credit card apps have built into them.
Consider setting up these automatic tripwires:
- Set a spending alert on your card for every purchase over, say, $50.
- Set a monthly cap alert for your total “holiday” category.
- Turn on notifications for every transaction for the month of December so you can better track your spending.
3. Time your shopping like Gen Z
The survey found young shoppers are intentionally planning around big deal days like Black Friday and Cyber Monday.
That doesn’t mean you should buy everything on Black Friday next year. It means you should decide when you’ll buy each category:
- Tech and appliances: you can often find deals before Black Friday and in the last week before Christmas.
- Toys: buy them earlier than you think, starting in late October, keep in mind that the hot toys of the season tend to vanish come December.
- Stocking stuffers: great deals can be found last-minute.
- Gift cards:only from secure displays and only when you know you’ll use them soon.
Pro tip: If you’re the type who keeps browsing “just to check,” you’re paying the scrolling tax. Consider having just two planned purchase days and stop shopping in between those days.
4. Copy the “set aside money all year” trick
The survey also reported that Gen Z is more likely to stash money earmarked for the holidays throughout the year.
While it may be a little too late for 2025, you can easily set this up for next December:
- Open a separate savings bucket labeled “Holiday.”
- Auto-transfer a small amount daily or weekly.
Even a few bucks a day will become a significant amount of money come next holiday season. Money you can use for gifts, travel, and decorations. Plus, you’ll completely avoid that January credit card bill moment of panic.