7 creative ideas for a debt-free holiday

By Miranda Marquit

Reviewed by Natasha Pearce

Dec 04, 2023

Read time: 3 min

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The holidays feel magical when the focus is on family, friends, and food. Unfortunately, the pressure to spend money on everything from the office White Elephant party to gifts for your cousin’s kids can dampen the joy.

When I had a lot of debt, the holidays stressed me out. I wanted to enjoy the season without getting into even more debt. After all, the name of the game is to find ways to get rid of debt, not make it grow. So I experimented with creating my own holiday spending boundaries. They work, and they get easier over time.

Here are some of the holiday budgeting tips that help me keep my spending under control during one of the most expensive times of the year.

Prepare a holiday budget

Overspending is a thing, so I like to put together a special holiday budget. This includes my spending plan for gifts, entertaining, travel and decorations. This way, I already have a plan and can be realistic about what I’ll spend during the holidays.

My holiday budget includes a gift list, which is useful when shopping for sales. Having everything planned ahead makes it easier to track spending and stick to the budget.

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Plan your holiday travel

If you’re traveling during the holidays, the costs can add up quickly. Look for discounts and perks. When sending my son to visit his dad for Christmas, I often try to buy tickets on whatever days of the week are listed at cheaper prices. Sundays and Wednesdays are often good. During the holidays, I’ve also gotten great deals traveling on the big day. If you’re willing to fly red-eye on December 25, it’s much cheaper than trying to book a flight for December 23 or 24.

Make a budget for your travel days, too, and get creative with ways to stay on budget while you’re on vacation.

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Unconventional holiday entertaining 

Hosting a dinner can mean huge costs—food, drink, party favors. Instead of doing everything yourself, consider hosting a potluck. You can save money on your holiday meal if everyone brings a side dish or drink. 

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Trim the gift list

When it comes to gifts, consider a different approach than buying something for everyone. My family has a rotation where each person buys one present for someone else. Every year, the rotation changes. It’s a way to keep from getting overwhelmed—and going into debt—buying gifts for everyone. Other families do only homemade or service items. Figure out what works for you and create newer, cheaper traditions.

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Get a holiday side gig

Sometimes it’s not just about cutting back. Earning more money can also help you get through the holiday season without adding to your debt. You might be able to work part-time at a store that’s looking for holiday help, drive for a rideshare service or even babysit others’ kids while they go to holiday parties.

Maybe you can offer cleaning or organizing services following the holidays and use the money you earn to pay down some debt (and congratulate yourself for not adding to it).

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Thrift for decorations

You might be surprised at what you can find at the thrift store or dollar store. Thrifting is a proven strategy for cutting costs and reducing debt. Many of my holiday decorations come from the consignment shop, including my door wreath and garland. All of my “fancy” serving platters are from the dollar store. 

When deciding how to budget your money for the holidays, make a note of which items you might be able to get cheaper second-hand or at the dollar store. 

Create a sinking fund

Now’s a perfect time to plan next year’s holiday budget. A sinking fund is a savings account that’s set up for a specific purpose. You can put money in regularly, all year long. Use a free budgeting tool like Achieve’s MoLO app to help you organize your finances and find money that you can put toward your goals. Open a high-yield savings account specifically for holiday costs. Add money to the account weekly or monthly. Come next fall, you can spend less time figuring out how you’ll pay for stuff, and more time enjoying time with the people who matter to you.

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.

Natasha Pearce - Author

Natasha is Achieve’s Director of Social and Community. For over 10 years, she has built communities across social media and blogs through enriching storytelling that helps brands deepen connections with consumers.

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