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7 Tips to Avoid the Holiday Debt Trap

Avoid the holiday debt trap with these 7 helpful tips! These are great to keep in mind all year long, so that the holiday season is stress-free and easy on the budget when it arrives!

Guest post from Rachael of

Now that the weather is getting cooler and the leaves are beginning to fall, I can only think of the joyous season ahead. Holidays full of turkey, pies, lights, mistletoe, debt, tinsel, caroling…Wait, HUH? Debt? That must be a typo, right?

Unfortunately, it seems that debt is becoming about as common in the holiday season as Christmas trees and turkey dinners. So how do we take this joy zapper out of such a joyous season? Well, I have 7 ideas below that have helped me enjoy my holidays without dreading the credit card bill in the weeks to follow:

1. Make a gift budget and stick to it.

Christmas comes the same time each year, and yet somehow it always sneaks up on us financially. However, if you include it in your budget and save throughout the year, by the time it’s time to shop you already have your money set aside.

Also, be sure to stick to your budget. It’s so easy to just go a few dollars over here and there, but those dollars can really start to add up. Make a budget and stick to it!

2. Shop early.

You may be wondering why I wrote this post now. We still have over 2 months until Christmas. Well, the earlier you shop the more time you have to look for deals.

I started shopping for Christmas presents back in the spring so I could catch great deals as they came along rather than waiting until the last minute and settling for whatever prices are available.

While it’s no longer spring time, you still have plenty of time to find some awesome deals… and then next year you can start even earlier!

3. Be practical.

I know it’s so easy to want to buy every toy that your kid puts on his list. However, they truly don’t need every toy.

Guess what? In a few months, they will probably have forgotten about that toy and will be wanting something else. While it’s fun to get a few things that your kids are longing for, use Christmas as a great time to get the stuff they truly need.

When I was about 10, my parents got me a mattress. Yes, you read it right…a mattress.

The funniest part is that I actually asked for the mattress (I was obviously a very practical child). I still remember that gift. You know why? My husband and I are still using that mattress.

While I may remember a few other presents from my childhood, I can truly say that very few of them have lasted me 15 years. That’s why we are using this year as an opportunity to upgrade my son’s baby room into his “big boy” room and get him some stuff that he really needs.

4. Be honest with yourself.

Just because you’ve gone all out in the past for Christmas doesn’t mean you have to meet or out-do it this year. Really analyze your situation and do what you can truly afford according to your income and budget.

5. Be creative.

Try finding creative ways to use your talents to make presents. For example, if your talent is photography, use this talent to make family portraits for someone.

If you are like me, maybe you really like couponing and finding free or inexpensive deals. Take those items and make a gift basket full of toiletries and pantry items. It might be practical, but I have a feeling it will get used.

6. Look for extra ways to save for Christmas.

Try looking for small ways to supplement your income to help pay for Christmas. Below are a few things I am using to help earn a little extra money here and there. Trust me, the little amounts can add up if you stick to it.

    • : An app that gives you points for watching television that you can redeem for prizes like gift cards.
    • : A rebate-style site that pays you to shop online.
    • : Get points for completing task, taking surveys, shopping online, etc. that can be redeemed for rewards like gift cards.
    • : Earn money while completing task, confirming paid emails, and more.
    • : Get points for making video reviews of various products which can be translated into rewards like Amazon gift cards.

7. Enjoy the season.

After all, the true meaning of this season is NOT about seeing how much debt we can accrue.

With these relatively simple tips, I hope you’ll have a wonderful holiday season filled with all that good stuff I mentioned above… and without all the debt!

What are your tips for having a debt-free holiday?

Rachael Lachniet is a stay at home mom who enjoys learning ways to save money for her family and tries to share these ideas with others on her blog, .

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48 Comments

  • Louise says:

    I only have my husband and father-in-law to buy for yet for Christmas. I have bought all my parents’ gifts except one – but I know what that will be – it’s just not paid for yet. My husband has already gotten our teenage son gifts. And I don’t need to get many other gifts, but they are all bought (unless I forgot someone – I’ll have to check my list). lol I love buying Christmas presents this way. We do not go in debt for Christmas. And the joy of shopping early, lets you enjoy the season more. 🙂

    • Louise says:

      Example, my husband works in retail so looks for sales during the year – got our son a paint ball gun and I found him a box of paint balls at a yard sale for $5!

