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Factoring holiday expenses into your budget all year long is effective for avoiding debt, but it's not always feasible with a limited budget or unforeseen expenses.

When that's the case, lacking a strategy for holiday spending can leave you vulnerable to debt and overspending that delays financial goals. But it's not too late to come up with a last-minute plan to save money for the holidays.

The small end-of-the-year window can offer some time to make money moves that help prevent a holiday debt hangover.

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Making a holiday-specific budget

When determining how much to spend over the holidays, begin with your budget, suggested Jason Speciner, a US-based certified financial planner.

“Start with how much money you're willing to spend - and able to spend - on gift giving and then work your list into that,” Speciner added. “Don't put the cart before the horse and end up overspending because you've, you know, put dozens of people on your gift list.”

If your debt or budget leaves no room for holiday expenses, plan to spend time with people through free holiday activities. Adding to the debt pile during the holidays gets expensive and takes longer to pay off.


Strategise how you'll pay off any debt and prioritize high-interest debt first. With good credit (a score of 690 or higher), a balance transfer credit card lets you move debt from a high-interest credit card to one with a lower interest rate, possibly a 0 per cent intro APR.

There's typically a fee of 3 per cent to 5 per cent assessed for each amount transferred. Without interest, your monthly payments are applied directly to your balance, reducing the time it takes to pay off debt.

With less-than-ideal credit, a debt management plan through an accredited credit counselling agency may offer relief if you're struggling to make progress.

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Taking advantage of the bonus-friendly season

If you're debt-free and planning to get a new credit card, look for one with a sign-up bonus that can offer additional cash or rewards to defray holiday expenses.

Sign-up bonuses usually offer a three-month window to meet spending requirements, and they can be easier to reach if you're charging everyday and holiday expenses. A card with a 0 per cent APR on purchases can also save money on interest for some time.

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Earn rewards with cash-back apps

A cash-back app can earn additional value on everyday purchases. It may require uploading receipts, but it's worth the effort.

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These apps let you add offers in-store or online from certain retailers and earn cash back on eligible items purchased. Or you can upload a receipt to redeem certain offers.

You may also earn incentives for referring other people. For more value, you can also use a rewards credit card to make purchases and stack earnings.

Focus on how you can earn gift cards, referrals, save enough at the store and use your store rewards to buy things you need for the holidays.

Depending on how much you spend, it's possible to make enough money in a week or two with everyday purchases, and that's typically enough to cash out. The earnings add up over time.

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'No-spend challenge' still proves to be a popular choice

This is proving to be a fool proof way to save is to refrain from making unnecessary purchases over a certain period of time.

You can try a no-spend month, no-spend weeks or no-spend weekends, depending on your preference. The money saved can offset potential costs during the holidays.

For Courtney Clarke, a US-based content creator, a “no-spend November” helped her stay on track with her debt goals in 2020. For a month, she spent only on essentials, avoiding eating out and activities that cost money.

“I definitely can't say that I was perfect in the matter, but it's just a nice reset to retrain your brain,” said Clarke. “It's just making sure that you're attempting to get the best out of it.”

She admits spending on eating out when there wasn't enough time to prepare a meal, but even after straying occasionally she still saved over $300 (Dh1,101) that month.