8 Ways to Stay Out of Debt During the Holidays

Check if you have an online banking feature that lets you set up a separate savings account for your holiday spending. Decide on a reasonable amount of money to transfer into this account and, when it comes time to shop or spend on anything holiday related, use only the savings in this specific holiday fund.  

If you’ve been collecting points or rewards using loyalty cards, now may be a good time to redeem those points for items such as small appliances, home electronics and gift cards to give as presents. Speaking of gift cards, consider using any you have lying around to purchase holiday gifts for others. After all, if you’ve been hanging on to them for months, you’ll hardly notice that you didn’t use them to buy things for yourself.

As the saying goes, “It’s the thought that counts.” Homemade presents are a great way to add that special personal touch, so why not try going the DIY route this year with your gift giving. Baked goods like cookies and cakes are always a hit, or if you’re feeling crafty, putting together a photo scrapbook or knitting a scarf would make for thoughtful gifts, too.

Not only does shopping down to the wire make gift buying a stressful experience, you’re also more likely to make pricey, impulse purchases. So, make it easy—and enjoyable—on yourself by vowing to not be one of the shoppers scrambling to buy gifts at the mall on Christmas Eve.

Consider moving away from the tradition of buying a gift for each individual family member or friend amongst your group, and plan for a gift exchange where everyone just gets one present. This eases the financial burden, but also allows for making a more thoughtful choice in what you’re buying for your one recipient. 

It may sound cheap and tacky, but it’s a better option than getting yourself into debt due to Christmas shopping. There may be brand new items you received--for your birthday, for example—that you haven’t used yet. We’re not talking a scented candle or a coffee mug, but if you happen to have a nice unopened bottle of wine or unused movie passes, these items would work well for a hostess gift or for a co-worker gift exchange. 

Keep your eyes peeled out for the sale price tags, and head straight to the clearance section of any store you enter. It’s where you’ll find clothes, books, toys and other items that, while marked down from their regular price, still make for the perfect present for the recipients on your shopping list.

It’s the simplest piece of advice, but perhaps the hardest one to follow. Don’t buy anything or shop for anyone until you’ve created a list of whom you’re going to buy for and calculate how much you’re going to spend on each person. In your budget, don’t forget to account for party planning, holiday wardrobe, and miscellaneous expenses. Be disciplined about sticking to your budget—make no exceptions to this rule and you won’t dread the credit card statements when they arrive in January.