  • Lyn says:

    we do save all year long. We have three kids. They ask Santa for something they want. Mom and Dad then get them something they need, something to wear and something to read. They have 4 gifts each under the tree. grandparents and relatives add to the pile. It makes it simple as my husband and I search. It also helps the kids not to be greedy. They only ask Santa for one item. Santa has lots of boys and girls to shop for.

    • says:

      I love that you have a list of presents (“something they need, something to wear and something to read”). It’s such a great way to keep the presents in check and make sure they will get something they will use.

  • says:

    Great tips! I think keeping a proper perspective of what Christmas is about is important. Gifts are nice, but it’s not about gifts. When we put the gifts and “stuff” in front of the celebration of the birth of Jesus, it gets out of hand.

    Blessings,
    Nicole @ WKH

  • says:

    I love this post. I have been thinking about getting started on Christmas gifts but I really want to try and make gift buying and receiving uncomplicated this year. The part I usually find most frustrating about christmas is the clutter and mess that results from getting too many gifts. I am thinking of doing a minimalist x-mas. I hope I can get my family to like this idea.

  • C.C. says:

    I shop all year long (starting on Dec. 26th!) which helps spread out the spending and find the absolute best deals. I shopped some consignment sales this year which made for some phenomenal deals. I consigned old toys and clothes at the sale too, so not only did I get to clean out the garage and closet, but I got some ‘like new’ toys for my daughter and nephew for less than 1/2 their original cost–all paid for by our consignment!
    I also make lots of gifts, starting in about Sept. (I have a hand crafted business, so for me this is a no brainer), which costs a lot less than purchasing gifts.
    This also might sound a bit tacky, buuutttt, I also have been known to re-gift. I get some nice gifts from extended family, but they will sometimes purchase the same things for me multiple years (or for multiple occasions). I can only use so many umbrellas, scarves, tote bags and bath kits. I will save these items and gift them to people from the other side of my family…I am always feeling a bit guilty about this, but they’re nice items, so I hate for them to just sit around collecting dust!

    • Terry says:

      CC do not feel guilty for regifting my mother always regifts me bath kits that she gets because I’m a bath girl and she’s not. I love the gifts, isn’t that the meaning of the holiday celebrate the joyous season by giving someone a gift they’ll love?

  • says:

    Another thought: the earlier you start thinking about what gifts you want to give the important people in your life, the more chance you have about finding “the perfect thing” WITHOUT breaking your budget. Will your sister really think less of you if you get her a $20 gift instead of a $30 gift? Even better, avoid things which have obvious price tags attached (like gift cards) – go instead for gifts which come in a wide variety of price ranges. A mid-range waffle maker could be $20 or could be $60, and your recipient is likely to assume you spent more than you did – especially if you find something on sale!

  • Sarah says:

    One more option: talk to sisters/brothers/friends etc.. and find out if they really want to exchange presents anyway. Last year my sister-in-law asked if I would mind if we didn’t exchange presents between siblings in the future. I was relieved. I never know what to get them anyway. It doesn’t mean I don’t love them or care about them. My friends and I have the same policy as well. There are just very few things worse than trolling the mall looking for SOMETHING for someone when they are doing the exact same thing for you because you feel like you have to or should. Usually it just results in more unnecessary stuff and stress.

    • says:

      I have to agree with Sarah. My parents sent gifts to my out of state cousins all of the years while I was growing up.

      When I went to visit them after I graduated from college, I found out that they didn’t like any of the gifts that my mom had sent. They would rather have had nothing, they said.

      It’s okay to cut the gift giving back!

  • Anne says:

    Now that my siblings are all married, we’ve decided to simply get one gift for each couple, instead of individual gifts.
    Also, I collect Swagbucks all year and cash them in on Amazon gift cards to help with Christmas shopping. And we collect change throughout the year in a jar and bring it to a Coinstar and get an Amazon gift card for it.
    My grandparents don’t really need anything for Christmas, but last year I made a bunch of freezer meals for them for Christmas and them and they loved it!

    • veronica says:

      love the freezer meal idea

    • Mary H says:

      I love this idea too! I live alone and if someone cooked for me, and cleaned up the mess, I would be thrilled. It would be so nice to have a few meals in the freezer. Very thoughtful idea, Anne.

