Skip to main content

Plan your spending to avoid holiday debt

For shoppers, seeing “November” on the calendar means Black Friday – the unofficial start of the holiday shopping season – is just around the corner. Taking a few minutes now to plan your holiday spending could help you avoid taking on debt that stretches well beyond the New Year.

Start by creating a holiday spending plan. Decide how much you can afford to spend this season. Include gifts, travel, parties, decorations, and any other holiday expenses. Consider discussing the plan with your family members. Look at how much you’ll earn between now and the holidays and determine how much you’ll need to set aside each paycheck to save the amount you need.

Low-cost ways to give

Having trouble buying gifts for every one of your friends and family members? Chances are they are, too. Consider different ways to make the holidays fun without breaking your budget.

Holiday gift exchange

Draw names and only buy a gift for the person you choose.

Make something special

Sometimes the best gifts are the ones you make yourself.

Give your time

Offer to provide a service, such as cleaning or cooking a meal, for a day, a month, or the year.

Make a list of the people you’re giving gifts. Decide how much you can spend on each one. If you have specific gifts in mind for each person, start comparing prices online and keep an eye out for discounts and sales.

Keep track of what you spend. If you find that you don’t need to spend as much as you thought in some categories, shift the extra funds to others. Or, save the money and give yourself the gift of a head start in the New Year.

Avoid impulse purchases. Instead, make a note of the product, where you saw it and how much it was. Consult your spending plan, and, if there’s room, return for the purchase. Using cash, like three quarters of Americans say they do for most of their holiday purchases, can also help you avoid splurges, as well as potentially costly fees or interest from debit cards, credit cards, layaway, or store financing.

Leave your credit cards at home unless you know you need them for a specific purchase and you have a specific plan to repay the debt.

Check the details when purchasing a gift card. Any fees that may be imposed in connection with the card will be provided on or with the card. Dormancy, inactivity and service fees (that is, fees for using or not using the card) are not allowed unless you don’t use the card for a year. If the card has an expiration date for the funds, it will also be listed on the card. The Federal Trade Commission has more information on buying, giving, and using gift cards .

Have other tips to avoid overspending during the holidays? We’d love to hear them. Share them with us in the comments.

Dan Rutherford is a Senior Content Specialist in the Office of Financial Education.

Join the conversation. Follow CFPB on X (formerly Twitter) and Facebook .