How to Avoid Holiday Spending Debt

Updated December 17, 2021

The holidays are for making memories.

But there’s one memory you don’t need: Credit card bills reminding you that you overspent on gifts and parties and decorations and everything else. 

To ensure you don’t start 2022 under a new pile of debt, we have tips to help you avoid overspending this holiday season.

4 Tips for Avoiding Debt During the Holidays

It’s easy to get caught up in the spirit of the season. Check out these tips to help ensure you aren’t still paying off 2021 purchases long after this year has passed.

1. Follow the Four-Gift Rule

Instead of filling the room (and maybe the next) with presents, consider the four-gift rule. It’s a strategy that sets clear boundaries on what types of gifts to get each person on your list and caps how much you buy, so you don’t go overboard on Christmas spending. 

The rule even rhymes, so it’s easy to remember:

2. Find Toys for Under $30

The littlest people to shop for can be the biggest source of gift-giving stress. 

You want to impress the kiddos with the coolest toys of the season, but spending $100+ on one gift for one child can leave you with debt you’ll be paying off well into 2021.

Don’t worry though. There’s still an opportunity to land an awesome gift without overspending. We rounded up the hottest toys of 2021 — each for less than $30.

3. Avoid Boredom Buying

Maybe you don’t necessarily have a long list of gifts to buy.

But, you know what it’s like when it’s the holidays, and you’re stuck inside with nothing but time on your hands. Out of boredom, you scroll through a couple of your favorite stores’ sites… and three hours later, you can’t remember if you fed the cat, but you somehow spent a week’s worth of grocery money on closet organizers. (Or is that just us?)

You’ve just engaged in retail therapy: That’s when you shop to cheer yourself up or stave off boredom.

The euphoria of scoring a sweet deal on a purchase can be short lived, though, when you open next month’s credit card bill. Check out these tips for how to avoid using retail therapy to get you through the holidays.

4. Stick to a Holiday Budget

It’s not too late to set spending limits for this holiday season — especially if you’re one of those last-minute shoppers. (Guiltily raises hand.)

Before figuring out what you should spend your money on, it’s essential to figure out how much money you can spend. And that means establishing a budget.

If you set aside an hour to review your numbers and create a holiday budget, you’ll be able to sustain that holiday cheer (and a little more cash) long into the new year.

Whichever holiday budgeting method you choose, having the information at your fingertips will help you stick to your spending limit and avoid impulse buying.

And wrapping up the holidays without taking on extra debt is a very merry way to start 2022.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

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