    • says:

      I love your freezer meals idea!

      One of my readers was asking me for no–cost gift solutions for the men in her family. I suggested that she find a way to serve her family. She wrote back to me that they have decided to clean her father-in-law’s house once a month for a year as their Christmas gift to him. I thought that was amazing!

  • Lacey says:

    Shop early and be creative are crucial. Also when you come from a large extended family you need to just make being together the best part of the holiday. It used to be just buying for the kids and that even became expensive after a while. The kids get the most gifts already. Choosing names is a good option also, but really I don’t feel a need to get a gift from anyone. The biggest gift is just being together.

  • Emily says:

    My biggest tip for Christmas is this – all year long I buy gift cards whenever I go grocery shopping. I shop at Kroger and they have a large stand of tons of gift cards. So every week I grab one (usually a $15 Target gift card), load it at the register, and then stick it in my dresser. Then when Christmas comes around, I have those cards for my spending money. $15 or $20 a week hurts a lot less than buying everything in the last couple months of the year!

  • Angela says:

    One of the things I started last year (the first year we had a kid) was sticking to the “One thing you want, One thing you need, One thing to wear, One thing to read” mantra. Plus stockings. If I know going into it that I’m only getting my husband four things and only getting our son four things, it’s easier to ignore the rest. I find a great toy (at a great price!) and buy it, that’s the “one thing you want” down, so when I see other toys that are fun, I don’t buy them (if they’re something I think he’d really enjoy, I put them on a wishlist that later gets sent to the grandparents), I switch to looking for books or a new coat. I also started doing very few or joint gifts for the rest of the family – my MIL and her partner get one gift, my parents get one gift, my BIL and his wife get one gift, etc., and my niece and nephew get one gift each.

    I also use Evernote to keep track of gift ideas throughout the year. My husband has mentioned several times over this year that he thinks he’d like to start wearing a watch again – and a couple years back he was admiring a nice, “grown up” Mickey Mouse watch (we’re a big Disney family) while we were in Disneyland, so I’ve conspired with his mom to find and buy that watch or a similar one during our trip in a few weeks. I make notes about what kinds of things he needs (new slippers), what he’s complained about around the house (new, better dishcloths), and things he becomes interested in (pipe collecting/smoking). And then I can keep my eye out for deals throughout the year and base my gifts on those things.

    In addition to saving throughout the year, I lazily do Swagbucks and exchange points for Amazon gift cards – which I then use toward Christmas gifts. Also, I’ll admit it, our son got a TRU gift card last year for Christmas that we just haven’t used, and I’ll be using it in the next couple weeks to buy a couple things to for this Christmas.

    • Bobbi says:

      I love that you used the word “Lazily” to describe your swagbucks use! Me too! I have maybe enough for $15 in gift cards which has taken me a really long time to accumulate. Figure it’s still better than nothing and I will be using those on Christmas gifts. (o:

  • says:

    This is so helpful! It’s so important for us to be realistic and practical. I love that you asked for a mattress when you were 10! That’s totally something I would have done! 🙂
    I’m actually blogging right now about preparing for Christmas a little bit now to enjoy it more later; not stressing or being obsessive about it, but just being intentional with time and resources now.

    • says:

      I’m glad the post was helpful for you, and I’m glad to know someone else would have asked for a mattress at 10 🙂 I checked out the Day 2 of your series on your blog and really enjoyed reading it. Thanks for sharing.

  • michelle says:

    We budget all year long for Christmas. This year we cut down the sibling gift exchange to my husband doing his side and me doing mine, instead of both of us doing both sides. And this year my family decided not to exchange for budget reasons. Saving us $75.00!

    We recent just got back from a wonderful family vacation, so Disney tickets were part of of children’s gift and I will also be making a photo book of the trip for them! They love looking at photos and hoping this helps them remember all the great memories we made.

    • says:

      That’s awesome! I hope you all enjoyed your Disney Trip and the photo book will be great for memories. What an awesome Christmas present and a great way to enjoy time with family.

  • says:

    Fantastic Tips!!!

    My husband and I always shop early, but sometimes there is a failure to communicate, shall we say. We usually end up buying way too much for our boys and end up saving stuff for birthdays or another event.

    I created a money-saving envelope to which I contribute a few bucks a week. We buy for a bunch of people, so I put $20 a week into it. I just started saving for Christmas 2014! I am thinking ahead!

