Do These 5 Things to Stay Out of Debt this Holiday Season

The holiday season puts people in the mood to spend, spend, spend, which usually results in debt, debt, debt. And, because you’re spending money on others rather than buying gifts for yourself, you may feel less guilty about it. At least that’s what one survey shows.

According to a new CreditCards.com report, more than half of millennial credit cardholders believe the holidays are an acceptable excuse to pile on debt, and 3 in 5 are willing to go into the red this holiday season.

There’s nothing wrong with wanting to give to others, but you shouldn’t compromise your own financial health to do so. This doesn’t mean you can’t get into the shopping spirit. It just means, you have to do a few things ahead of the holidays to put some extra cash in your pocket and avoid debt this season.

Here are 5 things you can do now to avoid taking on debt over the holidays.

Sell some stuff.

Look around your home for items you can sell online. This can be old toys, clothing you no longer wear or a smartphone you recently replaced with an upgraded device. The holiday season is the perfect time to sell gently-used items you no longer need or use to make some extra spending cash toward gift purchases and other holiday expenses. Plus, it’s a good time to declutter and make room for new gifts. You can sell just about anything on Facebook Marketplace or use the LetGo app. For designer fashion, I recommend trying Poshmark or TheRealReal.

Get a side hustle.

If you’re looking to make extra money during the holidays, you don’t have to give up nights and weekends working at a restaurant or retail store. There are plenty of side hustles that you can do right from home or whenever is convenient for you. For example, you can dog sit at your own home whenever you have the time through sites like Rover.com and make up to a $1,000 extra a month. Otherwise, become a ride share driver through Uber or Lyft and pick up passengers on your way to or from work or while running errands. If you don’t want to deal with strangers, check out Roadie. The app connects you with people who need help with local deliveries and you can pick up/drop off packages to make up to $60 a day. Otherwise, you can post your professional skills on sites like FlexJobs or UpWork to find freelance opportunities.

Put your savings to work.

Saving money is great, but don’t leave your money sitting in a traditional bank account. If you’re not earning at least 1% on your savings, you’re leaving money on the table. Many online banks offer much higher interest rates, helping you to earn more money back on your savings. And, opening an online savings account is a piece of cake. Run a quick comparison online to see where you can find the best rates for a high yield online savings account. Check out Ally, Marcus by Goldman Sachs and Vio Bank. You can find rates as high as 2.27% in some cases. Just make sure to read the fine print as some may require a minimum balance to open and always make sure they are FDIC-insured to protect your money.

Rack up rewards.

If you’ve got a handle on your credit card management, look into opening a new credit card that offers a sign up bonus like 50,000 airline miles or $500 cash back. This is a great time to take advantage of those bonus rewards which you could redeem come December toward gift purchases. And, make sure you are opting in to any bonus reward categories your credit card offers over the holiday season which you need to do by signing into your account online. This may be extra cash back or extra points for travel, restaurants, gas or specific retailers. I also think it’s a good idea to offer to pay for group purchases like a group gift or dinner out with friends and ask that everyone pays you back with cash. This way, you rack up rewards faster without actually having to spend your money.

Start shopping now.

There are plenty of early holiday deals going on in November and it’s a great time to start picking up a gift here and there. This allows you to manage your cash flow better, instead of trying to buy everything at once with your last paycheck of the year. This is also a good time to set gift expectations. If you typically exchange gifts with everyone in your family or your circle of friends, begin chatting now about how you can shift those gift expectations to help with everyone’s personal financial needs. Maybe you agree to only buy gifts for the kids in your family or set up a secret santa with your friends this year instead. You will likely be surprised to know that others will be open to this and appreciate the opportunity to save while still celebrating together.