Handling the Holidays with Debt

The holiday season can be fun and peaceful. Time with family and friends, favorite foods, and special traditions all make it a memorable time of year. While giving gifts is an integral part of the celebration, this can create stress when you’re on a tight budget, have debt, or have just filed bankruptcy. You may feel pressured to throw caution to the wind and spend beyond your means, but there are some things you can do to join the festivities without breaking the bank.


Before spending anything beyond your basic needs and budgeted expenses, you’ll need to have a plan. Of course, it’s always best to plan ahead so that your purchases have less of a financial impact. If you’re not currently in the holiday season, set a budget ahead of time for what you’d like to spend, and then spread out the amount you’ll need to save over 12 months. This way, you’ll either end up with a pot of money to spend in December, or you can keep an eye on sales throughout the year and buy things when you see just the right gift for someone on your list.

If you haven’t planned ahead and find yourself in the thick of holiday shopping, it’s still important to make a budget before you make your gift list. Look at your current spending and see where you can cut your expenses and reallocate your spending for gifts. Perhaps you can sacrifice for a month or two to ensure you have some money set aside for holiday purchases.


In addition to saving, there are other things you can do to make the holidays more affordable. You may decide to make all or some of your gifts. This allows you to put your personalized touch on the items you give, which can be much more memorable than a simple purchase. Scrapbooks of old photos can be real keepsake treasures, as can a hand-crafted item such as a knit scarf or ornament. If you’re not the crafty type, think of your other talents you can share. Home baked goodies are a treat everyone appreciates. You may also want to offer priceless services such as babysitting, yard work, meal prep, or something else your loved one needs. You may also consider giving a themed gift of simple items based on their interests or likes.

Chances are, you aren’t the only one who would like to stick to a budget this time of year. Talk to your family to see if they would be interested in drawing names to exchange one gift of a set amount. Or perhaps they’d like to only give gifts to the children, while the adults enjoy watching their excitement. You can turn a simple gift exchange into a game to add to the fun and memories.

For your actual celebration, consider a potluck meal, rather than hosting and providing all of the food. Or you may decide to have an appetizer and dessert party, versus a full, sit-down dinner. The important part is spending time with the people you love.

Time with Loved Ones

Finally, there’s no shame in sticking to a budget and being responsible with holiday spending. Let people know you’re working hard to take care of your debt and rebuild your credit, and so you really need to watch your spending. The people who love you will understand, and you can all work together to make this a festive and fun time of year.