Should you borrow if you’re in a holiday cash crunch?

By Gina Freeman

Reviewed by Kimberly Rotter

Dec 08, 2023

Read time: 3 min

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It’s the holiday season in all of its eggnog-swilling, yard-lighting, office-partying, fancy-dressing, gift-giving glory, and you really want to make some good memories. But your hours were cut this fall, the boss is a Scrooge when it comes to bonuses, and a car repair sucked up all of your spending money for the next two months. 

You dread telling your kids that Santa’s broke this year, but the majority of your money goes to debt payments, not leaving you with much for seasonal spending. There may be a way to bridge the gap and create the cash flow you need.

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Using a personal loan to consolidate debt

If keeping up with your monthly payments is stretching your budget to the limit, consolidating your debts with a personal loan might relieve some financial strain. The way it works is you take one new loan and use it to fully or partly pay off your other debts. Doing this could reduce the number of bills you have to pay and help you streamline and organize your finances. Even better, if you can get a lower interest rate, a longer repayment term, or both, you could find yourself paying less every month, and that could free up cash flow for other expenses (like the holidays). 

Personal loans tend to come with lower interest rates than credit cards, so if credit card debt is weighing you down, a debt consolidation loan could be a holiday gift to yourself.

Review your financial options

But, before hopping online and applying for a loan, consider other options for hacking your holiday expenses. Can you sell things to generate some cash? Can you pick up a temporary side hustle?  Here are a few of our favorite tips.

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People before presents

It can be very fulfilling to reimagine your holiday season in a more old-fashioned, less costly way. Getting away from commercialism is a goal that may be more common than you think.

There’s nothing about the holidays that requires a huge budget. Talk to your family and discover how creative you can be with decorations, special foods, and inexpensive activities. Your kids may welcome the chance to help out and participate more, especially with the fun stuff like cookie baking and card making. 

Invite friends over to create ornaments. Have a potluck dinner or make gallons of chili. Play games. If you get snow, have a snowball fight in the yard—kids vs. adults, cousins vs. cousins, guys vs. gals, whatever. If you have no snow, make a huge batch of popcorn and fire up all the holiday movies you love. 

Ask your circle to dial back the cost of gifts this year. Others may be relieved to spend less as well, at least on the adults. Get as creative as possible with gifts. The more personal, the better. If other people still want to spend the usual on you, don’t feel obligated to reciprocate or guilty if you can’t once you’ve given them a heads-up.

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Go traditional

Don’t forgo the things that mean the most to you—just spend less doing them. Make celebrations special by dressing up. The best clothes you already have are perfect. 

Tell everyone how much they mean to you. Send holiday cards (they can be homemade or bought on sale—no one cares what you spend). Make holiday candies or get inventive with hot drinks. Sing holiday songs or attend traditional concerts. Enjoy your old favorite activities, and make some new traditions, too.

Dust off your old favorite holiday decorations and make friends with them again. And don’t forget to create an ugly holiday sweater with a top that’s seen better days and the cheesiest ornaments you can find. Wear it proudly. 

Budget for what’s most important

The biggest reason to budget like a boss is to keep more money for what’s important to you by spending less on other things. And the holidays are no exception. If it just won't be Christmas, Hanukkah, Kwanzaa, Saturnalia or whatever you celebrate without a particular meal, gift, or activity, find a way to have it. Usually, that means choosing to forgo other things that mean less. 

If you’re not sure how to organize your finances to make holiday spending less stressful, chat with a debt expert who could help you figure out whether a loan would help you get ahead.

And of course, the chief joy of the season is time spent with friends and family. It’s your holiday. Enjoy the love.

Gina Freeman - Author

Gina Freeman has been covering personal finance topics for over 20 years. She loves helping consumers understand tough topics and make confident decisions. Her professional history includes mortgage lending, credit scoring, taxes, and bankruptcy. Gina has a BS in financial management from the University of Nevada.

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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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