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How to Navigate Holiday Shopping Without More Debt
by
JG Wentworth
•
November 19, 2024
•
8 min
The holiday season brings joy, festivities, and unfortunately for many, financial stress. With the average American spending nearly $1,000 during the holidays, it’s easy to fall into the debt trap. But celebrating doesn’t have to mean compromising your financial health. Here’s some tips on how to navigate your holiday shopping without digging a deeper debt hole…
1. Create a realistic budget
The key to debt-free holidays starts with a solid financial plan. Before you even think about shopping, take time to create a realistic budget that encompasses all holiday expenses. Many people make the mistake of only budgeting for gifts, forgetting about the numerous other costs that crop up during the season:
- Gifts
- Holiday meals and entertaining
- Decorations
- Travel costs (airfare, hotels, etc.)
- Holiday cards and postage
- Gift wrapping supplies
- Holiday outfits
2. Determine your available cash
Take a careful look at your current financial situation. How much can you realistically afford to spend? This total becomes your absolute spending limit – not a penny more.
- Review your current savings.
- Calculate disposable income from upcoming paychecks.
- Identify any holiday bonus or extra income.
- Set this as your absolute spending limit.
3. Strategic planning
Timing is everything when it comes to holiday shopping. The most successful debt-free shoppers start their planning months in advance. Create a comprehensive list of everyone you need to buy for, but don’t stop there. Next to each name, write down not just gift ideas but also a specific dollar amount you’re willing to spend. This step alone can prevent countless impulse purchases and budget overruns.
Consider implementing a gift-giving strategy for different groups in your life. For example, you might decide to do a Secret Santa exchange with extended family members or agree on a spending limit for adult gifts. These approaches can significantly reduce your overall spending while maintaining the joy of giving.
Make your “Nice List”
- List every person you need to buy for.
- Assign specific dollar amounts to each person.
- Include a small buffer for unexpected gifts.
- Consider group gifts for colleagues or extended family.
Start shopping early
- Begin shopping months ahead when possible.
- Take advantage of off-season sales.
- Watch for deals on specific items year-round.
- Use price tracking tools for big-ticket items.
Start a holiday fund (for next year)
- Open a dedicated savings account.
- Set up automatic monthly transfers.
- Save year-round for holiday expenses.
- Aim for 1/12 of your total holiday budget monthly.
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4. Shop smart
Today’s technology offers numerous tools to help you shop smarter. Price comparison apps can ensure you’re getting the best deal, while browser extensions can automatically find and apply coupon codes. Cash-back apps and credit card rewards can help you earn money back on purchases you’re already making.
When shopping online, timing is crucial. Sign up for newsletters from your favorite retailers to get notified of sales but create a separate email account for these subscriptions to keep your primary inbox clutter-free. Many stores offer special subscriber-only discounts, especially during the holiday season.
Research before buying
- Compare prices across multiple retailers.
- Use price comparison apps.
- Read reviews carefully.
- Look for bundle deals.
- Check for upcoming sales.
Maximize savings
- Store sales
- Coupon codes
- Cash-back apps
- Credit card rewards
- Store loyalty programs
Take advantage of major sale events
- Black Friday
- Cyber Monday
- Pre-Christmas clearance
- Post-holiday sales for next year
5. Thinking outside the (gift) box
Some of the most memorable gifts don’t come from a store. Consider creating personalized gifts that showcase your talents and thoughtfulness. Experience-based gifts have also gained popularity in recent years. Instead of adding to someone’s collection of material possessions, consider gifting memorable experiences. Some ideas to consider:
DIY gifts
- Homemade food gifts
- Craft projects
- Photo albums
- Personal care items
- Home-grown plants
Experience gifts
- Movie tickets
- Museum memberships
- Concert tickets
- Cooking classes
- Spa certificates
Service gifts
- Babysitting vouchers
- Home-cooked meals
- House cleaning
- Car washing
- Pet sitting
6. Avoiding the debt trap
The holiday season is filled with spending temptations and clever marketing designed to separate you from your money. Store credit cards often offer attractive one-time discounts, but their high interest rates can lead to long-term financial strain. If you must use credit, stick to one card with a favorable interest rate and have a concrete repayment plan in place.
Emotional spending poses another significant risk during the holidays. The pressure to create perfect celebrations can lead to overspending. Remember that thoughtful, meaningful gifts often have little to do with their price tag. Some of the most treasured holiday memories come from simple, heartfelt gestures rather than expensive presents.
Credit card traps
- Don’t open store credit cards for one-time discounts.
- Avoid using multiple credit cards.
- If using credit, have a repayment plan.
- Calculate the real cost including interest.
Emotional spending
- Don’t shop when stressed or tired.
- Stick to your list.
- Avoid last-minute shopping.
- Remember that thoughtfulness matters more than price.
- Don’t try to match others’ spending.
Looking beyond the price tags
The true spirit of the holidays lies in connection, not consumption. While giving gifts can be a wonderful way to show appreciation and love, it shouldn’t come at the cost of your financial well-being. Focus on creating meaningful experiences and traditions that don’t require significant spending.
Consider starting new traditions that emphasize time together over material gifts. A holiday movie marathon, cookie baking party, or volunteer day can become cherished annual events that cost little or nothing but create lasting memories. Remember: The joy of debt-free holidays lasts long after the decorations have been packed away.
There’s always JG Wentworth…
Do you have $10,000 or more in unsecured debt? If so, there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include:
- One monthly program payment
- We negotiate on your behalf
- Average debt resolution in as little as 48-60 months
- We only get paid when we settle your debt
If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?
SOURCES CITED
Probasco, J., “The Average Cost of American Holiday Spending.” Investopedia. October 21, 2024.
About the author
This information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.
* Program length varies depending on individual situation. Programs are between 24 and 60 months in length. Clients who are able to stay with the program and get all their debt settled realize approximate savings of 43% before our 25% program fee. This is a Debt resolution program provided by JGW Debt Settlement, LLC (“JGW” of “Us”)). JGW offers this program in the following states: AL, AK, AZ, AR, CA, CO, FL, ID, IN, IA, KY, LA, MD, MA, MI, MS, MO, NE, NM, NV, NY, NC, OK, PA, PR, SD, TN, TX, UT, VA, DC, and WI. If a consumer residing in any other state contacts Us we may connect them with a law firm that provides debt resolution services in their state. JGW is licensed/registered to provide debt resolution services in states where licensing/registration is required.
Debt resolution program results will vary by individual situation. As such, debt resolution services are not appropriate for everyone. Not all debts are eligible for enrollment. Not all individuals who enroll complete our program for various reasons, including their ability to save sufficient funds. Savings resulting from successful negotiations may result in tax consequences, please consult with a tax professional regarding these consequences. The use of the debt settlement services and the failure to make payments to creditors: (1) Will likely adversely affect your creditworthiness (credit rating/credit score) and make it harder to obtain credit; (2) May result in your being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money you owe due to the accrual of fees and interest by creditors or debt collectors. Failure to pay your monthly bills in a timely manner will result in increased balances and will harm your credit rating. Not all creditors will agree to reduce principal balance, and they may pursue collection, including lawsuits. JGW’s fees are calculated based on a percentage of the debt enrolled in the program. Read and understand the program agreement prior to enrollment.
JG Wentworth does not pay or assume any debts or provide legal, financial, tax advice, or credit repair services. You should consult with independent professionals for such advice or services. Please consult with a bankruptcy attorney for information on bankruptcy.
