Managing Holiday Finances: How to Stay Debt-Free

How To Stay Debt Free Holiday Shopping

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The holidays are here, and that means we’re entering a wonderful season of celebration, time spent with family and gift-giving. But we’re also entering a season that can be particularly risky to your finances.

In the United States, the average adult spent $852 on Christmas gifts alone in 2020. That doesn’t even take into account spending for other holidays in the winter season, as well as the costs of travel and holiday meals.

If you’re debt-free or trying to get there, it’s going to take a little planning and a lot of effort to keep your finances on track this holiday season. We’re here to help. At A Bankruptcy Law Firm, LLC, we help Illinois and Missouri residents get their finances under control, so we know a thing or two about managing holiday finances and how to stay debt-free. 

Here are 11 of our top tips to help you have a delightful, debt-free holiday season. 

1. Set a Budget for Holiday Spending

Setting a budget and sticking to it is one of the best things you can do for your financial situation at any time of the year. However, it’s particularly important during the holidays, when we have a lot of extra expenses.

Don’t just pick a random number. Really take some time with your holiday budget. Look at how much money you have in the bank and left over after all your expenses each month, and decide what you can afford to put aside for holiday spending. 

When you arrive at the number, you have to stick to it. That way, you can spend every last cent of your holiday budget but still have the rest of your financial situation in order.

2. Fund Your Gift Buying with a Side Hustle

If you don’t have much cash on hand to devote to buying gifts or traveling to see family, consider a side hustle. A side hustle is just a smaller, usually part-time or freelance, way you earn money aside from your regular job. If your regular job covers all your usual expenses, you can put what you earn from a side hustle toward your holiday expenses.

Many retail stores hire part-time holiday help every year, and that could be a perfect side hustle for you if you have some time available on the weekends or in the evenings. But you don’t have to go with a traditional part-time job — there are plenty of other ways to make a little extra cash. Here are some examples:

  • Use a skill like writing or graphic design on a freelance basis online
  • Tutor local students
  • Donate plasma
  • Rent out unused rooms or homes on websites like Airbnb
  • Offer pet-sitting services on websites like Rover
  • Become a rideshare driver
  • Deliver food through companies like DoorDash

3. Save First, Spend Later

The more time you give yourself to prepare for holiday expenses, the more you can save. Try setting a monthly or weekly savings goal that will put aside enough money to cover holiday expenses. Put the money aside religiously.

Then, when you have achieved your savings goal, you have the extra money on hand to buy gifts and go see your family — no need to go into debt.

4. Check Out Cash-Back Apps

Several smartphone apps, such as Ibotta and Fetch Rewards, will give you cash back on your everyday purchases or provide add-on savings deals when you upload your receipts. These apps won’t completely cover even a modest Christmas wish list, but they can certainly help.

Each app has a different process, but most of them allow you to cash out when you reach a predetermined level of cash-back rewards. That’s money in your bank account.

5. Use Credit Card Rewards

If you have a credit card, check the rewards plan that comes with it. Many credit cards give you a small percentage of your purchases as rewards to use toward things like flight miles or even retail purchases.

You may be surprised at how much you have racked up in rewards over the years, as well as the things the credit card companies will let you spend rewards on. You may even be able to find some great holiday gifts while you shop inside your credit cards rewards portal.

6. Don’t Wait Until the Last Minute

We’re all busy, and it’s only natural to put things like gift shopping and booking flights off until the last minute. But here’s the problem: Traveling and retail shopping get more expensive as the holidays draw closer. This is simply a case of companies capitalizing on people being in a rush and running out of options.

You don’t have to fall into that trap. Pencil in some time to book your flights and do your gift shopping, and get it done early. Chances are good that you’ll save yourself a lot of money.

7. Look for Travel Deals

Don’t just buy the first plane ticket that comes up when you Google your holiday travel destination. More than likely, there is a much more affordable flight out there. You just have to take the time to find it. 

Flight aggregators like Priceline, Kayak, and Expedia can provide some great deals, but you should also check directly on airline websites. Southwest Airlines is known for having low-cost domestic flights, for example. 

No one source of flights is going to have the cheapest flights every single time. The key is to check for flights in multiple places and pick the most affordable one.

8. Give More Affordable, More Personal Gifts

Who ever made it a law that we have to buy expensive gifts for our loved ones? Of course, buying a gift is a nice way to show that you care, but there are other ways to do that. For example, hand-making a personal gift for a loved one shows a great deal more care than running out to the mall and picking up the first thing you see.

You can also offer quality time as a gift. With the hectic schedules we are all forced to live with, time is more valuable than ever. Planning an activity with your loved one costs you nothing but might mean everything to them.

9. Find Free Community Holiday Activities

The cities and towns of Missouri and Illinois do a great job of celebrating the holidays. Whether it’s a Christmas lights tour, parade, or community play, you can always find something to do with your family around the holidays. These events are fun and, usually, low-cost or free.

Compared to outings like taking the whole family to the movies or getting expensive tickets to see “The Nutcracker,” community activities can be just as fun and put a lot less strain on your wallet. 

10. Skip the Expensive Holiday Parties

Everyone loves a good holiday party, but if you have ever hosted one, you know how expensive they can be. There’s something to be said for building community with your coworkers or family members during a holiday party, but is that really the only way to do it?

Absolutely not. So, don’t host the holiday party this year but suggest something else. Maybe the group that would have attended the party could all go and volunteer together at a local food bank. You get the same community-building effect without having to go in for hundreds of dollars on food and drinks.

11. Avoid New Lines of Credit

Unfortunately, the pressure to give great gifts and maintain a festive atmosphere around the holidays pushes many people to get new credit cards or personal loans. If at all possible, you should avoid doing that. The temptation is understandable, but opening new lines of credit because you can’t afford something can have a devastating effect on your financial situation.

Your family and friends will understand, and you can use many of the above tips to keep up the holiday warmth and good cheer without going into debt.

Is Debt Piling Up This Holiday Season?

With these tips, you can manage your holiday finances to stay debt-free. But sometimes, financial disaster strikes despite our best efforts. If debt continues to mount and you feel overwhelmed, A Bankruptcy Law Firm, LLC is here to help. Filing for bankruptcy may provide the relief you need this holiday season. We offer free consultations, so you can speak with a bankruptcy attorney about your case at no cost. Whether you need help filing bankruptcy or just want to weigh your options, we are here for you all year round. For help, give us a call at (800) 7-BENSON or contact us online.


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