What to do NOW to Avoid Holiday Debt

posted in: Personal Finance

If you were aghast at how much you spent on holiday gifts when the credit card bills arrived last January, now is the time to start thinking about how to avoid a repeat performance of holiday debt. Even though it feels painfully early to start thinking about the holidays, starting now will give you plenty of time to budget, build a shopping fund and do a little early shopping so you’ll hardly have a bill to pay.  

Look Back

It’s an ideal time to set a budget for your holiday shopping. Make a loose list of what you bought and spent last year, and then evaluate your current financial situation. Can you spend the same, spend more, or do you need to cut back? If you need to cut back, look at groups you exchange gifts with, like family or co-workers, and suggest a different scenario, like drawing names, a White Elephant exchange, or with family, propose that adults only give gifts to the kids. The other people in your group are probably in the same boat and will appreciate the suggestion!

No Holiday Fund? Start Stashing Now

If your bank allows for auto withdrawals into a savings account, increase that amount so you can save as much as possible. 

If not, set up an account with an automatic savings platform, like Acorns, which will take the “spare change” every time you use your linked card and invest it for you. What I mean by this is that if you spend $10.50 on your debit card, Acorns will take $.50 and add it to your Acorns account. You can even set it for 2x or 3x roundups and designate an additional amount to be withdrawn every month. By Black Friday, you’ll have a nice little pot to shop with. 

Use a Savings Tool When You Shop

To avoid a mad dash in December – and potentially overspending because you’re in a rush – start shopping now. As you build your gift list, set deal alerts with Slickdeals.net, and you’ll be notified when your items go on sale. Also, install the Slickdeals browser extension to be alerted to available cashback and coupons as you shop.

Get the Best Deal on Online

You can find so many amazing gifts online, but it’s hard to tell whether or not you are getting the best price. Try Googling the item and clicking on the “Shopping” tab for info on where you item is being sold and for how much.  In this tab, you can use a variety of search filters to narrow your search. 

Use the Right Credit Card

Before you check out, make sure you are using your credit card that offers the best cashback or points on your purchase. That might be a store card, like Target’s or Amazon’s cards that offer 5% cashback, a travel card that allows you to earn points towards your next vacation, or another card that offers valuable benefits, just for using it.  Speaking of credit cards, remember to read those promotional emails that you receive from your credit card carrier. They regularly partner with retailers to offer exclusive discounts for their cardholders, so it’s worth a look! 

Get Creative

Starting early can also give you time to make some of your gifts, if you’re creative that way.  DIY gifts can be a huge money saver, and  the act of hand-making knitted items, ornaments, collages, etc, will be so much more pleasant if you’re not frantically throwing things together at the last minute! 


Follow Trae Bodge:

Smart Shopping Expert

Trae Bodge is an accomplished lifestyle journalist and TV commentator who has specialized in smart shopping, personal finance, and retail for more than a decade. She has appeared on TV over 1,000 times; including Today Show, GMA3, NBC Nightly News, Inside Edition, and network affiliates nationwide. She has been named a Top Voice in Retail by LinkedIn, and her expert commentary has appeared in Forbes, USNews.com, Kiplinger, Yahoo Finance, and numerous others.