  • Amber says:

    Throughout the year I take advantage of Target’s free gift cards with purchase sales. I’m going to buy laundry detergent, diapers, toilet paper, etc so I buy them when they have free gift cards attached and buy enough to last 6 weeks AND make sure to stack coupons for these items (that about covers us until the next gift card sale). I squirrel away EVERY single gift card for Christmas and you wouldn’t believe how quickly they add up, this year I’m figuring on having about $350 in free gift cards from necessities I would have bought anyway. Add that money to the $100 I will have earned in Target giftcards from Shopkicks, and I feel joyful that I can be generous with my kiddos at Christmas. Another advantage, my kids have been told that Santa only shops at Target 😉 so this focuses their “I wants.” If Target doesn’t have it, then it’s not on their list. Keeps life simple and the holidays without stress and guilt for us.

    • Laura says:

      I love the “Santa only shops at Target” phrase. What a great way to set a reasonable limit!

    • says:

      That’s a great idea! I love the idea of using gift cards from the stuff you need to buy anyways to save for Christmas. Thanks for the tip.

    • Jennifer says:

      I’ve done this same thing this year, based on a tip from another reader on this site. Now, I’ve only gotten about $40.00 in gift cards because I haven’t shopped as much at Target, but that’s still $40.00 ahead of the game!

  • Guest says:

    We don’t go overboard with holidays. In past years, I’ve adhered to something they want, need, play with, and read, stockings. This year, we’re investing in a family iPad, so each child (will be ages 7, 3 1/2, and 1) will get 1 present to open, 1 book, and their stockings. The baby’s birthday is actually Christmas Eve. She’s getting a quilt made of her old receiving blankets for her birthday. Since she’s only turning 1, she won’t know the difference!

    One thing people often fail to budget for is the holiday food. Most families cook special foods for holidays that add to their grocery expenses. Whether it’s pounds of butter or nuts or a pricey turkey or ham, this can be an unplanned for expense. Don’t forget to budget for that too!

    • Amber says:

      Great point, as newly weds we fell into the trap of forgetting to budget for the holiday meals, goodies, and party extras. Over the years I’ve found 2 things that help prevent this oversight: 1) in September I start buying the staples for the family favorites (chocolate chips, brown sugar, cream cheese etc). 2) I find one fantastic party recipe for the season (say spinach artichoke dip) and buy the ingredients in bulk at our club store. This limits trips to the store and impulse buys and cuts the costs of the party dish by several dollars each time I make it and prevents the stress of coming up with something for that overlooked event.

  • Melissa says:

    I am one of those people who puts all of my normal spending on my credit card throughout the year (groceries, gas, etc) and I always pay off the whole bill each month. I do this so that I can acquire points for my purchases. I then use those points at the end of the year to get gift cards to give as Christmas gifts. Those gift cards cost me nothing, and I can then use my spending cash to pick up little gifts to go along with those cards. I too believe in Christmas shopping early!

    • says:

      I have thought about doing that, but I am not sure I have the self control yet to do so. God is still working on my entitlement attitude;-)

  • jerilyn says:

    My parents got me a mattress when I was 16. 11 years later I’m still so thankful as we never could have afforded such a nice mattress!

    • says:

      Awesome! I’m glad to hear of others getting a mattress as a kid. It really was such a great present, wasn’t it 🙂

    • Melissa says:

      I also asked for a mattress one year for Christmas when I was a teen. As I am older we always ask for stuff we could use for the house. This year if someone asks us what I want for Christmas, my response is gonna be a bed pillow. 🙂

  • says:

    I love your idea for making use of talents and giving those as gifts! It’s not something everyone always thinks about.

  • says:

    Every year, starting the first week of the year, I make a list for birthdays and one for Christmas for gift ideas. When my children mention something throughout the year, or when I think of an idea, I put it on the list.

    Twice a year I go to a community garage sale. I look for items on the list there, as well as supplies to make gifts (actual supplies as well as items that can be repurposed for gifts).

    I try to make most of the gifts for my family for birthdays and Christmas.

    Last year I worked to complete a present a day and I wrote a series about it here: I’m planning on doing it again this year. I had so many readers who said they didn’t think they could afford any Christmas gifts last year tell me that it really helped them come up with creative gifts and that they were able to have Christmas gifts after all.

