Five Ways to Beat Holiday Debt

It happens every year: the holidays roll around and you’re not ready for them. In a mad scramble, you buy gifts no one needs or wants, decorate and entertain in a frenzy of spending and end up feeling guilty and unseasonably blue.

Not this year.

This year, you’re going to do things differently—because you’ve got the knowledge and support to back you up. We’ve compiled five tips that cover various categories of holiday danger zones: budget, gifts, travel, decorating, and activities. Use these strategies to get off on the right foot this holiday season—and to jumpstart money saving ideas of your own. With a little planning and restraint, the holidays can actually be happy!

Tip 1: Make a budget (and stick to it)

A good budget is a map to healthy spending; it will keep you on track as you navigate the season’s temptations. A quick Internet search yields plenty of budget worksheets or you can make your own customized plan. Try the simple worksheet on this page as a starting point. It covers everything from donations to holiday outfits and includes a column for the amount you went over/under, so you can juggle funds to cover unexpected expenses.

Tip 2: Keep gifts under control

Whatever winter holiday you celebrate, there are usually gifts involved. It’s so easy to get carried away with either holiday spirit or holiday panic and end up in the hole. But again: not this year. Here’s how:

Talk to your friends, family and co-workers ahead of time about keeping a limit on the number of presents purchased. You can set up a gift exchange at work and with your extended family where everyone draws one name to buy a gift for instead of buying gifts for everyone, buy for the kids only, and/or put a spending cap on your purchases.

Another method for saving on gifts is making them yourself. From DVD’s to ornaments to recipes, our very own Coach Suzanne has some good ideas on how to create gifts from the heart. DIY gifts have an added bonus: they’re a fun activity for kids—which is a perfect way to maintain your sanity when cold weather keeps them in the house.

For the gifts you can’t avoid buying, make sure to get the best deals possible. Making a list and checking it twice (and way ahead of time) will prevent impulse buys. It will also allow you the luxury of comparing prices and finding sales. But before you head for the mall, stop at the ATM. Using cash instead of credit will help you stick to your budget by making it clear really fast when you’ve hit the limit you set. Or skip the mall altogether: Sites like overstock.com or ebay.com are good virtual marketplaces where you can often find incredible deals on exactly what you’re looking for (and you’ll save on gas and avoid parking lot gridlock). 

Tip 3: Travel wisely

It’s a big season for travel, but that’s no excuse to blow your budget. Whether you’re visiting family or just getting away, look for ways to save.

The best way to lower your travel tab is simply not to travel. Invite far-flung relatives to visit you instead, or explain your situation—there’s no shame in staying home. Plus, hibernating over the holidays can be fun. Stock up on your favorite foods, good DVDs, holiday music, and board games. Bonus: you’ll feel smug that you’re avoiding the holiday travel craziness!

If you can’t avoid traveling, plan way ahead of time to get the cheapest rates. Depending on where you’re heading, it may be cheaper to drive. Figure out your gas cost with AAA’s gas price calculator. It will predict what you’ll spend based on mileage, car model, and current gas prices.

If other relatives or friends are heading for the same location, consider renting accommodations together for more savings. Look for a place with a kitchen so you’re not eating out every night.

Tip 4: Decorate with Mother Nature

Nature conveniently provides free decorations around this time of year. Depending on where you live, use pinecones, colored leaves, wheat stalks, or even green foliage to make free centerpieces. Line your mantle with pinecones. Strew colorful leaves across the entire table. Fill a vase with branches. You can find lots of ways to decorate for free by inviting nature to your holiday festivities.

Tip 5: Look for frugal activities

The holidays are about being together, and you don’t need money for that. As we mentioned earlier in this article, DIY gifts are a fun way to entertain the kids while saving money. Whether you’re making crafts or making cookies, get your children involved. The same goes for collecting leaves and pinecones for decoration. Make an event out of going for a walk and bringing home your goods.

Another wintery family activity is an outing to see holiday light displays. No matter what your religion, the lights are a beautiful sight. Holiday concerts are also plentiful this time of year. The ones put on by local youth groups are usually inexpensive or free. If your family is musical (or very un-self-conscious) organize a caroling group with friends or neighbors and take your act on the road.

The holidays are the perfect time to teach your kids about giving back. Consider volunteering this season. It not only brings your family together, it’s a good lesson on compassion for kids and grownups alike. VolunteerMatch will help you find opportunities based on location, skills or what kind of opportunities you’re interested in.

The holiday season should be about warmth, good company, and lots of time with family and friends. There’s no need to overspend on those things. So ignore the commercials luring you to buy, close the magazines with overpriced outfits, and skip the expensive travel. Focus on what matters. Happy holidays!

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