How to Avoid the “Holiday Debt Hangover”

In this Holiday Financial Learning lesson, we’ll cover…

• How to plan for holiday costs, both expected and unexpected.
• Why it pays to pay with cash or a debit card.
• Simple tips for cutting down on everyday expenses.

There’s magic in the air during the holidays and money to be spent. Between gifts, family get-togethers, office parties, and seasonal activities, you may find yourself bracing for a holiday hangover—but not the kind caused by too much eggnog. 

We’re talking about a holiday debt hangover grounded in overspending. Still, holiday spending doesn’t have to put you in the red. Check out our tips to prevent a debt hangover this holiday season. 

Planning is key

Creating a plan before the holiday season is the best way to allocate your cash responsibly. Determine for whom you must purchase gifts, which holiday activities you typically do with your family, and the charities and causes you usually donate to.

Be honest with yourself. Knowing what you have to buy versus what you wish you could buy is key to reigning in the spending this season. 

Tip: Want to have $1,040 for the next holiday season? Set aside $20 every week, automatically weekly, with Payactiv SmartSave. Give yourself the gift of an automatic saving goal by downloading the Payactiv app1 and applying for the Payactiv Visa Card*. Sign up for full or partial paycheck direct deposit so your goal will always be funded. Pause, stop, or withdraw a goal anytime.

In addition to your planned spending categories this season, allot some money for surprise spending. You never know what unexpected purchases you’ll have to make as the season progresses, so it’s always a good idea to set aside an extra money stash for the unknown.  

Tips for Holiday Savings 

Once you’ve created a solid savings plan, try implementing these tips to stick to it.  

Pay in Cash (Sort Of)  

Paying for items in cash is the easiest way to ensure you’re not overspending on purchases. However, because cash isn’t the most practical currency, use a debit card or your Payctiv Card instead. Get exclusive discounts and real-time spending insights to maximize your cash while you spend using the Payactiv app.

Cut Back on Other Spending 

Since you’ll be spending more money than usual on holiday-related expenses, try lowering your spending elsewhere. Opt for home-cooked meals, stick to grocery lists, and clip coupons whenever possible.

You’d be surprised how much these seemingly small activities add up, and you’ll thank yourself later for having more cash on hand for your holiday spending needs. 

Value Experiences Over Spending 

Replacing gift-giving with experiences is a great way to save money and create meaningful moments with family and friends. With a bit of creativity, you can find tons of options for holiday fun and give back at little to no cost. 

For example, invite everyone over for a holiday movie night instead of exchanging gifts with your friend group. Perhaps try cleaning out your closet, donating the clothes you aren’t wearing, or spending an afternoon volunteering at your local soup kitchen. Quality time with loved ones doesn’t have to cost a dime.

Remember the Reason for the Season 

While the hyper-commercialization of the holidays may make you inclined to overspend, remember that the most meaningful parts of the season are quality moments with family and friends. 

You’ll have a much easier time sticking to your savings plan and curbing excess spending if you remember the amount of cheer you have isn’t dependent on the amount of money you spend but instead with whom you spend the holidays. 

The Final Word 

Don’t let the thought of endless spending during the holidays ruin the magic. Download the Payactiv app to check out the free SmartSpend feature, and avoid a holiday debt hangover this season.

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* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.

All content provided on Payactiv.com/blog/ is for informational purposes only. Payactiv makes no representations of the accuracy or completeness of any information on this site or found by following any link from this site. Payactiv will not be liable for any errors or omissions in this information nor for the availability of this information. Payactiv will not be liable for any losses, injuries, or damages from the display or use of this information.