Stop Over Splurging: 10 Debt Avoidance Strategies To Use This Year
The post-excitement of the holidays has died down and most likely, your wallet is feeling the pressure. So much so that 46% of Americans still have holiday debt from the previous year.
If you fall into this camp and tend to splurge, you don’t need to make the same mistake for 2025.
Our 10 debt avoidance strategies will help you get through the year without breaking the bank!
#1: Have A Dedicated Holiday Spending Account
If you have all your cash in one bank account, what’s stopping you from going overboard?
A holiday fund is an easy way to keep the overspending to a minimum. Start by setting a clear goal of how much you’re willing to spend this next season. From there, put whatever amount you decided on into a special savings account you use for holiday shopping. You can also use this method for birthday gifts!
Once it’s gone, it’s gone. With this strategy, you can keep everything organized and avoid spending more than you should.
#2: Use “Buy Now, Pay Later” Wisely
“Buy now, pay later” (BNPL) debt has exploded in recent years thanks to platforms like Klarna and Afterpay.
These loans let you pay a portion of the total price in two, three, or four installments, depending on how much it’s worth. And unlike traditional credit cards, you’re less likely to ruin your credit if you miss a payment.
But you still need to pay it back at some point. Not doing so could still land you in hot water or a nasty debt trap if you’re not careful.
Use BNPL only if you know you’ll have the money to pay it off. You’re better off saving for it than taking on an extra loan that might set you back financially.
#3: Book Flights Ahead Of Time
While millions of Americans travel for the holidays, 29% are going into debt to fund their vacations.
We get it. You want to see your family and make the most of your vacation. But that doesn’t mean you need to pay hundreds more on a flight ticket to make it happen.
The earlier you book your ticket and accommodation, the better. Most airlines and hotels start to raise prices around three weeks before the holidays, so booking anytime before then (preferably 2-3 months before) will help keep costs down.
If you’re already cutting close, book on an “off” day or week. Flying from December 15th to the 20th will almost always be cheaper than a day or two before Christmas.
#4: Create A Gift Budget — And Stick To It
Think about the last time you went grocery shopping without making a list. Chances are, you had a few things you didn’t need in your cart by the time you checked out.
This scenario is virtually the same for holiday shopping. Most people won’t have a budget or list, and those that do make some “exceptions” that end up costing them hundreds more than they planned.
The whole point of making a gift list or budget is not buying anything beyond that.
So whenever you go to the store or log into Amazon, always keep that list or dollar amount in your mind when browsing.
$100 is $100, no exceptions.
#5: Don’t Leave Saving Till The Last Minute
Does your family have a big holiday gift list?
Start saving earlier if you can. Take an average of the last two or three holiday seasons to know what you need to save up. Each year might be different, but you’ll get a feel for how much to put in your holiday fund when you’re ready to shop.
The closer you are to your goal, the less likely you’ll take on debt or overspend.
#6: Take Advantage Of Discounts When They Pop Up
With countless holiday sales throughout the year, you could save hundreds just by taking advantage of discounts alone.
But how do you know when these sales are happening besides the obvious days like Black Friday? Sale alert apps like CamelCamelCamel can track prices on sites like Amazon or other retailers.
Other stores let you sign up for their newsletter and send you emails whenever there’s a last-minute deal or new coupon available.
Think of these deals or discounts as free money and don’t pass them up!
#7: Use Up Those Credit Card Rewards
Many credit card companies offer generous rewards and cashback programs for loyal members.
So, if your card has these perks, why not save them for holiday shopping? Redeeming them could cut your out-of-pocket expenses. Check to see what your balance is and how long you have to use them before they expire.
This simple trick could help you enjoy this year’s holiday season without sacrificing on gifts or experiences you love.
#8: “Recycle” Gifts
Do you have household items you don’t use anymore?
There’s no need for them to accumulate dust. Give these items a new life by gifting them to someone you know would appreciate them. It’s a crafty way to ensure everyone has a gift this year without spending a dime.
As long as it’s in good shape and you find a gift box or bag, you’ve got the perfect and practical gift.
#9: Find Cheaper Alternatives
Too many people get into debt just to buy someone the latest iPhone or gaming laptop.
And since the newest iPhone model could go well over $1,000, you might end up with no choice but to sacrifice on other presents or put it on credit just to afford everything.
Truth is, you don’t need the newest edition of something when there’s a cheaper alternative somewhere. Even buying a slightly older or second-hand model could save you hundreds.
You also have plenty of brands to choose from, so shop around. Many of them could have the same or even better products while charging you half the price.
#10: Bundle Gifts By Group
Let’s say you’re having a Christmas party and inviting three couples. Instead of buying a present for each person, why not save a bit and “bundle” them together?
From household items to gift cards to their favorite restaurant, there are many group presents out there that are just as meaningful.
Shop around and look for a present you know your favorite couple would enjoy together while saving you some valuable time and cash.
The Bottom Line
Seeing your loved ones’ faces when you buy them a present is heartwarming. But you don’t have to go into debt to make that happen.
By following these practical tips, you can plan or get creative with your gift-giving for the next holiday season without spending more than you need to!
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