Holiday Gift Buying: Tips to Avoid Debt

The holiday season is a time for joy and generosity, but it can also be a period of financial strain. The temptation to splurge on extravagant gifts can lead to unexpected debt. Here are some savvy strategies to keep your finances in check while still spreading holiday cheer:

1.    Set a Budget and Stick to It

Start by determining a realistic budget for holiday gift buying. This may sound basic, but it’s the cornerstone of staying financially healthy. Include all expenses, from gifts to wrapping paper and shipping costs. Once you’ve set this budget, the trick is to stick to it.

2.    Prioritize Meaningful Gifts

Luxury isn't always about price. Focus on gifts that hold sentimental value or offer unique experiences rather than expensive items. Personalized presents or a planned family outing can often be more memorable and cherished than high-ticket items.

3.    Plan Ahead and Shop Early

Avoid last-minute shopping, which can lead to impulsive, expensive purchases. Next year, plan ahead and take advantage of sales throughout the year, spreading out the financial impact of your holiday gifts. Be careful not to buy more because you found a good sale on certain items. Apply the regular price toward your budget rather than the sale price.

4.    Use Rewards and Cashback Offers

Leverage credit card rewards programs or cashback offers. Many cards offer points that can be redeemed for gifts or significant discounts. This way, you’re making your money work for you while you shop.

5.    Limit Luxury Gifts

There’s no need for every gift to be high-end. Mix luxury with practical or thoughtful gifts. Balance expensive items with more affordable, yet meaningful, choices to keep your overall spending in check.

6.    Monitor Your Spending

Regularly track your holiday expenditures against your budget. Use your mobile banking or budgeting app or spreadsheets to keep an eye on your spending and adjust as necessary to avoid going overboard. There are even apps (of course!) specifically for planning your gift list, which help you avoid impulse purchases.

7.    Consider Group Gifts

Pooling resources with friends or family for a high-value gift can reduce individual expenses while still delivering an impressive present. This approach works well for big-ticket items and can make a significant impact without breaking the bank.

8.    Reflect on the True Spirit of the Holidays

Lastly, remember the holiday season is about connection, joy and gratitude. Focus on spending time with loved ones and creating meaningful experiences. Often, the most cherished memories aren't tied to the gifts but to the moments shared.

By following these tips, you can enjoy the holiday season without the burden of debt. Planning, prioritizing and thoughtful spending are key to a financially healthy and joyful holiday.

Karen Ramola is Vice President of Retail Banking at New Market Bank. A fourth-generation community banker, Karen oversees New Market Bank’s three branches and is responsible for consumer banking products and services. She is also the Founder and President of Giving Grace Foundation. She resides in Prior Lake with her husband Jason, daughter Grace and Golden Retriever Mikko.