Avoiding Holiday Debt

Tis the season for merriment, festive decorations, and gift-giving!

Every year, in January and February, hundreds of clients come to us because they are in over their head in credit card debt. Oftentimes, this is due to their excessive holiday spending. While we hate to rain on anyone’s holiday parade, we feel it’s important to share some budgeting tips as the temperatures drop and the spending heats up.

Consider your ENTIRE holiday budget.

You may be thinking about which gifts you want to buy for who but we highly recommend you outline your spending for all holiday-related expenses. In addition to gift purchases, this includes travel and lodging, restaurants, parties, holiday garb, and so on. Consider how you might cut back or cut down entirely on all of these purchases. For example, if you are traveling in the upcoming month, consider staying with family rather than stay in a hotel. Or, if you want to purchase a new dress for your company party, consider “shopping” in a generous friend’s closet (and be sure to return the favor!)

Consider your ENTIRE budget, period.

Once you have tackled your holiday budget, consider those expenses that are not necessarily holiday-related but that are unnecessary. Perhaps instead of spending money to see a movie at the theater, you stay in and watch a classic on Netflix. Bonus: You can wear your pajamas!


Plan your gift list ahead of time and allocate a sensible budget for each person on it. Know what you’re looking for before you hit the stores (in-person or online). Always keep in mind that love is not measured in dollars.

Shop & compare.

Doing your homework can save you a lot of money - Even if something looks like a great deal, remember some of the tricks retailers play (like inflating the original price in order to make the sale price look that much better). Compare store prices, both online and offline. If you are in a store but know there is a better price somewhere else, ask the store you’re at if they’ll match or beat the competitor’s price.

Cash is king.

When you pay with cash, the transaction is complete. When you pay with a credit card, it is easy to forget that you haven’t technically paid for that item just yet. If you can pay your credit card off in full every month, a credit card is a great option but if you do not pay it off in full every month, you will actually be paying more for the item due to the credit card interest that begins growing. If you do use a credit card, use the points and miles you’ve accrued to make purchases or to redeem for discounts.

(Secret) Santa is coming to town…

Implement the Secret Santa game for your family or circle of friends so you only have to buy one gift. You can even take the game even further by allocating a specific price limit. Or, even if you would prefer to give presents to everyone, agree to a budget for all gifts so that no one feels stressed out about who is spending the most or the least.


Don’t forget to make a stop at the Dollar Store for things like wrapping paper, greeting cards, holiday decorations, etc. Most people will not notice.

One man’s gently used item is another man’s treasure.

Considering how easy it is to re-sell items these days plus the fact that for the next several weeks everyone will be searching for a deal, consider reselling items you own but don’t use. The extra cash can be used for holiday spending so that you may not have to make a dent in your overall budget.

On a similar note, you may already have money you’re not using in the form of unused gift cards. Be sure to check out sites like Card Exchange where you can re-sell the cards to people who will use them.

Avoid shopping altogether.

This may be the most extreme tip but hear us out. Instead of fighting the crowds and paying for shipping and handling on a bunch of stuff, consider gifting your loved ones handmade presents or even gifting them time. Home-baked treats, homemade candles, and carefully-created musical playlists can mean more than anything store-bought.


As we all know, time is precious. In a greeting card, write a heartfelt message along with an invitation to spend time together. Make plans to go for a hike, treat them to a hot chocolate, go Christmas light viewing around the neighborhood, have them over for a homecooked meal, or even offer them baby-sitting services. December is a very busy time for most of us so schedule time for a special date in January or February.

Use these tips to keep your stress - and debt - in check this holiday season! Of course, if you are in need of financial help now or in the new year, we are always here for you and your first consultation is always free. Happy holidays from everyone here at Cabanillas & Associates!