How to Pay for Christmas When You Don't Have Money

Holidays can be stressful if your gift list is larger than your bank balance. You have options for how to pay for Christmas when you don't have money. The National Foundation for Credit Counseling recommends setting aside a specific amount each month that's dedicated to holiday expenses. If you're still short when holiday shopping season starts, determine how much you can afford to spend and consider these options:

  • Personal loan: This can be a cheaper alternative to using credit cards, but lenders typically require good credit for personal loans. Unlike personal lines of credit and some credit cards, personal loans are made for a specific amount, typically carry fixed interest rates and are repaid according to a set schedule with consistent monthly payment amounts.
  • Personal line of credit: As with personal loans, a personal line of credit requires good credit. It differs from a personal loan by offering a line of credit that you can draw on as needed. You'll pay interest only on amounts drawn against your personal credit line. This option can be risky if you're inclined to overspend. Otherwise, a personal credit line can be used for unexpected holiday expenses.
  • Credit cards: Major credit cards offer a convenient way to pay for holiday expenses and budget payments over time. It's important to shop for the best rates, features and benefits when considering a new credit card. Establishing a credit card dedicated to holiday expenses can help you pay over time, but it should not be used as a gateway to unlimited shopping. Establish a holiday shopping limit and try to spend less than your budget. Look for a credit card that offers an introductory zero percent or low percent interest rate and budget to pay off the card balance before the introductory period expires. Verify interest rates and additional fees charged before submitting an application.

In addition to financing options, the following information can help you stay within your holiday budget.

How to Pay for Christmas Without Busting Your Budget

Shop for best prices for gifts before buying. Remember to include shipping charges for items you'll purchase online.

Sell unused/unwanted items

Every household has things that aren't used or no longer wanted. Have a garage sale or list items for sale online. Dedicate all funds from unwanted items to your holiday budget.

Consider cooking and crafting

If you're famous for your peach jam, shortbread cookies or triple alarm barbecue rub, consider giving these items during the holidays. If you're creative, consider making or adorning picture frames, flower pots or candle holders for family and friends. Give your neighbor a gift certificate for babysitting, dog walking, handyman or lawn care services that you can do. Homemade gifts and gifts of your time and talents can help fill the gap between your holiday budget and what you wanted to spend.


If you've maxed out your holiday spending, consider volunteering during the holiday season. This is a great way to involve your family in the spirit of giving without going broke.

Consider your reasons for exceeding your holiday budget

It's easy to be caught up in a holiday shopping frenzy. Your daughter wants a certain piece of jewelry. Your husband wants the latest smart phone. Your wife wants a costly designer handbag. You get the picture, but if big ticket items will wreck your budget, it's time to ask whether excessive spending is worth it in the long run.

The Consumer Financial Protection Bureau encourages consumers to understand how overspending affects their budgets after the holidays and scale back holiday spending accordingly.

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