How to Get Through the Holidays Debt Free

Posted by Don on November 17, 2014

Ahh, the holidays. They are a great time of year. For me they are better now than in the past. This is because in the past, I never budgeted for gifts. In January I would find myself in a few hundred dollars of debt and spend the next few months paying it off, only to find myself right back in the same situation the following year. It really was maddening. Luckily, I have since changed my ways.

How to Get Through the Holidays Debt Free

I no longer go into debt for the holidays. In fact, I do a few things now that help me to safely navigate the holidays. Below are my tricks for getting through the holidays debt free.

holiday budget

How to Get Through The Holidays Debt Free

Shop With A List

Pretty simple, but a must. My list consists of the people I need to buy for as well as a few gift ideas. I make sure to group the items together (more on this below) to help me keep my spending in check as well. Of course, to come up with a list, I take 10-15 minutes before heading out to think things through so that I have a complete list. I make sure to cover the often overlooked accessories too. This means I might buy batteries if they are not included in a gift that needs them.

Read more: How to Create and Stick to a Holiday Gift Budget.

Set a Budget

For all of the people I buy for, I spend roughly the same amount, $50. Because of this, many people get a few gifts from me. When I am making my list, I am sure to group things together so that I know these 3 things will total $50. It saves me money because I think things through with a clear mind at home and not with a “shopping-high” mind while actually out shopping.

Read more: Plan and Budget for Holiday Spending.

Update Your List As You Go

Of course even with a list, nothing is foolproof. I make sure to make notes on my list as I shop. Early on, I didn’t do this and found that sometimes I forgot about a gift in the moment and ended up buying too much for one or two people. By updating my list as I go, I make sure I don’t overspend.

Read more: Christmas Gift Ideas Under $5.

Save Throughout The Year

At the beginning of the year, I sit down and see how many people I need to buy for and then multiply that number by the amount I plan to spend. Then I take that total and divide by 11. So, if I am spending $50 per person and am shopping for 10 people, I need to save $500. I take that $500 and divide it by 11 (the number of months I plan to save) to get to $45. I need to save $45 a month so that I have enough for gifts. I don’t divide by 12 since I need the money before the end of December. While it’s too late to do this for this year, put a note in your calendar in mid January to start working on this next year.

Read more: Used Christmas Gift Ideas: When Secondhand Wins.

Save Extra Too

The $45 I save each month from above is just for gifts. I still need money for some travel and other holiday related expenses. Because of this, I round up my monthly savings by $20 or so. This allows me to have extra money for the holidays should I end up traveling more than usual, sponsor a family in need or anything else that might come up. For me, I’d rather have more money saved than not enough.

Read more: 7 Tips to Avoid Holiday Spending Stress.

Think Outside The Box

Sometimes, saving the money you plan to spend throughout the year just isn’t feasible. For a few years after I bought my first house, money was really tight. As a result, I couldn’t spend $50 per person for gifts. I had to get creative. I had to think what would really make the person happy. So, I made my own gifts. The first year it was time consuming to come up with ideas, but the following year, it was much easier. If money is tight for you, remember that it is the thought that counts and a handmade gift or a really thoughtful gift will go a lot further than a pricey store bought gift.

Read more: 37 Frugal Homemade Gifts Under $20.

Final Thoughts

In the end, I was able to break the cycle of going into debt every year around the holidays. By far shopping with a list helped me the most to get through the holidays debt free. It kept me from getting caught up in the adrenaline rush that the retailers try to instill in you during this time of year. By keeping to my budget, I knew I wasn’t going to get any ugly surprises in my mail in the form of a credit card bill in January. Take the time to plan ahead for the holidays and you too can set up an easy to follow budget that will be successful.

How do you plan to survive the holidays debt free?

More Tips for Debt Free Holidays



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