How To Avoid Going Into Debt for the Holidays


With the holidays around the corner, it is time to start thinking of everything that comes with the season. From putting up lights on your house to buying gifts for your loved ones, there is a lot to get done. Because of this, the Christmas season can be stressful and the last thing you want to do is rack up a bunch of debt during this time.

5 Ways to Avoid Using Debt When Purchasing Gifts

1. Freeze Your Credit Card

Literally. Take a bucket, fill it with water, put your credit cards inside it, and then put it in the freezer. This will help you avoid using credit to fund your shopping as it will take you quite some time to chisel them loose from the block of ice that now surrounds them. This technique simply puts time and effort between you and the impulse purchase, giving you the opportunity to think twice about how your impending action will affect your financial goals.

2. Use a Countdown Fund

A Countdown Fund is a savings fund that you contribute to on a regular basis for a goal that you have established. For our purposes, we will be saving up to buy gifts this Christmas. If you typically spend $600 at Christmas and if you have two pay periods left before Christmas, then take $300 per paycheck so that you have the money you need to buy your gifts without going into debt. Ideally, you should start a Countdown Fund at the beginning of the year so that you do not need to put as much money aside from each paycheck. For instance, if you start saving in January for Christmas next year, you will only need $50 per month to achieve your goal in December ($50 x 12 = $600).

3. Give a Voucher

Believe it or not, there are number of gift ideas that cost little-to-no money at all. A voucher is one way to save money and avoid the use of debt. Consider creating a voucher that is redeemable for something that the recipient would actually like. For instance, my wife likes to have a night out with the girls, so I have considered creating a voucher that is worth “One night of watching the kid at the time of your choosing.” Our first child is due in January, so I am sure that she will appreciate this gift. Other ideas for vouchers include a neck or foot massage, dog sitting, or even a game or craft night. Offering your time and skills to those you care about is always a great gift. Consider giving the voucher in a jar of someone’s favorite candy, or with a note expressing how much you care about them. Get free printable gift vouchers here.

4. Create Something Meaningful

If you are the type of person who is creative and that likes DIY projects, then this is probably the best option for you. Consider using your talent to create something that is meaningful for your loved-ones. I have seen people make quilts, clothes, and even furniture; the sky’s the limit. Websites like Pinterest and YouTube are perfect for DIY projects. Pinterest has literally thousands of ideas, and YouTube is a great way to learn how to make various crafts. Simply search “DIY” on either site and you find will plenty of ideas to inspire you. You may even find yourself a new hobby that lasts beyond the holidays!

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5. Browse Amazon Wish list

You know the scenario: You go to the mall looking for that perfect gift for someone and you actually find it! But there’s a catch. It’s double what you were hoping to spend, but it’s just so perfect that you get it anyway. And besides, if you don’t get it right now it might sell out and be gone forever! Sound familiar? I’ve done this many times. A great way to get someone the perfect gift and maintain control of the cost is to check out what they have on their Amazon wish list. This not only shows you what they want, it allows you to assess the price in a less emotional setting than a store. Shopping on Amazon is also great because you can see your total at checkout and adjust your basket, instead of trying to add up multiple totals from different stores as you run around the mall to see if you’re within your budget.

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All of these suggestions are meant to help you stay within your budget this holiday season, but the best way to stay in your budget is to make up your mind not to blow it! It can be difficult when you find the perfect (way too expensive) gift, or when your kids use their big eyes to beg you, but if you stand strong and commit to honoring the amount that you have agreed on you will have a far less stressful and much more enjoyable holiday.

About the author: Check out more money related tips from Deacon on his blog or follow him on Twitter.

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