Avoid Holiday Debt: Expert Tips to Stay Within Budget

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Here's how to keep from overspending this holiday season.

As wonderful and magical as the holiday season can be, it's also a time when a lot of people wind up in financial trouble. For some, holiday expenses can be extremely overwhelming, and even those who set up a holiday budget often struggle to stick to it.

In a recent survey by Affirm, 70% of Americans say they typically go over budget during the holidays. But that could lead to consequences like credit card debt, which is a difficult way to start off the new year.

If you're worried about busting your budget this holiday season, here are a few tactics worth trying.

1. Make sure your budget is realistic

You might tell yourself you can only spend $600 during the holiday season. But do you really have $600? If you don't have money in savings to spend on holiday purchases -- and you typically only manage to squeeze an extra $100 out of your paychecks each month once all of your bills are paid -- then that $600 budget won't do you much good.

A better bet is to figure out exactly how much money you'll have access to this holiday season. And if you don't like the number you come up with, see if you can raise it by cutting back on some expenses temporarily. For example, if you normally spend $25 a week on takeout, see if you can replace those meals with home-cooked versions. That could leave you with a few hundred dollars more in your bank account by December.

Similarly, you can look at boosting your income with a temporary side hustle. Many stores need more hands on deck during the holiday shopping boom, so you may find that it's pretty easy to get work. And some stores offer employee discounts, so if you get a side job at a store you also intend to shop at, it could be a double win.

2. Spend time researching products

Just because a product is listed as being on sale doesn't mean you're getting the lowest price for it. If you really want to stick to your holiday budget, it could help to shop around for the things you're looking to buy.

Incidentally, that doesn't just apply to actual products. If you're planning to travel for the holidays, it pays to research multiple itineraries to see which is most cost effective.

3. Remember it's the thought that counts

Many people go overboard during the holidays in an effort to be generous, and that's certainly commendable. But landing in debt so you can shower your loved ones with gifts isn't a good idea. Instead of stretching your budget, try focusing on low-cost or homemade gifts that come from the heart. You may be surprised at how well someone receives a batch of cookies from your oven.

Spending more than you can afford to during the holidays could mean starting off 2022 in a less than ideal place financially. And you deserve better. These tips could be your ticket to avoiding that fate -- and kicking off the new year with a clean slate.

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