Avoid the Debt Trap This Holiday Season

The holiday season can get expensive fast, especially as shoppers face higher prices and economic uncertainty this year. But with a thoughtful budget, a well-planned gift list, early deal-hunting, and smart use of rewards programs, it’s possible to enjoy the festivities without ending up in debt. From taking advantage of local Small Business Saturday events to creating meaningful homemade gifts, small strategies can make a big difference. And if you need help saving or exploring responsible financial options, First National Bank and Trust Company is here to support your holiday planning.

The holiday shopping season can be a festive but expensive time of year. For many consumers, it’s easy to get caught up in the moment and the excitement of finding a perfect gift for someone, and they wind up with a substantial amount of holiday debt that’s often financed through a credit card at high interest rates.
Financial wellness and holidays might seem like a contradiction, but with the right amount of planning and strategic shopping, you can get through the holiday rush without incurring a lot of debt. That’s why we put together these holiday budgeting tips to help you get through the season.
There’s a great deal of uncertainty this year about the economy that could weigh on consumer activities. According to the 2025 Deloitte Holiday Retail Survey, 77% of shoppers expect higher prices on holiday goods this year, and 57% expect the economy to weaken in the next six months. This marks the most negative holiday shopping outlook since Deloitte began tracking economic sentiment in 1997. Many shoppers will be looking for value and meaningful experiences, with promotions and deals impacting where they spend.

Put Together a Holiday Budget

Smart holiday spending starts with putting together a budget and sticking with it. Take a look at what you spent last year and make sure you include everything, including gifts, food, travel, any parties you intend to throw, and how long it took you to save up for or pay off your holiday bills in the past. Then consider your disposable income and how much you can afford to spend without breaking your budget or going into debt. Break your holiday budget down into different categories for gifts, food, decorations, and everything else. Hopefully, if you spend wisely over the holidays, you can start the new year off on a sound financial footing rather than figuring out how to pay off a credit card balance as soon as possible.

Get Your Shopping List Ready to Go

Your holiday shopping list should include everyone you’ll be buying a gift for, some ideas on what to get each person, and how much you’ll spend on each of them. Remember to include your friends, as well as acquaintances, and take the time to think about what they would like that you can afford. A gift for a neighbor, babysitter, or your child’s teacher doesn’t have to be expensive to be meaningful. Do you regularly exchange gifts with neighbors and other people, but have no idea what to get them? You might talk to them about not exchanging gifts or keep it simple by sending them a card. The benefit of using a list as it gives you a chance to think about each person and gift, which means you’ll be less likely to spend impulsively. By planning ahead, you might also take advantage of sales.

Shop Early and Look for Sales

The holiday shopping season starts earlier and earlier each year, so be on the lookout for sales before Thanksgiving. You might also check with your favorite retailers to see what kind of sales they’ll be offering over the holidays. Small Business Saturday will be on Nov. 29 this year. It’s a time when many small and independent merchants offer sales to encourage people to buy locally. Check with merchants in your area or your local chamber of commerce to find out more.
For more information on Small Business Saturday and similar events in our customer service area, check out these resources:
• The Downtown Beloit Association and Visit Beloit, Inc. have information on Small Business Saturday activities in Beloit on Nov. 29, and the Beloit Winter Crafter & Farmers’ Market is open every Saturday from November 2025 through April 2026, offering locally produced goods, free family-friendly activities, and food trucks. Visit Beloit also has a list of local boutiques and antique shops.
• Destination Downtown Janesville has information on the annual “Shop the Rock” festival to be held Saturday and Sunday, Nov. 22 and 23, in Janesville, WI.
• The Delevan, WI, Downtown Business Association holds an annual Holiday Wine Walk on Saturday, Nov. 22, that offers wine tastings from around the world and local shopping.
Rockford, IL holds its annual Stroll on State on Nov. 29 with a parade, fireworks, tree lighting ceremony, a visit from Santa, and musical performances.
Of course, Black Friday (the day after Thanksgiving) and Cyber Monday (Dec. 1 this year) also offer a chance to save money on gifts. BlackFriday.com offers information on major retailers participating in Black Friday and Cyber Monday this year. Before purchasing something, do an online search to see if there are any coupons available through websites such as Coupons.com and RetailMeNot.com. Both Newsweek and USA Today offer information on the best loyalty programs in the country this year.

Use Credit Card and Debit Card Reward Programs

If any of your credit cards or debit cards offer rewards such as cashback or points, using a card with rewards can help reduce the holiday shopping crunch as long as you don’t overdo it. Not only will a rewards card help your holiday dollars go a little farther, it also makes it easy to return an item if you lose the receipt, and you’ll have an easy way to keep track of your holiday budget.
You might use any reward points you’ve accumulated to help pay for your travel expenses, other purchases, or to reduce your credit card balance at the end of the season. At First National Bank and Trust Company, we offer a Debit MasterCard with Rewards and a Personal Visa Credit Card with Rewards so you can earn free reward points with your purchases.

Give Homemade Gifts

Is there a holiday treat your family always looks forward to? Some holiday cookies or fudge in a decorative box can be a great way to let someone know that you’re thinking of them. Just make sure you don’t create any issues for those with food allergies or restricted diets.
Do you or someone in your family have a knack for creating things? How about creating some holiday decorations or a festive centerpiece that they’ll remember for years to come? If you’re not sure what to make, you might get some ideas online from Pinterest and other sites. You could also make a gift of your time, such as creating your own coupons that someone can cash in when they need help with a particular task or would just like to spend time with you.

Cut Back before You Splurge

If your holiday budget seems a bit tight this year, look for ways you can reduce your expenses through the rest of the year. Don’t just think about large expenses, because even small ones can add up to a considerable amount over time. Is there a gym membership that you don’t really use? How about streaming services that you haven’t watched in a while? Try bringing your own lunch to work, eating out less, and bringing a thermos full of homebrew to work instead of hitting a coffee shop each morning. Not only can this help you save up and recover from the holidays, it could help you trim your expenses over the long term.

We’re Here to Help You Get Through the Holidays

Consider opening a savings account for your holiday shopping funds, so you can earn interest on what you save. We can also help you explore responsible credit options or apply for a personal loan to cover your holiday expenses. Please contact us to meet with one of our bankers or stop by one of our convenient locations in southern Wisconsin and northern Illinois.