The holidays are “the season of giving,” which usually means they’re also a season of spending. For many Americans, that generosity translates into debt. 

Last year, approximately 36 percent of consumers took on holiday debt, according to a Lending Tree survey. And these splurges aren’t just one or two small toys. The same survey found the average amount of holiday debt is $1,249. 

Buyers have big concerns about their holiday outlays: grocery costs, gift prices and fears about disappointing kids and family members all mess with one’s yuletide psyche. That extra financial burden is often tougher on younger generations. Millennials and Gen Zers are most likely to not have paid off holiday debt by February and most likely to regret their holiday spending.

Part of the reason for the millennial debt is that they’re often the parents of young children, given that their ages range from 25 to 40. They’re also dealing with other bills related to student loans and growing families. The popularity of buy now, pay later (BNPL) services has also grown, leading to ways to take on debt that seem less painful at the point of purchase. Buy-now, pay-later apps can lead to more debt and negatively impact credit scores​​.

Don’t want to go into a hole for the holidays? Consider creating a budget and tracking spending. Take advantage of sales and coupons — but only to buy those things you really want. Getting enticed into buying big ticket items that seem like a good deal is a big reason holiday spending goes overboard. If you don’t have a lot of cash on hand, now may be the time to cash in those credit card rewards. Thinking creatively about gift-giving​​​​​​​​. Store bought doesn’t always mean better. A thoughtful batch of cookies can still do wonders. 

Still have that big ticket item on the brain? The holiday season also comes with a lot of seasonal jobs. Earning extra money through side gigs can help avoid debt. 

To manage debt, nearly 45% of respondents considered consolidating their debt or obtaining a balance transfer credit card, particularly useful for those paying above-average Annual Percentage Rates (APRs)​​. There are other ways to avoid high interest rates. Consumers can consider balance transfers to cards with 0% introductory periods, make more than the minimum payments on their credit cards, and use debt consolidation strategies like balance transfer cards or consolidation loans​​​​.

When paying off debt, two effective strategies are the debt avalanche method, which focuses on high-interest debts first, and the snowball method, which prioritizes smaller balances for quicker wins​​. These strategies help maintain momentum and focus in reducing holiday debt, ultimately leading to better financial health and preparedness for future holiday seasons.

Worried about next year? Financial experts recommend paying down debt as quickly as possible and planning for Christmas spending throughout the year​​.