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.
| 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.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during July 2025. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit card balances by age group for those seeking debt relief
How do credit card balances vary across different age groups? In July 2025, people seeking debt relief showed the following trends in their open credit card tradelines and average credit card balances:
Ages 18-25: Average balance of $9,117 with a monthly payment of $283
Ages 26-35: Average balance of $12,438 with a monthly payment of $366
Ages 36-50: Average balance of $15,436 with a monthly payment of $431
Ages 51-65: Average balance of $16,159 with a monthly payment of $523
Ages 65+: Average balance of $16,546 with a monthly payment of $499
These figures show that credit card debt can affect anyone, regardless of age. Managing credit card debt can be challenging, whether you're just starting out or nearing retirement.
Home-secured debt – average debt by selected states
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In July 2025, 25% of the debt relief seekers had a mortgage. The average mortgage debt was $236504, and the average monthly payment was $1882.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment | |
|---|---|---|---|---|
| California | 20 | $391,113 | $2,710 | |
| District of Columbia | 17 | $339,911 | $2,330 | |
| Utah | 31 | $316,936 | $2,094 | |
| Nevada | 25 | $306,258 | $2,082 | |
| Massachusetts | 28 | $297,524 | $2,290 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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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.
Are holiday loans a good idea?
Usually, no, borrowing for the holidays is not a good idea. One reason is that most loan terms are longer than one year. So you’ll already be looking to spend money on the holidays again before last year’s holiday loan is paid off.
How do you get out of holiday debt?
There are different ways to get out of holiday debt, including:
Use a repayment plan like debt snowball (from lowest to highest balance) or debt avalanche (from highest to lowest interest cost).
Consolidate debt with a loan or use a credit card that offers balance transfers at 0% APR.
Cut costs and put the money toward your debt.
Get a second income until you pay off debt.
How much should I spend on Christmas?
Your Christmas budget depends on your available money and what's important to your family. You can set aside a small percentage of your income for Christmas spending. You could consider allocating around 1% of your annual before-tax income. It’s more important to select an amount you can comfortably spare without getting into debt. Then, make a spending plan for your holiday expenses and start saving for Christmas.
