The holiday debt spiral you claim is not happening

Why You Should Avoid Paying Your Credit Card Balance During the Holidays (and What It’s Really Costing You)

There’s a number somewhere in the back of your mind. You know that song. A credit card balance (or five of them) that you haven’t looked at in weeks, maybe months. You know it’s bad. You just can’t deal with it right now. Not during the holidays. Avoiding that will cost you more than you realize, and it’s time we talk about why high earners in particular fall into this trap.

Here’s what might surprise you: 62% of families earning $300,000 or more carry credit card balances. You’re not alone. This is not about mishandling money; what matters is that you are in a situation that requires strategy, not shame.

Why avoiding holiday debt is normal (but dangerous).

The Christmas season activates dopamine through giving, generosity and spending time with family. No one wants to think about financial issues when happiness and joy are the cultural mandate. It’s easy to say, “I’ll worry about it in January,” but that’s exactly what you said last year.

The problem is compounded because of something behavioral economists call “it.” bandwagon effect: You’re more likely to spend the same amount and in the same way as the people you see as part of your group. Just because your neighbors are over-decorating and your friends are throwing elaborate parties, that doesn’t mean they can afford it either. Everyone just looks richer when they become a real estate agent.

The pre-printed problem

There are currently two camps: the pressed and the pre-pressed. Lower income earners are actively cutting back on spending this holiday season; they have already hit the wall. But higher incomes? They plan to spend money more than last year, even as inflation erodes their purchasing power.

$200,000 today can buy you a completely different lifestyle than $200,000 in 2018. You’re not trying to upgrade, you’re just trying to maintain. And yet the math no longer works. That’s the funny thing about making good money and still feeling broke.

Why holiday shame hits high earners harder

When you’re making good money and struggling with debt, there’s an added layer: “I should have known better.” But this isn’t about logic or math. The holidays are about emotion and maintaining an image.

Survey data shows that high earners are more likely to lie about their debts than lower earners. Why? Because admitting that you are having a hard time feels like admitting that you have failed. Your group of friends goes to parties, silent auctions, gift exchanges – and no one wants to be the first to say, “I’m sitting this one out.”

But this is what The millionaire next door has taught us: the people with the biggest bank balances are often the ones who shop at JCPenney and drive used cars. They don’t spend on an image. They’ve got the game figured out.

Without a plan, costs increase to meet revenues

Here’s the uncomfortable truth: Without intentional planning, your expenses will always increase to match your income. People making $250,000 a year will struggle from month to month paying credit cards, mortgages, and bills, then wonder, “Four years ago we made half of this. Where did the extra $100,000 go?”

It was about lifestyle creep. Small upgrades that felt reasonable on their own, but led to a trap. And the holidays accelerate this because it is surrounded by emotions and social pressure.

“Money problems aren’t about the money. It’s just math wrapped in emotion.”
–Steve Rhode

What You Can Do Now (Without Canceling Christmas)

This isn’t about being Scrooge. What matters is that January doesn’t get any worse. Here’s how you can enjoy the holidays without a financial hangover:

1. First, identify your real budget

Before you think about what to buy Aunt Joan, consider what you can realistically afford to spend on gifts, trips, and holiday parties together. Then work backwards. You’ll have to be creative, but that’s better than the alternative: doing what you did last year and expecting different results.

2. Give the gift of time instead of things

This is what people actually remember: experiences, not objects. A lunch with a friend where you catch up for two hours means more than just another box of stuff. The only cost is the meal – and you are worth more than you give yourself credit for.

A couple, at the beginning of their marriage, with no money, gave everyone five-bean soup for Christmas: a homemade mix with a handwritten recipe. Forty years later, people still talk about it as one of the most meaningful gifts they have received.

3. Have the conversation with family

Call your siblings. Suggest a Secret Santa instead of buying for everyone. Suggest skipping gifts between adults and focusing on the kids. Chances are they’re feeling the exact same pressure you are and will be relieved that someone finally spoke up.

4. Start a Christmas fund for next year

This won’t help you today, but it’s New Year’s resolutions that really work. Take what you spent this year, divide by 12 and set up automatic transfers. Use an app like Acorns or a digital “envelope system” if physical cash isn’t your style. When December comes next year, you’ll actually have the money.

5. Look at the number

Open your credit card app (all of them) and see what you owe. You don’t have to do anything about it today. Just look. That’s step one. Awareness precedes change.

Your income is your greatest asset

Here’s what might surprise you: Your income isn’t the problem. Your income is actually your greatest asset. The problem is the lack of a strategy for its deployment.

If you’re still making good money and drowning, you don’t need a lecture on lattes or a spreadsheet. You need real solutions: debt settlement, strategic planning, professional guidance. The people who escape this cycle are not those who merely ‘tried harder’; they are the ones who received help in creating a real plan.

This show is for you

If you’re making good money but feel lost, alone, ashamed, or confused about your debt situation, you’ve found your people. Every Thursday, the Get Out of Debt Guy Show features strategies that actually work for high-income earners – not generic advice that assumes you’re broke or stupid.

Next week: specific strategies, scripts for saying no, and how to survive the rest of the holidays without your January self hating your December self.

Download the free Holiday Debt Reality Check at GetOutOfDebt.org.