Money Saving Tips to Avoid a Holiday Hangover

Holiday Spending, By-the-Numbers

Here’s something to mull over as you mull your wine, roam the Christmas tree lot, or strategize seating arrangements for your Hanukkah gathering: in November and December of last year, Americans spent $886.7 billion on holiday purchases.

“Worries about inflation and Covid-19 put pressure on consumer attitudes but did not dampen spending, and sales were remarkably strong” according to National Retail Federation Chief Economist Jack Kleinhenz. The retail world experienced a record-breaking season in 2021, growing 14.1 percent even amidst a mixed landscape.

Evidently, we all really love the holidays. But let’s break away from billion-dollar price-tag statistics because most of us don’t operate within that kind of seasonal budget.

In more relatable figures, the average American will spend around $998 on gifts and other holiday-related purchases in 2022. Combine that with essential monthly expenses like rent or mortgage payments, credit card bills, and utilities (hello, December heating bill) and you might find yourself catching a case of the Holiday Blue$$$.

Don’t let these facts and figures overwhelm you. There are practical ways to avoid piling on debt so you can pile on other things. Like cozy sweaters and bread pudding calories.

6 Ways to Minimize Debt this Season

It’s human nature to shell out more money when you’re surrounded by temptation (holiday food! Holiday shows! Aesthetically pleasing department store displays!) But if you’re motivated to spend December not spending all your earnings, here are a few practical tips on how to save money.

1. Set a spending cap for yourself

A little financial forethought goes a long way. Before you hop in the car and venture out to do your holiday shopping, spend some time looking over your accounts and create a budget sheetbudget sheet. Take inventory of your current balances and come up with a spending ceiling that feels proportional. Resisting the urge to buy something—just because it’s a good deal or you came across a coupon—will cut down on costs.

2. Leave the credit cards at home

While it’s very tempting to rely on credit cards during the holidays, high balances too often translate to high interest fees; fees that can cancel out any potential perks like cash back rewards or travel points. If you know that paying down high balances is going to create an additional cost layer, stick with debit cards or cash when it’s feasible.

3. Opt for potluck

Holiday spending isn’t limited to presents alone. Between Thanksgiving, Christmas, Hannukah and Kwanzaa, November and December are two big months for grocery shopping. If it’s your turn to host this year, divide and conquer the holiday menu. Invite guests to bring one or two of their favorite dishes so you’re not footing the food bill alone. (You might even cut down on dishes, too.)

4. Draw names from a hat

51% of American consumers intend to buy fewer gifts this holiday season than they did last year. Want to follow suit? Consider drawing family names (at least the adult names) from a hat. This allows everyone to give and receive a gift without overextending their personal budget. And the benefits here are twofold: less time spent doing the last-minute zombie-shop through crowded retailers means more time to spend with family.

5. Choose sincere gifts over spendy ones

This goes hand-in-hand with a name drawing because buying less allows you to focus more on the quality of your gift (and who is receiving it.) Curate an assorted “movie night” snack basket for the film lover in your life, layer dry ingredients in a mason jar for the baking enthusiast, frame a favorite family photo or offer a night of free babysitting for someone who has been burning the parent candle at both ends.

6. Skip the soirees and volunteer

Online behemoths and cyber special-peddling retailers count on you forgetting that the holidays aren’t all about stuff. In lieu of shelling out for holiday parties or gift swaps, coordinate a family visit to a shelter, soup kitchen, or community center to offer support for those less fortunate. Organizations like VolunteerMatch will pair you with organizations in your neighborhood that could truly benefit.

How to Manage Holiday Debt

Even the best-laid budgetary plan can fall short when pitted against glittering holiday consumerism. We want to make the people in our lives feel special while also being mindful of our spending as we approach a new year—and it’s not an easy balance to juggle.

Don’t be hard on yourself when next year rolls around and you have to pay off credit card debt or explore options to stabilize your financial picture. Here are some of the questions you might be asking yourself once the dust settles on December:How can I get on top of late payments?

• What impact will holiday spending have on my credit score?
• How can I pay more than the minimum on credit cards when my interest is so high?
• What are a few ways to save money in the coming year?
• What steps do I need to take to set up healthier financial habits in 2023?

Simply acknowledging that you want to improve your financial picture requires a courage leap, but the good news is that you have resources at your immediate disposal to bridge the gap between positive intentions and positive outcomes.

And that is where we like to join the conversation. GreenPath Financial Wellness is a trusted, national nonprofit that has helped more than 65,000 households pay off more than $200 million in debt. In 2021 alone, we provided a total of 86,532 financial services. If you’re feeling overwhelmed with your current picture, consider debt counseling or a debt management plan to get yourself back on track.

What is Debt Counseling?

Debt counseling begins with a chat. One of our trained GreenPath counselors will ask you several questions that explore areas like income, expenses, debt payment history, and what your day-to-day looks like (because every family is different and has different financial priorities.)

During your assessment, your counselor will identify how you can trim down your daily expenses as well as discuss the best way to save money once they have an overall picture of your finances. This chat is free, completely confidential, and typically lasts an hour, depending on your specific needs and circumstances.

11,467 people paid their debts in full with the assistance of a Debt Management Plan in 2021. Don’t wait to speak with a counselor.

What is a Debt Management Plan?

In simple terms, a debt management plan will consolidate credit card debt into a single payment. Each payday, you automatically deposit money into your GreenPath account, and we use that money to pay on your behalf. We may be able to arrange lower interest rates and monthly payments with your creditors, enabling you to pay off debt faster, save more, and improve your credit score.

If you like numbers that tell a story (like we do!), it’s worth mentioning that 91% of people we counsel feel better and more empowered to handle their finances. 89% of people who have completed our debt management plan have report improved spending habits.

More to Explore

Our goal at GreenPath is to make your debt as manageable and stress-free as possible and, at the same time, help you develop sound financial literacy. To this end, check out the following resources:

• Free 3-Minute Financial Health Assessments
• Homebuyer Counseling
• Worksheets and Guides
• The LearningLab: Free Financial Courses

• Homebuyer Counseling
• Worksheets and Guides
• The LearningLab+ Free Financial Courses