The holidays are a great time for celebration and connection. With some good, advanced planning, I’ve found I can prepare for major purchases, spread the seasonal cheer and avoid a dreaded holiday debt hangover – all at the same time!

Last year, the average consumer spent an estimated $1,000 on holiday-related shopping, according to the National Retail Federation. Without prior planning, an increase in holiday spending could knock some military families way off budget and increase credit card debt or deplete emergency funds that are needed to cover refrigerator or car repairs or other unexpected expenses. Avoiding high credit card balances and fees and protecting my emergency fund for true emergencies helps keep me financially healthy.

Whether my holidays involve traveling, making a major purchase or treating those on my “Nice” list, here are six ways I’ll keep the holiday fun flowing and avoid debt this season:

1. Make ‒ and stick ‒ to a budget. I start several months ahead on holiday planning and write down anticipated expenses, including any travel plans, gifts and decorations. I set an overall spending limit and make a list of gifts I want to buy for family and friends – and I stick to it as this helps me avoid impulse purchases. (I also avoid buying unnecessary gifts or items simply because they are on sale.) There are many ways to give someone a gift without busting the budget. I’ve found the earlier I start saving, the less I feel the pinch. A short-term side hustle can help boost savings. Learn more about setting SMART financial goals.
2. Set expectations for gift amounts. When everyone is on the same page ahead of time, it can minimize disappointments. I talk to immediate and extended family members about setting a dollar limit on gifts. My friends and I agree to give lower-cost personalized gifts like volunteering for each other’s favorite charity or making homemade goodies.
3. Avoid buying gifts on layaway, credit card-fueled shopping splurges, or with online “buy now, pay later” services. These strategies can cost more in the long run. Buying holiday gifts on layaway or with “buy now, pay later” services only puts me in debt for an extended period and often come with fees. While credit cards can be useful (when paid in full every month), I use them sparingly, just as the Grinch might, to dodge post-holiday financial blues when my January statements arrive. Also, avoid cash advances for holiday gifts as the high interest and fees start accruing immediately.
4. Look for deals and discounts year-round. I keep an eye out for deals and sales throughout the year for the gifts on my list. If I see the right gift for someone, I am patient as it will usually go on sale at some point and I comparison shop for a better price elsewhere. And always ask for military discounts when shopping. Consider shopping for gifts tax-free at your local Exchange. If you’re looking to give the gift of a sporting, theater or other event, look to your local Information, Tickets and Travel office or AmericanForcesTravel.com for recreation deals.
5. Get creative with entertaining. When getting together with friends or family for the holidays, we often host potluck-style gatherings. This gives each guest the opportunity to share their favorite recipe and helps everyone stretch their budget. When food shopping, I plan ahead and research healthy, thrifty holiday meals. Like my gift list, my grocery shopping list keeps my holiday food buying focused.
6. Give the gift of experiences and/or time. We often think gift-buying is the only way to express love or affection. But that’s not the case. Fun experiences – hiking, playing games, doing crafts together, exploring museums – and good times spent with loved ones are what make memories. Much of that stuff we buy might get tossed one day. Our family enjoys giving each other books of personalized coupons that we can redeem from each other. I treasure when my kids give me a book of coupons to redeem to play a game (of my choice) with them, get my car vacuumed, the lawn mowed or even let me have one of their cookies.

Mandi Moynihan is a CERTIFIED FINANCIAL PLANNER™ professional who has been with MilSpouse Money Mission since its inception. She also served in the Army and is the spouse of a retired service member.

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