Friends exchanging gifts outside and smiling at each other.

10 Ways To Enjoy The Holidays Without Going Into Debt

Victoria Araj3-minute read
July 01, 2021

Buy now, pay later.

That’s the approach far too many people take for funding the holidays, racking up immense amounts of credit card or quick-loan debt when buying expensive gifts, outfitting homes with seasonal decorations, purchasing the latest fashions, eating out too much, or taking year-end vacations they cannot afford. In fact, over half of all Americans take on more debt during the holidays, according to a recent CNBC report.

But similar to the tempting holiday treats so many of us fail to decline, this spending approach feels better in the moment than it does in the new year. The good news is there is a better, more sustainable, and still holiday-filled way to enjoy the most wonderful time of the year.

Before spending a single cent on the holidays this year, consider the following best practices: 

  1. Set expectations early. If you’re trying to spend less money or avoid debt this holiday, tell your friends and family what you’re doing and ask for their support. Something as simple as, “Hey, I’m trying to avoid debt this year and hope you can understand by lowering your expectations but still committing to having as much fun as humanly possible within a lowered budget.”


  1. Commit to a restricted budget. According to Deloittethe average American family spends $1000 – $2000 on Christmas gifts. Consider how you last overdid it (keep in mind what you want to spend in total or on a per-person basis, including travel and meals), then adjust your budget accordingly. You can do this, but you have to know where you stand and where you want to end up.


  1. Consider alternative forms of payment. Instead of the “spend it and forget it” approach of credit cards, stick to a cash-only tactic. This strategy has worked for millions of people to reduce their spending. Alternatively, consider interest-free layaway options, reach for unused gift cards or credit card rewards to partially fund the holidays, or ask family and friends to share the burden of paying for a holiday meal by asking them to bring a side or dessert to share.


  1. Reduce gift amounts and quantities. Do you really need to give to neighbors and extended family this year? Is there anyone else you can skip this year? Furthermore, can you communicate with close friends, siblings, children, and other loved ones that while you still intend to give gifts, you will do so on a more limited basis? Maybe stick to a single present this year, given your current situation and desire to avoid debt. Rather than giving what may or may not be expected, consider giving to only those you truly want to this year.


  1. Plan to buy everything on discounted days. You know their names: Black Friday and Cyber Monday, the late-November shopping extravaganzas in which you can often save upwards of half of the normal, full-purchase price. Remember, it only gets more expensive from here, especially in December. In other words, waiting will cost you.


  1. Give creative and thoughtful gifts instead. For someone who feels loved by words of affirmation, quality time, or acts of service, an ideal gift could be a personal love letter, a homemade coupon book with free activities that can be enjoyed together, or the gift of cleaning for, working for, or helping someone in need. For people who love gifts, consider something creative or made with your own hands instead – something they would appreciate and cherish.


  1. Take a second job to fund the desired spending. If gifts and/or expensive things are reallyimportant to you, consider taking a side or second job to pay for the increased spending you plan on doing, rather than paying for it later with expensive interest.


  1. Establish a nonspending holiday tradition. That might be a movie night with family to rewatch a favorite flick you already own. A bonfire at the beach or in the mountains. A day of sledding. Driving the neighborhood to look at the seasonal lights. Or volunteering your time as a family to help at a local charity.


  1. Don't wait until January to monitor your spending. Instead of putting off the inevitable, track and watch your holiday spending on a weekly, if not daily, basis to know where you stand. Furthermore, don't be tempted to splurge in January after a restricted holiday budget. Stay strong, stick to your budget, and keep your momentum into the new year.


  1. Reward yourself for hitting your savings and budget goals. Want even more incentive to stick to a budget? Plan and budget to reward yourself after the holidays (up to a certain amount or gift, of course) for hitting your goals. This works. You can do this.


Need additional help with your spending? Visit Rocket HQ for finance advicelearning center and money-making tips you can trust. And visit Rocket HomesSM for your free credit score.

Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.