How To Avoid Holiday Debt: Smart Spending Tips

Author: 1st Choice Savings & Credit Union | Published: December 2, 2025

The holiday season is a time for joy, family, and celebration, but it can also bring financial stress if spending gets out of control. Many people start the new year with debt that takes months to pay off. The good news? With a little planning and discipline, you can enjoy the holidays this year without breaking the bank. Here are some practical tips to keep your finances in check this December.

Set a Holiday Budget- and Stick to It

Before any of your shopping begins, decide how much you can realistically spend without dipping into your savings or relying on credit. When you’re doing this, include anything you plan to spend during the season such as gifts, decorations, or travel. Once you have this number, track your spending to make sure you stay within your limit.

Pro Tip: Use a budgeting app or a simple spreadsheet to monitor these expenses in real time.

Make a Gift List & Prioritize

Impulse buying is one of the biggest holiday budget busters. Create a list of people you plan to buy fits for and set a spending limit for reach. If your budget feels tight, consider thoughtful, low-cost gifts like homemade gifts or treats, or quality time.

Shop Smart & Compare Prices

 Take advantage of sales but be cautious. Don’t assume that every ‘deal’ you see is a bargain. Compare prices online and in store before making your purchase.

Plan Early

Start a holiday sinking fund for next year. Setting aside a small amount each month, even if it’s $20, will help make a big difference when December rolls around again.

Focus On Experiences, Not Just Physical Gifts

One of the most important things to remember about the holidays is it’s about connection, not consumption. Plan activities like Christmas baking together, going to look at Christmas lights, or watching movies instead of focusing on the gifts itself. These experiences often create more lasting memories than expensive gifts.

Avoiding holiday debt is all about planning and mindfulness. By setting a realistic budget, shopping smart, and focusing on what truly matters, you can enjoy the season without the financial stress that commonly comes with it. Your future self will thank you!