How to Handle Christmas Gifts When You’re in Debt


A couple of years ago, we were in the middle of a huge push to pay off our credit card debt once and for all. Then, the holidays rolled around. No, this joyous time of celebration did not make us happy to deck the halls and start singing about reindeer. We had gotten into the habit of not spending, and now it was time to think about holiday shopping. In the past, we bought gifts for most all of our family members, but spending a few hundred dollars on gifts is not the smartest move if you want to kill the beast that is consumer debt. This is my plan for handling Christmas while in debt.

Slash Your Gift List

There is no rule that you have to buy a gift for everyone you know or are related to, but if people assume you are buying something for them, they will probably get something for you. You might feel awkward if you show up with nothing, so make sure you tell people ahead of time that you’d rather not exchange gifts this year. You can share your debt story or not. Either way, there are tons of reasons you can use from we don’t need anything to we don’t have space to pack extra gifts, we are donating to charity this year, or we just think it’s silly to buy so many gifts.

In my experience, this goes one of two ways. In most cases, people are relieved. That’s one less gift they have to buy, and honestly, were your gifts in the past so great that anyone might miss them? My family called me a scrooge because they don’t do well with change, but eventually they got over it. My Mom and Dad still give us gifts, and we usually give them pictures of our daughter in return. They actually like that better than a gift card or other random gifts we’ve given over the years.

What About the Kiddos?

Even in debt, I think you have to get Christmas gifts for your kids, especially younger ones. They didn’t get you into debt, and they shouldn’t feel like they weren’t good enough for Santa to bring them presents. However, you don’t have to get each kid a new iPad or flat screen TV.

Little kids could care less where their stuff comes from, so it’s easy to buy used or from Ebay. You could also buy lots of cheap things like crayons, coloring books, small toys, tape (yes, my daughter thinks a roll of tape is the best gift ever), or art supplies and wrap them individually. Quantity trumps quality with younger kids.

For older kids, especially if they are teenagers, I highly recommend explaining your debt journey to them. You don’t want to scare them or make them feel guilty, but there is no reason why they can’t see what happens when parents run up debt loads. Shannon at the Heavy Purse has some great ways to talk to your kids about financial matters if you need help.

You can give older kids a budget and let them pick out something reasonable. You could also offer them an experience instead of a ton of gifts under the tree. It might be more fun and affordable to pack up the family and stay at a hotel for a night in the city. You could look at Christmas lights or go ice skating. Many zoos or museums have displays that are discounted or free on certain days. You can get creative. As a kid, I always remember experiences way more than some gadget I got for Christmas. Regardless, having a discussion about why you are choosing not to spend as much money this year will go a long way for your older kids. Even if they act like bratty teens now, the lessons will stick with them and hopefully, they will avoid your mistakes when they are old enough to make their own financial decisions.

Be Smart If You Must Buy Gifts

I realize that there are some gifts that you may have to purchase. To me, it really defeats the whole purpose of the season to feel like I have to buy a gift, but it isn’t always advisable or practical to tell everyone you are deep in debt and won’t be buying anything this year. If you do feel like there are some people you can’t leave off your list, at least plan ahead and have a set spending limit. Don’t wait until the last minute to shop when you might be overwhelmed and tempted to spend more to get it over with.

Also, don’t put any more debt on credit cards. If you must spend money, find a way to earn more or spend less for your normal expenses until you can make up for the excess.

Lastly, if you do fall off the wagon and rack up some debt this holiday season, don’t give up. Don’t let this setback be an excuse to go back to your old spendy days. Get back on track as soon as possible and start making plans now for next year so you won’t be in the same situation.

What are your tips for buying Christmas gifts while in debt? Do you buy gifts for every family member? 


Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of


  1. Hey Kim! Slashing your gift list is a great tip and pretty well accepted these days. Our family gets together and gives gifts only to the children. All other gifting is usually done before we all gather. It takes a lot of stress and pressure from family memebers who aren’t as fortunate as others.

    For friends and coworkers, nothing like coming over for some peppermint hot chocolate and talking about the holidays in a positive light with old christmas classics playing on the TV!

    All the best this coming season!

  2. This was a really stressful argument I had with my husband recently as I told him this is why I don’t like going to his parents for Christmas. It’s too much family together that you have to buy gifts for and I just don’t like it. I realize you spend so much more if you do gift cards than if I can find something on sale online or at a store so I try to cut out gift card gifts unless I get them for free through one of my rewards cards, like with Discover or something.

    I agree with the photo sentiment… most parents/grandparents would rather have a great family photo in a frame (can buy one second hand or repurpose one you own) than some body soap they won’t use! I’m also a fan of costume jewelry myself so if you have family like me who love lots of costume jewelry, you can find a store like Charming Charlie (if you’ve got one) where you can find great gifts on clearance that won’t break the bank.

    1. I think if my family really wanted something they couldn’t by for themselves, it might be different. All the adults have everything they need, and most of what they want, so it just doesn’t make sense for us all to buy something for each other. I’d rather just do a meal and watch movies or something.

  3. I really agree with your philosophy here. We’re currently still doing the whole gift exchange ordeal, but I often think about just opting out. There are so many people to buy for and it’s just a mess. It takes away from what is important and just encourages many of these people to be even greater consumers. We try to buy everything on sale and keep in minimal. It still hurts.

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