  • Eileen Swavely says:

    We have four adult children and their spouses and 14 grandchildren – seven girls and seven boys. I do ALL our gift shopping – Christmas, birthdays and wedding gifts at curbside boutiques during the yard sale season. During the colder months, I’m a regular at Goodwill to satisfy my shopping urges. When I return from my shops, I wrap all Christmas gifts the same day so I don’t have to worry about last minute wrapping. All daughters and daughters-in-laws shop yard sales, too. We love to talk about our deals.

  • Ashley says:

    One thing we’ve done since our first daughter was born was only to get her one present. Yep, just one. And it’s usually something really nice (although we try to find deals, and yes, sometimes it’s used from Craigs List or Ebay), but again, just one. The kids also only get stocking presents from Santa. Again, these are usually nice, but fairly inexpensive. And then all the kids (we have 4 now) make (yep, make) 1 present for the other children (so 3 make a present for the other 1). So my kids get 2 presents each under the tree in our family (grandparents and aunts & uncles also get them presents). But this lets us spend the season focusing on doing things for others and spending time as a family. I don’t think our kids realize that other kids get much. 🙂

  • Melissa says:

    We are trying a few new things this year, which I think is going to make a big difference this year when it comes to shopping for the holiday.

    1. Rewards systems: I’ve saved up all my reward points and gift cards this entire year to help with our holiday shopping. I really don’t work as hard as I should at them but since it was my first year trying this I spent a lot of time trying to figure out how I could make the most of my points from these different areas… mycoke rewards (been picking up coupons and gift cards for products holiday dinners/parties), viggle (3-$25 gift cards), swagbucks ($50 so far), savings star ($15+), inbox dollars ($50)+, kmart ($15+), weis markets ($25), Mobile me ($75), and I think there a couple of others that I can’t remember right now. For my first year I thought that was pretty good “extra money” for the holiday month.

    2. I have been making gifts for awhile now and each one of the women in my gift giving list receives at least one, if not more, hand made item. (One this year will be the Dawn/oil of olay hand scrub – because I just got dawn cheap with coupons) People in my list actually like those types of gifts better than things that come from the stores anyway because it’s one of a kind and no one else has it. Besides after a certain time in your life, do you really need more candy, and kitchen appliances etc???

    3. I already started shopping for ingredients/gifts/supplies for my holiday. I have a turkey, foil pans (not a necessity but helps ease my clean up time so I’m spending less time in the kitchen), corn muffin mixes, sugar, chocolate chips, peanut butter, candy, wrapping paper, tape and yes I’ve already picked up some gifts. Even free samples I’ve gotten in the mail are coming in with Christmas presents in mind. (Example: my niece has a Kurig and every time I see a free sample for the cups, I send for it. I have a half dozen sample packs that I have accumulated over the year that I will be wrapping up in a little gift bag set for her and that will have not cost me much.)

  • Jessie says:

    My children get 4 presents. It has made Christmas so much more enjoyable. I no longer constantly hear the “I wants” when walking through the store or while watching television. If it is not cool enough to be added to the list of 4 then they don’t ask for it. My oldest son was not too thrilled when we started this system 3 years ago, but now he loves that he is pretty much guaranteed to receive the 4 presents that he wants the most.

    Santa fills stockings with tooth brushes, a few pieces of candy and such. He also brings a couple board games and maybe a movie or some books.

  • Tracy says:

    I shop all year round for Christmas presents it really does help with my budget. This year though I adjusted my budget to be what I could afford. And I was worried about not being able to find gifts that would work for everyone on my list. I realized that if I just focused on getting one really good gift everyone would be happy. I am happy because I know they will like it and also because it is a whole lot less shopping for me. Only my parents, and son are getting more than one gift this year. My son gets 3, a want, a need, a book, his stocking. And he knows that Santa only gives him a couple presents as there are a lot of needy children in the area who Santa gives more presents to.

  • says:

    My tips:
    1) Don’t have credit cards, don’t participate in any form of usury (borrowing or lending of money at interest).

    2) Don’t do gift exchanges for holidays, give self instead. We (are not saints) go to a Nursing Home on Christmas and spend the day with the residents there that don’t have family (and even some that do have family that comes for 5 minutes).

    3) Give to a mission or other cause in the name of the family.

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