How to end your dependence on credit cards and spend wisely for the holidays

‘Tis the season to spend, and forecasts indicate that many consumers won’t be holding back on their holiday shopping this year. Retail sales are anticipated to grow substantially and eclipse last year’s record-breaking holiday season.

During November and December of 2020, nearing the end of the first year of the COVID-19 pandemic, retail sales grew 8.3 percent over the same period in 2019. The result was a record $789.4 billion in holiday spending. Almost half of those surveyed in a poll said they will spend about the same amount as last year.

What these numbers say is that we love to give and make others happy, and for many, a once-in-a-lifetime pandemic hasn’t and won’t curtail this holiday tradition. But the trick is to shop without adding debt, and that’s where many consumers complicate their financial situation.

According to the poll, about 40 percent of U.S. adults are willing to go into debt, or deeper into debt, to purchase gifts. The fact is some people overspend this time of the year, and it impacts them well into the new year. The problem can increase when you consider rising inflation; having less to spend on other things could lead to increasing credit card balances for the holidays and down the road.


Tips to avoid getting into debt – or more debt – during the holidays

  • Set and stick with spending limits. Rather than be consumed by the moment and think of the short-term satisfaction of buying everybody all that you possibly can, think about the long-term implications of that mindset on your new year finances. Promise yourself this: Limit what you buy for the holidays to what can come out of your bank account. Give your credit cards an extended holiday. Devise a budget and decide how much money – only out of your bank account – that you can afford to spend. Showing that kind of spending discipline during the holidays can build a great habit for the year ahead, improving your financial picture for the long haul.
  • Limit your gift list. People overspend when they deem it necessary to give several gifts to each person on their list. Forget about quantity and focus on meaning. Too many gifts, besides costing you too much money, dilute and distort the meaning of giving, because it becomes about “how many” rather than “how special.” Many material gifts are soon forgotten away.
  • Creatively keep your shopping budget down. Use rewards cards, unused credit card points or gift cards to fund your purchase. Or think of ways to give homemade items, such as a wreath, jewelry, ornaments, decorations, or a candle. Give personalized gifts or reasonably-priced household or work-related items that they could really use. Remember, it’s the thought that counts. You don’t have to always overspend in order to buy the latest and greatest.
  • Give the gifts of time and service. You could consider teaching someone a craft or skill or offering other services that reflect the spirit of the season. Baking holiday treats, taking family photos, hosting a meal or a gathering for family and friends – all of these actions show as much meaning and affection as giving any expensive gift would.
  • Avoid buy-now, pay-later deals. While some of those deals offer 0 percent interest, others do not. Adding multiple monthly bills by purchasing several items this way can cripple your budget.
  • Look for coupons and coupon codes. Search on the web for coupon codes for online stores. Go through the coupons that came to your mailbox. Comparison shop for the items you’re searching for.

Spending on gifts for your family, friends and loved ones adds joy during the holiday season, but remember, overdoing it can make the following months difficult on you financially. Give yourself the long-term gift of financial stability by starting smart spending habits during the holidays and sticking to them.


About George Williams III

     George Williams III ( is the founder and president of Williams Financial Group. He has more than 20 years of experience in the insurance and finance industry. Williams has earned top producer awards with multiple carriers and is an elite advisor for AARP. He has been a part of product planning services for UnitedHealthcare and Blue Cross Blue Shield’s senior products. Williams also sits on the board and actively volunteers for Commissioned to Heal, an inner-city nonprofit organization that provides a food pantry, counseling and other services to its surrounding community.