12 Tips for Avoiding the Holiday Debt Trap

Ho, Ho, Hold holiday debt this year while still celebrating the season in style. Start now getting control of your holiday budget with these tips.

Every year, we vow to stick to a holiday budget. And every year, we blow it like Santa after a 36-hour no-cookie diet. We dread the holiday bills, the overdraft fees and the last-minute trips to the mall that empty our wallets and rack up the credit card charges.

Take charge of your holiday budgeting! By planning ahead, you can celebrate the season in style without ending up in debt. Here are ways to curb spending and stay on track.

1. Plan Your Budget

Make sure you include all those little extras like decorations, extra postage, the kids’ holiday outfits, family photos and entertaining costs.

2. Make a Gift List

List all of the people you want to buy gifts for. Jot down any gift ideas you may have.

3. Shop Early

Tackle the out-of-town recipients first so you can ship presents early. The earlier you send, the cheaper the rates.

4. Shop Like Scrooge

Have a plan before you step foot in a store or go online. Shop around for the best deal on popular items or must-have electronics. With the internet, comparison shopping has never been so easy.

5. Combine and Conquer

If you and your brother never know what to get Mom and Dad, pool your resources and get them one nice item. 

6. Pass the Hat

Large families have practiced this for years, but it is still a great idea. Draw names, so each person is only in charge of one present.

7. Consider Setting Money Limits

You may want to set a monetary limit to keep things fair and equal, especially with younger children.

8. Have Kids Make a Three-Gift Wish List

A good rule to follow is: one gift they really need, one gift they really want and one educational gift like computer games or books. With all the other presents from friends and family members they will receive, they won’t be deprived.

9. Dip Into Savings Rather Than Pull Out the Plastic

Okay, let’s say your budget is getting pretty thin.

It is better to withdraw money from savings, even if it’s earning 3% – 5%, rather than putting it on an 18% to 29% credit card. Unless, of course, you know you can pay the bill in full in January.

10. Give the Gift of Time

It doesn’t cost a cent to make up coupons for things like a backrub at the end of a stressful day, an offer to pick up the dry cleaning, a special movie night, a dinner out or other treats for friends and loved ones. You could even make a coupon book, one for each month.

11. Shop the After-Christmas Sales

The stores are anxious to sell and will discount decorations, gift wrap, gifts, toys, trees and other holiday items at huge savings. You can stock up on dishes, napkins, food items and even clothing at up to 90% discounts. You can often find gifts for other holidays as well, like birthdays, Mother’s Day, and even Valentine’s Day.

12. Start Early for Next Year

Next year, avoid debt altogether by shopping all through the year. Keep your eyes open at garage sales, thrift stores, or clearance racks for those one-of-a-kind gifts that would be perfect for someone on your list. You will only have to wrap and send your frugal find when next December rolls around.

This year, you can look forward to the holidays. By sticking to your plan, you will cherish the special moments instead of worrying over bills and escalating interest rates. You can look ahead to the new year with joy when you ho ho hold holiday debt.

Related:

• Sure-Fire Ways To Stick to Your Holiday Budget
• Is It Beginning To Look Like a Cash-Strapped Christmas?
• When Santa Can’t Afford Your Child’s Wish List

Reviewed October 2023

About the Author

Shaunna Privratsky became an expert in personal finance out of necessity. Between writing, reading and gardening, she is always on the lookout for bargains. Visit her at The Discount Diva.