Tips For A Debt-free Holiday

The holidays don’t have to be a time to upset the budget you’ve stuck to, maybe not by choice, all year. It’s possible and relatively pain-free to emerge from the holiday season without a pile of new debt, even if you haven’t been planning for it all year long.

Here are six ways to get control of your spending and stay debt-free this year.

Create a holiday budget

Decide in advance what you’ll spend, then develop and prioritize gift lists that align with your budget. Don’t be afraid to make cuts to your list when necessary to fit your spending priorities. Remember, not everyone on your list needs an expensive store-bought gift. Once you’ve established a budget, commit to keeping it.

Make preemptive spending cuts to fund your budget

During the weeks and months leading up to your holiday shopping, look for ways to cut your spending in small but impactful ways. For example, cut back on dining out or a movie night at home. Even little changes likely skipping weekly lunches out in favor of making lunch at home can painlessly boost your savings.


Even if you reuse decorations year after year, decorating the entire house can get expensive. Focus on a few high-impact areas in your home – like the front door, entryway, or family room.

Redeem your credit card rewards points

If you’ve collected a hefty amount of credit card rewards points, consider redeeming them for gift cards to give to people on your list. A December 2020 PricewaterhouseCoopers report showed that 42% of consumers like getting gift cards; what’s not to like about giving a desirable gift that essentially costs you nothing.

Price-check everything

Several free price-checking apps can help make sure you are getting the lowest price on everything you buy. Some merchants even let you compare competitors’ advertised prices for a period of time after purchasing items you bought and then give you the difference back in cash or gift cards. There’s no reason to overpay for anything you want to buy this holiday season, and the savings you find on one or two gift purchases could give you the extra cash to buy another item on your list without going into debt.

Look for free holiday activities

Most cities have free or low-cost family-friendly events like the annual Christmas tree lighting or music concerts you can enjoy without spending a penny. Take a walk or drive through neighborhoods known for lavish holiday lighting displays. Spend an evening making homemade ornaments and decorations. Develop and encourage a sense of giving back by volunteering as a family at a food pantry or clothing drive for less fortunate families in your community.

What else?

A cash-only holiday season may sound intimidating but it’s worth thinking twice about taking on new debt for the holidays. Even if you’re not living on a tight budget, those extra card payments are a sure-fire way to wreck your budget in the new year. With a few manageable changes, the holidays don’t have to be a financially stressful time of the year.

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