What You Can Do Now to Avoid Holiday Debt

1. Look back

It’s an ideal time to set a budget for your holiday shopping, and the best place to start is your spending history from last year. And don’t rely only on your memory. Using your credit card and bank statements as a guide, make a list of whom you bought gifts for with an estimate of how much you spent per person.

This may feel like a hassle, but if you make a chart for yourself with a column for each year, keeping track of your holiday spending will be a breeze.

If you carried debt into the New Year, consider spending less per person this year and/or removing extraneous people from the list (maybe send a holiday card instead?)

2. Change it up

If you can’t arrive at a comfortable budget with your current list of recipients, look for what I call “spending traps” in your tally, i.e. did you spend a lot on gifts for the whole family? Or how about gifts for coworkers?

Consider suggesting a new approach this year, like drawing names amongst family members. Or perhaps everyone only buys for the kids and elders. At work, how about a white elephant party?

In either case, set a spending limit to keep things affordable for everyone.

3. Build a holiday fund

Setting money aside for holiday gift-giving makes it much easier to pay for your gifts in full each month. If you have a little wiggle room in your budget, move that money into a savings account designated for holiday shopping and use those funds to pay your bill.

If you don’t have wiggle room, consider signing up for a “spare change” app, like Acorns, which siphons and then invests the spare change each time you use your debit or credit card. It’s a pretty painless way to save because the increments are so small.

Another option is to sell things you no longer need. From gold to old tech, this can be a good way to drum up some extra cash. For example, if you have gold jewelry that you don’t wear or is broken, you can sell it to The Alloy Market. You can request a free, insured Welcome Kit which you use to send in your gold items. One the the items are received and inspected, you will receive an offer. Accept the offer and get paid very quickly by your method of choice! And, if you find a better offer elsewhere, The Alloy Market will match it with their Best Offer Guarantee.

4. Eliminate excess spending

Another savings tactic is to cut back on non-essential spending for a few months. This is just temporary, but it could include eliminating takeout, or just limiting the number of times you can order in per month. Or how about salon appointments? Could you do your nails yourself for a while? And don’t forget your daily latte. Make your coffee at home for the remainder of the season.

Every time you forgo one of these things, shift what you saved into your savings account to use for holiday shopping. It will add up faster than you think!

5. Get started now

You may have heard that several large retailers, including Amazon, Target, Walmart, and Best Buy, are planning sales events in early October. Start working on your shopping list now, so when these sales hit, you can start looking for deals. Plus, spreading your shopping out across a few months helps to prevent the stress of a shopping bottleneck in December!

6. Be creative

Are you crafty, handy, or a good baker? Save money on holiday gifts by making them yourself. Giving handmade gifts is personal and heartfelt, and SO much less expensive than giving something store bought.

Ideas include, handmade holiday decor, collages, and baked goods. Visit YouTube or your favorite craft store, like Michael’s or JOANN, for inspiration.