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How to Enjoy a Happy Holiday Debt-Free

We have all heard the saying, "it's better to give than receive." But that's easier said than done when you have a limited budget. So how do you still have a happy holiday with family and friends without getting into debt? Our Money Matters, a financial wellness platform, has some tips to start the holidays debt-free.

1. Set expectations in advance.

Your family and friends will understand if you explain that you are trying to stick to a budget. After all, the most important thing is spending time together, not gift-giving. So don't be afraid to offer your time as your gift. Whether that means taking your mom to a museum exhibit, a movie with your dad, or having your friends over for a potluck celebration, your time will mean more to them than a sweater they never wear.

2. Determine your budget.

Talk to your loved ones and suggest choosing one person to give a gift to so that everyone gets something, but you don't have to buy something for everyone. No doubt you are not the only one that will appreciate that idea. Or think about setting a limit for all gifts to be under a specific dollar amount. Once you establish some boundaries, put your budget together and determine how much you have to spend after your necessities like rent, car payments, food, etc. Also, you don't need to pay the same amount for each person, and the cost is not the most important.

3. Only use cash or debit card.

If you are shopping online, use PayPal, Apple, or Google Pay and have the payments from your bank account directly rather than charging them to your credit card. You are much less likely to spend beyond your means if you pay with cash.

4. Buy gifts with points or at a discount.

If you have points from your credit card or rewards through another program, use those first for your holiday gifts. And take advantage of online and offline sales. The closer it gets to the holidays, the more merchants will discount to eliminate excess inventory. Make sure to pick it up in-store as you may not receive it on time otherwise.

5. Earn more points when you purchase.

If you must use your credit card, buy gifts that will get you the most rewards. For example, some credit cards increase your points when you use them for dining so buy a restaurant gift certificate for mom and dad. Other cards give you additional points for gas purchases, and who would refuse a gift card to fill their tank these days?

6. Be creative.

It's always fun to decorate for the holidays but spending money on decorations can get pricey. Use what you already have, or do some crafting and make your own. Use brown paper for gift wrapping and then top it off with a beautiful ribbon versus buying expensive paper. Decorate your home with things you can find outside, like branches, leaves, flowers, and pinecones. Buy a plain wreath and then decorate it with pinecones you spray paint. If you want to buy a tree, consider a smaller one that can fit on a tabletop. The bottom line is that a little creativity can go a long way.

7. Use caution with “buy now, pay later” offers.

These schemes can be tempting, but they always come with a catch, like higher interest rates, if you don't pay them off by a designated time. And if you don't have the money now, what makes you think you will have the money a month from now? Paying in installments is also tempting but ensure interest rates are not involved and set up an automatic payment plan. You want to make your scheduled payments rather than accrue interest or take a hit on your credit score. Also, keep track of how many of these programs you are taking advantage of to ensure you can afford the payments when they come due.

8. Get a part-time gig.

If you want to splurge a bit but aren't debt-free, consider getting a part-time job to help pay for the holiday extras. Whether it's driving an Uber or a Lyft or working in retail, companies are looking for extra help during the holidays. Working a few extra hours will lessen the financial pressure.


According to a study by Qualtrics on behalf of Credit Karma, 69% of Americans plan to take on debt to cover the costs of the holidays. But you don't have to be one of them. There are plenty of ways to enjoy the holidays without breaking the bank and jeopardizing your financial future. Think of starting off the new year debt-free as a gift to yourself!

If you’re interested in learning how to get free financial tools at Our Money Matters, click here. Our Money Matters is generously supported by a grant from the Wells Fargo Foundation.

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