Debt Management Tips for a Stress-Free Holiday Season

While you’re mapping out “trips to the pumpkin patch” and “planning that Instagram worthy Thanksgiving table,” don’t forget to give your finances some holiday cheer! A little debt management now can make your season bright.

With these simple reminders, you can keep your financial situation under control and your holiday spirit high — without turning into a Scrooge.

Debt Management: The Basics

Are you still dealing with paying off summer vacation debts or that new car you bought this spring? Before you start worrying about holiday expenses, take a moment to assess your current financial situation. List your income and expenses, including monthly payments and total amounts owed.

If you love organizing, Excel is your best friend; if not, a pen and paper will do! This exercise helps you see what’s coming in, what needs to be paid, and where you might cut back.

With a simple budget, you can identify areas to cut back on. For instance, dining out multiple days a week – cutting that back could add quite a few more gifts this December.

Tackling Debt Repayment

If you uncovered more debt during your budgeting or anticipate taking significant debt this holiday, it’s time to develop a repayment strategy.

Aptly named for this time of year, two easy-to-follow repayment strategies include the Snowball and Avalanche Methods.

Starting with the Snowball Method, you pay off your smallest debts first, building momentum as you cross them off your list. Essentially tackling the “easy jobs” first. This approach can motivate you by eliminating “easier” debt.

Conversely, the Avalanche Method targets debts with the highest interest rates first. By prioritizing these debts and paying more than the minimum monthly payment, you’ll save on interest over time. This method can also reduce the overall time it takes to pay off your debts.

Additionally, consider negotiating with your creditors. If you don’t ask, you’ll never know – it’s worth attempting to negotiate for better terms, such as lower interest rates or obtaining temporary relief or modified payment plans. And remember, managing your debt is essential for maintaining a healthy credit score. For more tips: Read our article about developing and maintaining good credit habits.

Holiday Must Haves for Debt Management

So, you have a plan for those old debts, now what? Preparing for the actual holiday season can be a fun challenge! Here are several strategies to keep your potential holiday debt in check.

• Plan Ahead with a Gift List – Write down everyone you need to buy for and think about their interests. Then, stick to the list to avoid impulse buys or gifts that don’t fit your recipient.
• Shop Early – Avoiding last-minute shopping and the holiday price hikes. Early sales can save you money. If you enjoy the excitement of camping out in line, Black Friday deals and promotions could also keep more money in your wallet.

• Use Coupons and Promo Codes – Just like your favorite nostalgic Christmas flick, clip some coupons! Many stores offer online promo codes right on their websites. You can also check websites like RetailMeNot or Honey for discounts.
• Consider Handmade Gifts – Yes, handmade gifts can be a dazzling surprise for your friends and family. Think about creating personalized items like baked goods (from Grandma’s recipe book), photo albums (of past celebrations), or crafts (like a personalized cutting board). Sites like Etsy or Pinterest could inspire DIY projects that your loved ones will cherish!

This holiday season, don’t let debt steal your joy. With a little planning, creativity, and smart budgeting, you can enjoy the festivities without financial stress. Whether you’re managing existing debt or planning for holiday expenses, keeping debt management on your radar will help you welcome the season with peace of mind—and confidence in your finances.

About the Author

Anjulie Tacey-Causley is a Personal Banker at Waterford Bank, N.A. in Clarkston, Michigan. With extensive experience across various industries, backed by a passion for community service and problem solving, she’s ready to enhance your personal banking experience.

To learn more or to connect with Anjulie, please reach out at 248-625-8585 or connect with us online.