Avoid Holiday Debt: How to Celebrate without Breaking the Bank

The holiday season is fast approaching, a time filled with festive lights, family and friend dinners, and the joy of giving. But along with all the cheer often comes the pressure to spend. Between gifts, travel, and holiday events, it’s easy to let your budget snowball out of control.

Gift giving is a wonderful tradition, but it shouldn’t leave you with a financial hangover come January. According to LendingTree, 36% of Americans took on holiday debt in 2024 averaging about $1,181 per shopper. There is good news. A little planning goes a long way toward keeping your wallet and stress in check this season.

Here are a few simple ways to celebrate the holidays without going into debt:

1. Set a personal spending limit

Before you start shopping, decide what you can realistically afford. Set a total holiday budget, not just for gifts, but also for travel, decorations, and gatherings. Focus on what matters most to you and if needed, talk with friends or family about setting spending limits to keep things light-hearted and pressure free!

2. Calculate the real costs

Holiday expenses go beyond just gifts.  We forget that gas, flights, wrapping paper, dinners out and even postage all add up. Prices have gone up across the board, so it helps to plan early and make a list of everything you’ll need. Knowing your total holiday cost upfront helps you avoid last minute splurges and stay within your comfort spending zone.

3. Track your spending as you go

Even with the best intentions, it’s easy to get swept up in the holiday excitement. Use a spreadsheet, budgeting app, or even the notes app on your phone to keep tabs on your spending. This will help you to see where your money goes and to adjust before things get out of hand. It’s better to be prepared and in control of your budget all season long.

4. Use one card and make it work for you

Consider a single card for your holiday purchases like the PFFCU Rewards Visa® Credit Card, which lets you earn rewards while you shop. As you buy gifts, you’re also earning points you can redeem later for cash back, travel, or even more gifts.

5. Redeem those Rewards

If you have been saving credit card reward points, now ‘s the perfect time to put them to good use! You can often redeem points for cash back, paying yourself back, or digital gift cash, which is a great way to stretch your holiday budget without extra spending. Who doesn’t like gift cards?

Just remember to keep your credit use in check. “Buy now pay later” offers can sound appealing, but make sure you understand the fine print and set reminders so you never miss a payment.

The holidays should be about connection, not credit card debt. With a bit of planning, realistic budgeting, and smart spending, you can enjoy all the magic of the season without the financial stress that often follows. Remember, the most meaningful gifts aren’t always the ones you buy, they are the moments you share with the people you love.