Holiday Déjà vu: Avoiding the Holiday Debt Spiral

Are you trapped in the holiday debt spiral like so many others? Oh the holiday expenses! Even though we know they’re coming, we simply don’t prepare for them. As a result, when the season arrives, we’re caught with our shorts down and turn to our credit cards to bail us out.

It is difficult to move forward, financially or otherwise, when your shorts are around your ankles. It’s so easy to trip! This year, let’s put on our big-boy pants and get out of this cycle. Credit cards make it incredibly easy to avoid responsible spending. Credit cards, while indispensable, are no substitute for sound money management.

Young shopper hands to camera

If you must use your cards for holiday expenses, do so with a firm commitment to pay those holiday charges in full by mid-year. If you don’t, the balances will drag on until the next holiday season rolls around, and you will be in a nastier financial position than you were the year before. Sound familiar?

Here are a few tips for you that may help.

Prepare a Budget

If you’re in that holiday debt spiral, I’m betting you don’t have a budget. Stop putting it off. It really isn’t that difficult a process and there are countless resources on the internet that can help you. It doesn’t have to be complex, just comprehensive. In the end, it is just a record of what you spend versus what you earn. If the difference between the two is a positive number, you are in pretty good shape. If the difference is negative, you need to cut back your spending. It really is that simple.

Charity Begins at Home

A generous disposition is a good thing, but giving beyond your means is just as foolish as spending beyond your means. If you’re the type of person that gets inebriated with holiday spirit, you need a twelve step program to get back on track. The first step, we’ve already discussed … a budget.

Here Are 11 More

  1. Avoid holiday debt by staying focused on your long term goals. Keeping these objectives at the front of your mind during the holidays will help restrain your urges.

  2. With the advent of fall, start thinking of additional ways you can reduce everyday expenses. Forgoing the daily Starbuck’s latte, bringing your lunch to work and cutting back on dining out are simple and relatively painless things you can do to save money. Put the money you are saving aside for the holidays.

  3. Jobs are difficult to find these days, but getting a part-time job for the short term can give you a nifty little stockpile of cash for the holiday season.

  4. Holiday gifts don’t have to be bought, they can be made. If you have a talent for sewing, woodworking, knitting, baking, etc., consider making some of the gifts for those on your list. Gifts that are hand-crafted can be among the most appreciated.

  5. Too many of us forget that it is the thought that counts. It isn’t the price of the gift that’s important; it’s the sentiment behind it. Gift giving should not be a spending contest among friends, family and co-workers. Spend what you can afford—period!

  6. Avoid last minute gift shopping. Begin your shopping early. The deeper you get into the season, the narrower your choices become, often forcing you to buying costlier items than you planned for.

  7. Shopping online can help you to avoid holiday debt by saving you both time and money. The amount of time you can save is substantial. Use this captured time to enjoy your family and friends. You will save money too! It is much easier to comparison shop online and shipping is often free. You’ll save gasoline, parking fees and the cost of medication for that terrific headache you won’t get by avoiding the holiday fray.

  8. Take a sharp pencil to that gift list. Do you really need to buy a gift for everyone on that list? I’m guessing you don’t. Trim it!

  9. If the Great Wall of China and your holiday display are the only two man-made structures visible from space, maybe you need to cut back. If your electric meter is spinning like an Iranian centrifuge, it’s time to turn down the lights.

  10. Watch the supermarket offers. It is often possible to get your holiday turkey free if your grocery bill meets or exceeds the store’s set minimum. This is a popular incentive used by supermarket chains around the holidays. Look for a store that offers it. You are going to be buying groceries anyway.

  11. If you are a gift card giver, consider purchasing gift cards online. Sites like CardCash and Cardpool offer discounts of up to 22 percent from face value and shipping is free!

Never forget that excessive holiday spending can ruin your entire year. Who wants to begin the New Year dealing with excessive credit card debt, plummeting credit scores and high interest expenses?

Any tips from our readers? Now there’s an inexpensive gift—share a tip to help someone else avoid holiday debt!



  • The holiday commercials really whet my appetite, however as you said keeping focused on your long term goals helps to control these urges. I always use free travel insurance from my credit cards and I also use air miles to fund any getaway, I always use sites like Trivago to find the best deals. Thanks for sharing these ideas, great post, please keep them coming.

  • Nick /

    Holiday spending definitely adds up, whenever I feel the compulsion to just go away I look at my financial position which soon knocks me back to reality. Cutting up the credit cards also helps and only spending on Airmiles credit cards as Shobir says can help fund a cheap getaway. Great post, thanks for sharing the insights.

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