5 ways to reduce holiday debt and stress

By Miranda Marquit

Reviewed by Kimberly Rotter

Dec 19, 2023

Read time: 2 min

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The holidays are looming, and the pressure to spend is at an all-time high, but you already feel like you’re drowning in debt. Sound familiar? Most of us have been there. Managing your mental health can seem like an almost impossible task under these circumstances. 

Even though it can be tough, there are some things you can do to manage your mental health while you have debt. The goal here is to avoid making financial choices that might make you feel worse. We want you to enjoy the holidays with a focus on the people and experiences that matter most to you.

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1. Be creative with holiday spending 

Sometimes, just having a plan can help reduce your anxiety. Plus, having a budget for the holiday season (including a gift budget) can help you avoid going further into debt.

Put together a realistic budget for the holiday season. Here are a few ways to bring the numbers down:

  • Do a gift exchange instead of buying gifts for everyone. Would friends or family be interested in a randomly assigned gift exchange with a dollar limit?

  • Plan a potluck holiday dinner rather than going out or hosting alone. When everyone pitches in, it saves time, money, and mental capacity.

  • Encourage homemade gifts from the heart rather than bought items. This can also work for decorations. This category includes gifts of time.

  • Thrift for decorations, holiday outfits, and gifts that you decide you need to buy. If the timing works, you could also shop for gifts during after-Christmas sales.

  • Create lists to stay organized, and stick to them. Sticking to a list is one way to control impulse buying.

Here’s a pro tip. There's no minimum price tag for a holiday season. You aren’t required to spend money at all. If you can’t, you can’t. If you have to choose between an extremely frugal holiday season and spending money you don’t have, consider how each option will make you feel in January.

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2. Ask for a skipped payment

If you’re struggling, you might be able to get immediate relief on your budget by asking your creditors to let you skip a payment. Many creditors have programs to help people experiencing hardship. A payment pause could create temporary room in your budget. Be aware that there might be a fee, and your skipped payment will eventually have to be paid. 

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3. Consolidate your debts

One way to manage your monthly budget is to consolidate your debts (take a new loan and use it to pay off other debts). Consolidation could reduce the number of monthly payments you have to make and might get you a lower monthly payment overall. Plus, if you could lower the cost of your debts, consolidating might help you get rid of debt faster compared to making minimum payments. Credit cards are designed to keep you in debt for a long time. Having a set loan payoff date could provide peace of mind.

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4. Practice self-care

Even though it can be hard to carve out time to practice self-care, try to make time during the holiday season. You don’t need a lot of time or money to rejuvenate. Try these:

  • Short walk

  • Hot shower

  • Quiet reading

  • Color or draw

  • Meditate

  • Go to bed a little earlier

  • Sleep in a little later

Find a small thing that brings you joy or relaxes you, and take a little time to do that. 

Get back to basics and focus on what’s important (it’s not the spending). Managing your money and your mental health during the holiday season are gifts to yourself.

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5. Ask for help

A little help can have a big impact. Ask for help this holiday season. If you have children, consider signing up for Angel Tree and Toys for Tots programs to help you get gifts that you might not be able to afford on your own. 

Check community resources, too, like local food banks. Some cities also have programs to help cover utility costs during the holidays.

Reach out to your network to see if there are people willing to help or who know of programs designed to aid people during this tough time. 

If you're really struggling (with debt or with depression), and a walk or shower doesn’t cut it, get serious help! There are free and low-cost resources out there that are easy to access.

  • The Depression and Bipolar Support Alliance and other national mental health resources offer free online group sessions.

  • Debtors Anonymous offers in-person, phone, and online meetings where you can create a plan for dealing with debt with the support of a community who's been in your shoes.

  • Your health insurance plan might cover mental health services.

  • The EAP (employee assistance program) at your work might have resources to offer.

If you aren’t sure what to do about your financial situation, you can have a free conversation about it with an Achieve debt expert. We want to help you feel good about the financial path you’re on.

Author - Miranda Marquit

Miranda Marquit is an award-winning freelance writer and podcaster who has covered various financial topics since 2006. Her work has appeared in numerous media outlets, and she is frequently asked to host workshops and appear on panels on topics related to financial wellness. She is the co-host of the Money Talks News podcast and a consumer finance advocate and spokesperson for moving hub HireAHelper.

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Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.

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