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5 Strategies to Help You Manage Holiday Debt

5 Strategies to Help You Manage Holiday Debt

By Matt Diehl • November 14, 2019

Studies show the average consumer will spend over $1,040 this holiday season.1 Whether you plan to spend less or more, having a plan can reduce stress, stop you from overspending and avoid big bills in January.

Here are five strategies to help you manage holiday debt:

1. Make a holiday budget

Before the holiday season starts, sit down and make a budget. This can give you a chance to identify all possible costs and plan ahead. Some helpful steps include:

  1. Create a list of holiday expenses – Listing out your expenses is the best way to avoid surprise holiday costs. In addition to gifts and food, think about travel, shipping and postage for presents, social events and charitable giving.
  2. Set a spending limit – Determine how much you can afford to spend without using credit cards or touching your savings. Having this set number in mind can be very helpful when making decisions.
  3. Assign money to different categories – Once your list and spending limit is set, narrow down your spending even further, such as: $200 for family gifts, $50 for work gifts, $50 for donations, etc.

2. Cut expenses

You can create extra money for holiday spending by cutting expenses in other areas of your life. Start taking lunch to work instead of buying it. Plan fun nights at home instead of going to the movies and restaurants. And if you’re creative, you could even save money on presents by making homemade gifts. This could let you create something unique for each person while freeing up money for other holiday costs.

3. Shop smart

Black Friday, Small Business Saturday and Cyber Monday offer great deals, but there’s more to shopping smart during the holiday season. Here’s a list of simple ways to save on holiday spending:

  • Shop early
  • Track prices and comparison shop
  • Check for in-store and online coupons
  • Look for interest-free layaway plans
  • Use shopping apps

*Extra tip: If a group gift makes sense for a certain situation, ask family, friends or coworkers if they'd like to pitch in for a higher priced item.

4. Book holiday travel early

The cost for flights, hotels, car rentals and train tickets typically rise closer to the holidays. If you have definite plans to travel during the holiday season, start looking for deals a month in advance or earlier if possible. You should also keep in mind that tickets and rooms can book up fast for popular days, so you may want to consider traveling on off-peak days or using a different method (train instead of flying). For more ideas to keep costs low, check out these ways to save on holiday travel.

5. Pay with cash

The best way to avoid holiday debt is to pay with cash. Having a budget in place can help you set aside the cash you need, but if you need more, there are ways to make it. For example, some of your hobbies could make you money. You could also have a garage sale or use an online marketplace like Etsy or eBay to make and sell items. And if you want to plan ahead for next year, here’s how you can create a savings fund for holiday shopping.

‘Tis the season for spending, with a plan

With all the excitement around the holidays, it can be easy to lose track of how much you’re spending. Hopefully these strategies help you enjoy a responsible, but still super fun, holiday season.


1. National Retail Federation. “Holiday shoppers plan to spend 4 percent more this year.” NRF.com. https://nrf.com/media-center/press-releases/holiday-shoppers-plan-spend-4-percent-more-year (accessed October 30, 2019).

*This article has been updated from its original posting on November 18, 2016.


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