How to Enjoy the Holidays Without Debt
- Avoid holiday debt by making a holiday budget and starting to save early.
- Keep gift costs down by focusing on quality or giving your time.
- Look for free and low-cost holiday activities to make holiday memories.
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Between excited kids making mile-long lists and the constant ads telling you to buy buy buy, temptation is around every corner during the holiday season. But it's absolutely possible to not only get through the holidays, but to thoroughly enjoy them, all without going into holiday debt.
Not sure how to take charge of your holiday spending? Here are some tips for how to enjoy the holidays without ending up in need of debt relief.
Create a Holiday Budget
The very first step to keep yourself on track for the holidays is to build a solid budget. Many people spend a lot during the holidays, so you can't just wing it come December. Get your budget in place so you can set your goals.
You can create a holiday budget in a few easy steps:
Make a list of everyone you want to buy gifts for this year.
Add lines for all of the extra expenses, like food, decor, and travel.
Decide how much you want to spend for each person and item on your list.
Add up your totals, then tack on 10% as a buffer.
If you come up with a budget that you know isn't realistic, go over your list to see where you can cut back. Being more conservative with gifts or turning a big meal into a holiday potluck may help you make a more manageable budget.
Start Saving for the Holidays Early
The average person spends around $900 on holiday spending, according to the National Retail Federation. If your budget is anywhere close to that average number, you're going to need to plan ahead for how you're going to pay for everything.
A good way to set up your holiday savings is by putting it in its own high-yield savings account. Move money over every month and leave it there to grow until it's time to start holiday shopping.
If you start saving for the holidays in January, you could reach a $900 goal by December if you save just $82 a month. Starting in June, you'll need $150 a month to get to $900 by December.
How to save for the holidays month by month
| When You Start Saving | How Much You Need to Save Every Month Until December to Reach $900 |
|---|---|
| January | $82 |
| February | $90 |
| March | $100 |
| April | $113 |
| May | $129 |
| June | $150 |
| July | $180 |
| August | $225 |
| September | $300 |
| October | $450 |
| November | $900 |
Focus on Gift Quality, not Quantity
Sure, there's a certain gluttonous appeal to a huge pile of presents. But no one actually needs piles of gifts to enjoy the holidays and make wonderful holiday memories.
Most people will genuinely enjoy a single thoughtful gift much more than a stack of gifts with less intention behind them. Focusing on a single, well-thought-out gift is a better use of your time and budget, and will likely be more appreciated by the recipient, as well.
Your one gift doesn't need to be expensive, either. The very best gifts are those that show you put time, effort, and, most importantly, love into the selection, regardless of the purchase price. With that in mind…
Give the Gift of Your Time and Attention
Sometimes the very best gift you can give someone is simply your time and attention. This can take a lot of forms, such as:
Gift a night of free babysitting to friends or family with children.
Depending on your career, you could offer your professional services for free.
Offer a free car wash or house cleaning.
Be a handyman for the day to make minor repairs around their house.
Gift a homemade meal on an evening of their choosing.
Simply offer an afternoon of your time for whatever they'd like.
Go the extra mile by creating a personalized coupon with a handwritten note in their holiday card. (You can find templates for these all over the internet if you're not the creative sort.)
Find Free or Low-Cost Holiday Activities
Many of the best holiday adventures won't cost you a thing. You can find a ton of free or low-cost ways to share holiday cheer with your friends and family:
Caroling. It seems a bit old-fashioned to go singing door-to-door, but you can still gather together with your neighbors for a holiday sing-along.
Volunteering. Not only does volunteering not cost you anything, but you can make a genuine difference in the lives of others with your time and effort. It's also a great lesson to teach your children about giving and compassion.
Local events. Check out your town or city's event calendar to see what kind of holiday activities they're offering. Most areas will have at least a few free or low-cost events for families like tree lightings and Santa meetings.
Host a holiday movie night. Most streaming services offer some familiar holiday favorites, or get a library card to take advantage of free digital content.
Go on a holiday scavenger hunt. Make a list of classic holiday icons you can spot around town, then take a fun walk through the neighborhood to see who can cross off their list first.
Throw a holiday swap party. The holidays are all about spending time with loved ones, so bring everyone together to swap handmade gifts or home-baked treats.
Nothing makes the holiday more special than the memories you'll share for years to come.
Remember the True Meaning of the Holidays
Stressing over debt is a poor way to spend the holidays. So don't! You don't need to go into holiday debt to enjoy the spirit of the holiday season.
Despite what retailers—and their ads—want you to think, the point of the winter holidays isn't buying stuff. It's spending time with the people you love.
In other words, making holiday memories isn't about the gifts under the tree. It's about the people around it. As long as you make time for the people you care about, the rest will fall into place without needing to spend a dime.
People just like you are seeking debt relief in Missouri and across the country. The first step is the most important one—explore your options.
Insights into debt relief demographics
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during January 2026. The data provides insights about key characteristics of debt relief seekers.
Credit card tradelines and debt relief
Ever wondered how many credit card accounts people have before seeking debt relief?
In January 2026, people seeking debt relief had some interesting trends in their credit card tradelines:
The average number of open tradelines was 14.
The average number of total tradelines was 25.
The average number of credit card tradelines was 7.
The average balance of credit card tradelines was $15,142.
Having many credit card accounts can complicate financial management. Especially when balances are high. If you’re feeling overwhelmed by the number of credit cards and the debt on them, know that you’re not alone. Seeking help to get out of debt can simplify your finances and put you on the path to recovery.
Collection accounts balances – average debt by selected states
Collection debt is one example of consumers struggling to pay their bills. In January 2026, 30% of debt relief seekers had a collection balance. The average amount of open collection account debt was $3,203. Here is a quick look at the top five states by average collection debt balance:
Collection accounts - top 5 states
| State | % with collection balance | Avg. collection balance |
|---|---|---|
| District of Columbia | 23 | $4,899 |
| Montana | 24 | $4,481 |
| Kansas | 32 | $4,468 |
| Nevada | 32 | $4,328 |
| Idaho | 27 | $4,305 |
The statistics are based on all debt relief seekers with a collection account balance over $0.
If you’re facing similar challenges, remember you’re not alone. Seeking help is a good first step to managing your debt.
Tackle Financial Challenges
Don’t let debt overwhelm you. Learn more about debt relief options. They can help you tackle your financial challenges. This is true whether you have high credit card balances or many tradelines. Start your path to recovery with the first step.
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Author Information
Written by
Brittney Myers
Brittney is a personal finance expert and credit card collector who believes financial education is the key to success. Her advice on how to make smarter financial decisions has been featured by major publications and read by millions.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
Frequently Asked Questions
Are holiday loans a good idea?
A holiday loan is usually not a good idea. Most loan terms run longer than a year, so you could end up making payments on last year's holiday loan while trying to cover this year's costs too.
How do you pay off holiday debt?
A few strategies help you pay off holiday debt:
Use a repayment plan such as debt snowball (paying the lowest balance first) or debt avalanche (paying the highest interest rate first).
Consolidate your balances with a loan, or move them to a credit card that offers a 0% APR balance transfer.
Cut a few costs and apply the savings to your balance.
Pick up extra income until the debt is paid off.
How much should I spend on the holidays?
One guideline is to set aside around 1% of your before-tax annual income for holiday spending. If you and your partner earn $125,000 per year together, that would be a $1,250 budget. The right amount for your family depends on your budget and priorities, and the most important thing is to choose an amount you're comfortable setting aside without adding to your debt. From there, build a spending plan for your full list of holiday expenses and start saving for Christmas or other holidays.
