5 Tips To Afford the 2024 Holidays When You’re Still Paying Off Last Year’s Debt
Written by
Cindy Lamothe
Edited by
Rebekah Evans
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The holiday season can be financially challenging, especially when carrying debt from previous years, but with a budget and strategic planning, experts say it’s possible to create meaningful celebrations without exacerbating financial strain.
Here are some strategic holiday financial management for debt-conscious consumers.
Proactive Budgeting and Expectation Setting
The most critical first step, according to Kevin Shahnazari, founder and CEO of FinlyWealth, is creating a precise, zero-based holiday budget that accounts for every potential expense.
“Start with a transparent conversation with family and friends about financial limitations. Establishing clear expectations prevents unnecessary spending and emotional stress,” he said. “Many individuals feel pressured to maintain previous years’ gift-giving standards, which can lead to additional debt.”
Instead, he advised implementing creative alternatives like group gift exchanges, setting strict spending limits or focusing on meaningful experiences rather than expensive presents.
“A $20 thoughtful gift or a shared experience can often create more lasting memories than an expensive item purchased under financial duress,” Shahnazari added.
Income Acceleration and Dedicated Holiday Fund
For individuals still paying off previous holiday debt, Shahnazari recommended exploring temporary income acceleration strategies.
This might include:
- Picking up seasonal part-time work
- Selling unused items through online marketplaces
- Offering freelance services in your professional skill set
“Create a dedicated ‘holiday fund’ separate from your primary accounts,” he said.
By classifying these funds, he explained you create a psychological and financial barrier against overspending.
“Even setting aside $10 to $20 weekly can generate a meaningful holiday budget without additional debt,” Shahnazari added.
Strategic Debt Management and Credit Utilization
If you’re carrying existing holiday debt, Shahnazari said to prioritize high-interest credit card balances before introducing new expenses.
“Consider balance transfer options or negotiating with current credit card companies for lower interest rates,” he said. “Some credit providers offer temporary hardship programs that can provide short-term relief.”
Also avoid opening new credit lines specifically for holiday spending.
“Each new credit inquiry can temporarily lower your credit score and create additional financial complexity, Shahnazari explained. “Instead, focus on using existing resources more strategically.”
Alternative Gift-Giving Approaches
Shahnazari suggested reimagining gift-giving through a lens of creativity and personal connection.
Potential strategies include:
- Handmade gifts that showcase personal skills
- Digital gifts like online courses or subscriptions
- Offering service-based gifts like home cooking or babysitting
- Creating photo albums or memory books
- Providing experiences instead of physical items
“These approaches often cost significantly less while providing more meaningful connections than traditional purchased gifts,” he said.
Psychologically Reframe Holiday Spending
“One of the most powerful strategies is reframing holiday spending as an opportunity for financial discipline rather than a source of stress,” Shahnazari said.
He recommended approaching the season with a mindset of intentional spending and meaningful connection.
“I consistently advise clients that the emotional value of the holiday season is not determined by monetary expenditure,” he said. “Genuine connections, shared experiences and thoughtful gestures often create more lasting memories than expensive gifts purchased under financial strain.”
Practical Implementation Strategy
“Begin immediately by creating a comprehensive holiday budget,” Shahnazari explained.
For this, you should list every potential expense, from gifts to travel to additional food costs. Then, ruthlessly prioritize and eliminate non-essential spending.
He said to consider each potential expense through the lens of both financial responsibility and emotional significance.
“My core recommendation is to view this holiday season as an opportunity for financial reset and meaningful connection, not as a competitive spending exercise,” he added. “The most expensive gift you can give this holiday season is the gift of financial peace — creating memories without creating debt.”
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