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Celebrating the Holidays without Debt

December 15, 2023

As a Financial Advisor, I've witnessed countless scenarios where the holiday season becomes a financial burden for many families, especially those navigating through life-changing events like a divorce. It's understandable that parents might feel the urge to overcompensate for their children's emotional needs by placing presents under the tree or purchasing extravagant gifts. However, it's important to recognize that embracing experiences over material items can be far more fulfilling and financially sustainable.


Understanding the Emotional Drive Behind Overspending

During the holidays, the emotional weight of a divorce can significantly influence spending habits. Parents may feel guilty or believe that expensive gifts can alleviate the pain of a separated family. I faced this myself during my first Christmas with my children as a single parent. I understand how hard it can be.  While these feelings are natural, addressing them without resorting to financial extremes is essential. Overspending strains your budget and sets a precedent that material possessions equate to happiness, which could be difficult to maintain long-term.

 The True Value of Experiences Vs. Things


Experiences, unlike physical gifts, create lasting memories and bonds. They can be as simple as a local day trip, a nature hike, or a visit to a museum. For my first Christmas as a single parent, I found discounted airfaire on Black Friday and took my kids to Arizona for a few days. We stayed with my best friend, and while it was a budgeted vacation, it was one of the best we’ve ever had. We started our tradition of visiting National Parks on vacation then, which we’re continuing this Christmas.

For those who can afford to travel, using points for trips or finding deals on airfare can offer incredible experiences without the hefty price tag. These moments spent together are invaluable and often overshadow the fleeting joy of a new toy or gadget.  Going into debt during the holidays has a ripple effect on your financial health. It can lead to stress, affect credit scores, and reduce your ability to save for future expenses. This financial strain isn't just an adult’s concern; children are wise and can sense stress, especially concerning finances.

Choosing experiences over material gifts is also an opportunity to teach children valuable life lessons. It shows them that joy doesn't have to be purchased and that the most meaningful gift is time spent with loved ones. This approach also instills a sense of financial responsibility and the importance of living within one's means.

Practical Tips for a Debt-Free Holiday

  1. Set a Realistic Budget: Determine what you can afford to spend without going into debt. Follow this budget strictly.
  2. Plan Experiences Over Gifts: Focus on activities that foster togetherness. This can be as simple as a family movie night, baking sessions, or even crafting.
  3. Use Rewards and Points: If you have accumulated points on credit cards or loyalty programs, use them to plan trips or purchase experience-based gifts.
  4. Shop Smart: For necessary purchases, look for sales, use coupons, and compare prices online.
  5. Emphasize the Spirit of the Season: Teach children that the holiday season is about love, gratitude, and family, not just gifts.
  6. Start a New Tradition: Create new traditions focusing on spending quality time together rather than exchanging gifts.

Navigating the holiday season, particularly during a transitional phase like divorce, can be challenging. However, by choosing experiences over material gifts, you can avoid the pitfalls of holiday debt and provide your children with lasting memories and valuable life lessons. Remember, the essence of the holiday season lies in togetherness and the creation of cherished moments, not in the price tag of the gifts under the tree.

From my family to yours, I wish you the best holiday season yet.