How to Keep Out of Holiday Debt This Year And Love It (2024)

Holiday debt, most of us have done it to ourselves at least once (some do it every year). But I can tell you how to keep out of holiday debt this year and every year; with a few simple ideas. Debt causes more worry, strife, stress and even health issues in individuals, marriages and families; yet many of us continue this pattern year after year.

So how can we keep out of holiday debt this year and still enjoy the festivities and gift giving? Well I’m so glad you asked!

Stop Trying to Keep Up With _________________

The first, and maybe the best, tip for keeping out of holiday debt is for you to stop comparing yourself or your family to others. If you see that someone else is giving more gifts, having a big party or decorating like their a Christmas elf, you may feel like you have to keep up with all that. But here is a fundamental truth,comparison is the thief of joy (Theodore Roosevelt said that). You’ll suck the love and joy right out of the season by trying to charge your way to the top of the heap. Not to mention, those above mentioned folk may be in debt to their eyeballs trying to keep up with someone else.

Set A Cash Budget

Every year I set an amount that I am going to spend on each family member (including what my hubby can spend on me). My husband works hard but he hates doing budgets and bills, so he happily lets me use my giftings there. We generally set aside money for our tax return at the beginning of the year and add to it throughout the year as a sort of savings plan. If you don’t have a tax return just start a holiday savings account in January.

If you’re already in debt and need some help, I highly recommend reading Total Money Makeover.

Focus on Family Instead of Gifts

I have a friend that each year gives her kids 3 reasonably priced gifts and no more. Her philosophy is the baby Jesus only got 3 gifts so my kids don’t need more than that. She has no problem buying a game system for them but it is usually one that has been gently used and not the latest model. Her kids are so used to this that is doesn’t phase them. Their holiday is about baking, decorating and spending time with one another. Another friend plans a Christmas time vacation for the family, nothing extravagant but fun or adventurous. They open 1 or 2 small tokens Christmas morning but the gift is the time away to spend with one another making memories.

The memories you make will last a lot longer than the gifts. I mean honestly, do your kids even remember what you got them last year?

Plan a Potluck Dinner

Our family and friends often do potluck meals for Thanksgiving, Christmas and other holidays. A huge festive meal can cost a lot of money, especially for a big crowd. A pot luck allows everyone to bring a dish to share and takes the burden of the whole meal off of one person. It also gives everyone an opportunity to show off their favorite dishes and cooking skills!

Our family usually makes a “menu” of desired items and everyone picks what they’ll bring from that list. It has been working for us for years.

Try Secret Santa for Extended Family Members

Trying to buy for your immediate family is enough to break the bank; but trying to buy for all your extended family might have you reach for your credit cards. I love to watch my loved ones open gifts but instead of everyone having a huge pile to open at the gathering, how about just one for each?

You can all avoid holiday debt but doing a type of Secret Santa exchange. Put everyone’s names in a bowl (we do this after Thanksgiving dinner) and each person chooses out a name. The family and/or friends set a limit on the gifts for that year and everyone gets something fun to open at the Christmas gathering.

Of course the other option to for everyone to agree that you are not exchanging gifts and will just enjoy each other’s company (again making memories).

Homemade Gifts Are Awesome

One of the greatest ways to avoid holiday debt is to use your talents to make homemade gifts. I have heard people call DIY gifts corny and that really shocks me. I feel those sweet gifts, that someone took the time to lovingly make me, are extra special. Not all homemade gifts will save you money but many of them can.

Close Your Credit Cards Before the Holidays Start

Avoid all temptation by closing your credit card accounts before the holidays even start.

I hope all, or at least one, of these tips will help you avoid holiday debt this year. It isn’t always easy but there is nothing worth the stress of being in massive debt at the first of the year.

Best of luck to you and Happy Holidays!!!