The Millennial’s Guide To Balancing Debt And Holiday Expenses
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The Millennial’s Guide To Balancing Debt And Holiday Expenses

  • How to balance being a Scrooge and a Santa this holiday season.
  • Avoid creating additional debt when you’re booking travel arrangements or buying gifts.
  • Plan ahead with holiday spending and you’ll be prepared to enjoy your time off.

Balancing debt repayment with the financial obligations of the holiday season can induce panic long before the department stores start pulling out tinsel and twinkly lights. How are you supposed to account for the sudden pressure to increase your spending habits in the name of showing your loved ones how much they mean to you with presents?

Not to mention, actually getting from where you live to said loved ones is extra pricey during the holidays. November and December can easily ruin even the most meticulous debt slayer’s strategy. But, there are luckily a few shields you can use to defend your finances.

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Your journey towards balancing debt and holiday expenses starts with a budget. One of the easiest strategies is to write a list totaling up your expected expenses, including:

Cost of travel + Price tags for gifts + Party expenses

Think of party expenses as any parties you’re going to host this season, or that bottle of wine you’ll bring for your friend’s annual Christmas party. For gifts, set a maximum budget for each recipient, which will help you figure out the total amount you can spend during the holiday season. Setting a fixed amount for gifts can help trim unnecessary spending, too. For example, do all of your cubical mates at work really need gifts, or could you pick just your best buddy at the office?

Planning Trips Without Creating More Debt

It’s highly likely you’ll need to travel during the holiday season. The first step is not to wait until the last minute to book your travel, or even wait until November. Prices start to hike for holiday transportation pretty early on. Unless you have some great travel hacking skills, you don’t want to be caught off-guard.

Travel hacking, however, can be a great way to help you get around during the holidays.

If your debt is from student loans and not from a shopping addiction, then using a credit card bonus offer could help you subsidize your trip to visit family. Just be sure you only take an offer that fits within your budget – say spending $3,000 in three months.

For those folks who feel wary of churning a credit card, consider asking for travel funds instead of holiday presents.

You can ask your parents to put all (or some) of the money they would normally spent on gifts towards your flight home, much like a family Kickstarter for your plane ticket.

Gifts On A Budget, But Not Cheap Gifts

When it comes to holiday gifting, it’s best to be honest with friends and family early on in the holiday season. It can be hard to buck tradition or admit you’re a little light on funds, but pleasing everyone isn’t worth going further into debt.


Instead of giving individual gifts to each friend, suggest doing a group Secret Santa or White Elephant gift exchange. Set a $10 maximum and consider doing fun rules like a competition to find the silliest present. It’s a way to have a lot of laughs without the pressure of finding the perfect gift for several people.

If you aren’t keen on doing a gift exchange, be selective about who will be receiving gifts and talk to those friends. Set a money-limit so your buddy doesn’t get you tickets to see a Beyoncé concert while you hand her a $10 Starbucks gift card.


Never under estimate the gift of your time. Sure, it’s fun to see lots of colorfully wrapped presents underneath the Christmas tree, but Mom and Dad would probably love some one-on-one time just as much. Spend time doing something with them that they love, like hitting golf balls, fixing something around the house, or taking time to do some volunteer work. Or, you can help them solve a problem. Maybe your parents get incredibly frustrated trying to figure out how to download music on an iPad or want to learn how to set up a Roku and stream Netflix. Perhaps you’re crafty and could help them spruce up the house. Use your resources and time to create a personalized gift instead of just running to the mall to ensure something is wrapped and under the tree.

If you have similarly-aged siblings, they’re probably right there with you paying down debt of their own. Talk to each other about budget restrictions or consider taking the Secret Santa route.

Gifting to Grandma and Grandpa can be a joint effort with your siblings. But much like your parents, they’d probably also appreciate the gift of your time to create a memory instead of having another trinket for the mantel.


Gifting to co-workers is a tricky landscape to traverse, and opting out of an office gift exchange could put you on some people’s naughty list. On top of giving to your workers, it might also earn you good cheer to give a little present to your manager or boss.

Before you opt out of spending $40 on gifts at work, consider whether or not the potential ill will is worth the savings. You can always find ways to gift for cheap by doing some savvy shopping. And after all, a $20 limit on Secret Santa gifts doesn’t mean you have to spend $20.

But What’s The Easiest Strategy?

Start early. Begin saving for the influx in spending months before it starts. Tuck $10 or $20 out of each paycheck into savings earmarked for the holidays. Use apps like Digit or Tip Yourself to help build a slow-and-steady buffer so you have money ready. Much like the cliché “the best offense is a good defense.” Starting your savings strategy early on is like playing defense, so you can enjoy your holidays without wincing, complaining and stressing.

Avoid Being Scrooge, But Don’t Be Santa

Ultimately, the skill of balancing debt and the holidays is to avoid coming off as Ebenezer Scrooge, while also managing not to go to the other extreme of being Father Christmas. You don’t have elves to help you make presents and a magical sleigh isn’t going to take you every place you need to visit. Set your boundaries and stick to them.

Some people may not understand why you can’t splurge – but focus on the warm-and-fuzzy feeling of making another payment towards being debt free before you go on a holiday shopping frenzy. Need a hand tracking where your money is flowing around the holidays? Try Personal Capital’s free app to get started.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Erin is the founder of, where she uses sarcasm and humor to explain basic financial concepts to her fellow millennials. Erin lives and works in New York City.
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This year, my top financial priority is:

Building my emergency fund
Paying off high-interest debt
Budgeting better
Saving for a short-term goal, like a vacation or new car
Increasing my investment contributions
Maintaining status quo - I’ve got this under control

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