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How to manage holiday spending when you're dealing with student loan debt

Retailers expect a strong increase in holiday shopping this year and hope not to see unseasonably warm weather like last year's, which cut into sales and had this man in New York shopping in shirtsleeves.
Kathy Willens
Retailers expect a strong increase in holiday shopping this year and hope not to see unseasonably warm weather like last year's, which cut into sales and had this man in New York shopping in shirtsleeves.

For Nicole Plauché and her family, Christmas is the time of the year where they can use their preferred love language: gift giving. This year, however, Plauché is worried about how much she can afford to spend on gifts. Her main struggle? Student loan payments.

“It just doesn't leave much room for anything outside of just basic necessities,” said Plauché, a 23-year old tech sales manager from Dallas, Texas.

Marisa Johnson, 26, has approximately $145,000 in student loan debt from both her bachelor's and master's degrees. Since the COVID-era payment pause ended in October, she's been paying back $300 a month while she waits to see if she'll be enrolled in a new income-driven repayment plan.


Because all of her money is going to necessities and paying back her student loans, Johnson hasn't been able to spend as much on gifts as in previous years.

“I’ve mostly been trying to think of affordable gifts or combining gifts with my older sister,” said Johnson, a non-profit worker in Citrus Heights, California.

Plauché and Johnson are just two of the millions of people who had to start paying back student loans after the Biden administration ended the three-year payment pause.

“We know that the holidays are often a very joyful time of the year and an expensive one every year," said Courtney Alev, consumer financial advocate at Credit Karma. "With federal student loan payments just resuming, it’s going to add another often very significant line item into holiday budgets.”

If student loan payments are cutting into what used to be your holiday budget, here are some recommendations:


The pressure is real

From family expectations to social media and TV ads showing lavish gifts, many people feel that the only way they can show love is to spend a lot of money.

Between being a mom and a new grad with a salary to match, Plauché says she can barely manage her daily expenses. Still, she feels a responsibility to give her family gifts because that's how they have traditionally shown each other love.

“I don't want to give my family this message that they're not loved and it definitely adds a lot of pressure," she said.

Johnson feels guilty because the holidays are the time she feels she can show her family how grateful she is for them. She has always prided herself on being a great gift giver who not only finds something nice but knows how to spot unique and special gifts.

“I think I'm a little embarrassed to tell them that this year I might not be able to be a good gift giver,” said Johnson.

Acknowledging that you’re feeling pressure is a good first step towards making a plan to set expectations and be realistic about what you can spend.


Alev is a big proponent of the 50-30-20 budgeting method, where 50% of your income is allocated for necessities like food and rent, 30% for things you want, and 20% for savings and debt repayment.

To find space in your budget for gifts, Alev recommends that you plan ahead as much as possible and only take money from the 30% portion of your budget.

If the 50-30-20 is not the right format for you, there are plenty of other budgeting methods that you can use. Whether is recording your spending on an Excel spreadsheet, using an app or writing it down on a notebook, keeping a budget is most effective when you do it in a format that works for you.

If you are looking for a budget template, Microsoft Office offers a holiday spending-focused version.

Communicate with your loved ones

If you're experiencing a lot of financial pressure this holiday season, Alev recommends that you try to communicate your feelings to your loved ones.

“One of the hardest things is resentment can build up if you feel like you need to buy gifts for your family and you can barely make your student loan payments, so bring things up,” Alev said.

Sharing your financial struggles can be hard. If you want to talk but don't want to share every detail of your financial struggles, that's okay. Ultimately, what you want is for your loved ones to understand how you're feeling.

Plauché just recently started sharing her money worries with her family.

“I have been open with my family, just that I’m not going to be able to give gifts that year," she said.

Experience vs. gifts

Another great way to save money is to skip material gifts and instead, grant your time. In many cases, your family would rather spend quality time with you.

Alev recommended planning low-cost activities such as a hike with your family, or attending a free event in your city. Other options can be a holiday movie marathon with your friends, a free museum with your parents or a volunteering day with your family.

Use credit responsibly

Since Plauché is already paying her student loan debt every month, she is avoiding using her credit card this holiday season to avoid carrying more debt.

If using your credit card is your only option, it's important that you use it wisely.

If you struggle with overspending during the holidays, Alev also recommends setting a budget for each of your credit cards.

If you can't pay your balance in full every month, it's important that you understand when you payment is due and have a plan to avoid paying a lot of interest.

If you're planning to use “ buy now, pay later services ”, it's best to be very intentional, Alev said.

“It's easy to get caught up. It's easy to use it a lot and have several different payments that will come down the road,” she said.

Affordable alternatives

There is more than one way to find the “perfect” gift for your family and it doesn't always involve spending a lot. In her quest to find gifts that don't cause her financial stress, Johnson has been getting creative.

“I’ve definitely been trying to save or just make gifts because I don’t really have the disposable income to buy other people gifts or even buy myself a Christmas gift," Johnson said.

She's been looking into gifting a used book to her dad and because she loves painting and already has all the tools, she's working on a painting for her mom.

Other affordable alternatives can be sending hand written notes to your loved ones, buying from thrift stores, hosting a cookie bake off or simply spending quality time with your family.