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7 steps to a debt-free holiday season

Follow these seven steps from shopping and budgeting experts to build savings and afford the holiday season you want this year.

Getting through the holidays without going into debt can be tough. During the 2020 holiday season, consumers racked up an average of $1,381 in debt, according to a survey by MagnifyMoney, a 6-year high amid the pandemic. However, a majority of those surveyed said they didn’t head into the holiday season expecting to have to rely on credit to cover their costs.

With the 2021 holidays approaching quickly, the question is whether many will find themselves using credit again to get through the season of spending. The good news is that consumers can avoid racking up debt by taking steps now to build cash reserves and to keep holiday costs under control.

In this article:

1. Do it yourself to cut costs

To set aside cash for the holidays, start by identifying unnecessary costs you can eliminate now. In addition to the usual targets – meals out, weekly happy hours or the gym membership you’re not using – look for the not-so-obvious non-essential expenses you can cut.

“You may think that you’re living lean, but you’re probably paying someone for something that you could do yourself,” says Trae Bodge, a shopping expert at “Car wash? House cleaning? Manicures? Skip a service or two for a couple months, and you’ll save enough for at least a few gifts.”

2. Save your change, literally

Remember when you were young and diligently put change in a piggy bank to save enough for that toy you wanted? Don’t dismiss this old-school savings tactic now that you’re an adult because it still works.

“Put a big jar by the door and have everyone in the family drop their change into it every day,” Bodge explains. “In no time at all, you’ll have built yourself a little holiday gift fund.”

3. Set up automatic transfers to savings

To make saving for the holidays easy, set up automatic transfers from your checking account to a savings account. “Begin transferring small amounts of money on a daily or weekly basis that you won’t miss — say, $5 or $20 depending on your budget,” says budgeting expert Andrea Woroch.

And for every unnecessary expense you cut, include the amount of that expense in your automatic transfer to savings. “This helps you build up enough cash to cover those holiday purchases come December, or at least give you a needed budget bump,” Woroch explains.

4. Help your savings grow faster

Choosing the right savings account can help your holiday savings grow faster. “This means, don’t leave it sitting in a traditional bank,” Woroch says.Instead, opt for a high-yield savings account. For example, the average savings account offers an annual percentage rate of 0.10%. You can find some high-yield savings accounts with rates of more than 2%, according to

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5. Cash in on clutter

You don’t just have to cut costs to build holiday savings. You also can generate extra cash to set aside. One of the easiest ways to do this is by going through your home to find things you’re no longer using and can sell. “This is an especially good idea for your kid’s playroom since you’re likely to get a bunch of new toys from family members,” Woroch says.

To sell your unwanted items, take advantage of an auction website such as eBay. To price them right, look for similar items that recently sold online, Woroch says. “You also want to time the sale right,” she notes. “Schedule it to go live when more people are likely to shop. Think after work — 5 p.m. to 8 p.m.” Or you could use a site such as to sell books, CDs, DVDs, games, cell phones, tech items and even LEGOs without the hassle of an auction.

If you want to sell large items, you’re better off selling those locally through Craigslist, OfferUp or the Facebook marketplace, Woroch says. Stay safe by meeting with potential buyers at a public place during daylight hours.

6. Consider a side hustle

A side hustle is a great way to earn extra holiday spending cash, Woroch says. Plenty of retailers hire seasonal workers. Plus, you likely can get an employee discount with a retail job, which could help you save money on gifts.

If you’re reluctant to give up your nights or weekends for a part-time gig, there are plenty of side hustle options that offer more flexibility. “For instance, you can make up to an extra $1,000 a month just by watching someone’s pet in your own home whenever it’s convenient for you through sites like,” Woroch says. You could use a site, such as Sidehusl, to find gigs that fit your schedule and skill set.

7. Discuss gift expectations with family and friends

One of the biggest benefits of getting a jump-start on your holiday planning is that you have time to talk with friends and family about gift expectations. You could suggest drawing names rather than exchanging gifts with all family members and friends, Woroch says. Or you could propose that the adults in your family buy gifts only for the kids instead of for everyone.

By agreeing to reduce the number of gifts you give, you can help yourself and your friends and family spend less and avoid going into debt this holiday season.

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About Cameron Huddleston

Cameron Huddleston is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. She is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Forbes, MSN, Yahoo and many more print and online publications. U.S. News & World Report named Cameron one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named me one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, MSNBC, CNN and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR and more than 30 podcasts. Cameron has also been interviewed and quoted as an expert in The New York Times, Chicago Tribune,, MarketWatch and more.

Read more by Cameron Huddleston

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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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