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  • Writer's pictureRianka

theSkimm | How to Budget for the Holidays, Even if You Have Debt

Updated: Jun 18

Rianka R. Dorsainvil, CFP®



The holidays are more expensive than ever (thanks, inflation!) and social pressure can make us want to buy and do all the things in December, which can deplete your bank account by January. So, how do you make the most of the holidays without your financial goals going off track? We spoke to Rianka Dorsainvil, a Certified Financial Planner®, and co-CEO and senior financial planner at 2050 Wealth Partners, to get her best tips for making the most of your money during the December spending rush. 


How can I create a holiday budget?


Make sure your fixed expenses (think: rent) are covered. You’ll also want to add some buffer with things like utilities and groceries — especially if you’re hosting. You want to really focus on those variable expenses, such as entertainment and dining out. Try to see if you can scale back on some of those, so you can have a little bit more freedom with your holiday budget.


Make a list of people you’re planning to give presents to. Once you have it written down or in a spreadsheet, you can play with numbers. If you have $400 total to spend on gifts, how does it make sense to allocate? If you have a lot of people on your list, think of other options to celebrate, like a white elephant gift exchange. If you haven’t downloaded a budgeting app, this is the time to do it (I like You Need a Budget) — that way, you can see your spending in real time.


How can I afford the holidays if I’m paying down debt?


This is where communication comes into play. Tell your friends: “I love you, but I’m paying down a little bit of debt right now.” This is where you can bring up the idea of a gift exchange, so you’re buying one gift instead of 10. And then it goes back to the detailed budget. Let’s say you’ve set aside a certain amount for gifting this holiday. You want to make sure every dollar counts, and you’re creating memorable moments, too. So maybe that’s a picnic where you can gather as a family. Instead of going to a restaurant. You can also call your credit card company (especially if you’ve been a loyal customer and have paid on time) and say: "Hey, I'm trying to pay off this debt. I would love to pay it off sooner. Instead of paying 29.99%, can I pay 20%?" And that difference of nearly 10% will definitely go a long way. The worst they can say is no, but you don't know if you don't ask. 


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