Jim Carrey Just Said What Santa Always Wanted Us To Know: How To Avoid Going Into Debt Over The Holidays.

A Jim Carrey quote reads, "No holiday should manipulate you to the point where you're going into debt to show someone you love them." It’s true.


Debt, unfortunately, will be the likely outcome for many people this holiday season. Not only will they be buying overpriced and overvalued plastic, glass, cotton and hand soap, but they will also be charging those purchases to major credit cards that bear substantial interest.

To put credit card interest in perspective, one credit card balance of $3,000 charged at 23.99% interest can take up to forty-seven months to pay off if just $100 (slightly more than the monthly minimum payment) gets made each month. Over the next 3.9 years, these payments would equal just over $1,300 in interest payments. Therefore, a person who shops on credit this season could be spending significantly more than they’ve bargained for and unnecessarily putting themselves in financial constraints soon. 

As a mortgage professional, I can attest to the surge in mortgage refinance applications submitted after the holidays. Many borrowers who've accumulated large credit card balances from gift-giving usually prefer to consolidate and avoid expensive monthly payments afterward. It makes perfect sense. 

How can borrowers take preventative steps, so that they won't find themselves forced to pay down debt and interest later?

It’s essential first to be cognizant of the reality: that expensive holidays can indebt someone for years!

Here are three ways to make the holidays more affordable without losing its sentiment.

Consider memberships or lessons instead of toys.

As a parent, I can attest to my basement, becoming a plastic scrapyard over the years. After my kids play with their toys for a week or two, they end up in the basement and later, either sold at a garage sale or tossed in the trash. This year, I have respectfully asked family and friends to refrain from buying my children what I consider to be glorified plastic. 

Memberships and lessons, for example, hold higher sentimental value and can also be used throughout the year. A set of piano lessons, as one example, can be a gift that keeps on giving. Not only can a child and family member experience an increased bond between each other, but the present can facilitate the development of a new skill set and create a life-long memory. 

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Stop Buying For Adults

Most adults are (hopefully) aware that Santa is not real, so I question why we continue to exchange gift certificates that are devoid of thoughtfulness and originality? 

Whey do we shop retail for adults? Do we need to buy thousands of ounces of perfume? Sure they smell terrific, but according to a Los Angeles Fragrance Expert, "the ingredients in the average bottle of prestige perfume cost about $1.20 to $1.50. The actual liquid in a typical bottle of $150 perfume is less than 1% of the retail cost. The bottle, box and display carton typically cost four to six times more than the fragrance itself."

Similarly, the typical markup on clothing "ranges from 55 to 62 percent. If the wholesale price of a silk dress is $50, the retail price might range from around $110 to $130. Premium denim jeans often wholesale for around $150 and may sell at retail for up to $375 or more."

So, can we honestly ask ourselves if buying holiday gifts for adults is realistic, and more importantly, whether our adult friends and family could understand the benefit of refraining?

Revive Kris Kringle


"Kris Kringle," an ancient Secret Santa gift-giving tradition, has always been an excellent way to include everyone without a person's having an enormous obligation to buy something for everyone. It's fun, and the mystery of it all can make for an exciting gift exchange. 

Sarah A. Colucci
Sr. Mortgage Agent & Real Estate Expert