What to do if you are deeply in debt and the family expects gifts


Michelle Singletary takes a break for the holidays. In her absence, we offer this updated column from her archive, originally published on November 26, 2019.

When you’re in debt, the responsible thing to do is ignore the pressure to give. Suppress, as best you can, the misguided guilt that love comes wrapped up in a pretty box with a red bow.

Sure, that’s easier said than done, right?

You’ve been indoctrinated to give until it hurts, even if it means delaying paying your debt.

This was the predicament facing a Virginia couple whose predicament could be traced to anyone who is deeply in debt and also grappling with how to withdraw from lending.

“I have two small children and I will at least have to bring them some presents under the tree,” wrote his wife. “My husband and I are $62,000 in credit card debt. We are working with a debt management service to clear it in three years. It’s tough, I won’t lie, but I’m worried about what to tell people about not returning gifts. Some advice?”

Before answering, I needed some background. How old are the children? How do you end up with so much credit card debt?

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Much of the debt was racked up after his wife lost her job during the Great Recession. It took her a year and a half to find a new one. Almost everything went on credit: rent, utilities, groceries, she said.

There were wedding expenses, followed by childcare expenses for their two children.

“Back then, there were more living expenses, poor choices, impulse buying and retail therapy,” she said. “I tried to consolidate my debt into a credit card with a lower interest rate, but the fine print, which I only read later, said it had to be paid within 12 months, which it wasn’t. Over the years, multiple balance transfers, in addition to purchases, have caused the total credit card amount to spiral out of control.”

So here they are now, trying to fix their finances.

“I’m working overtime and pinching the best I can,” he wrote. “My goal is to help my family get to a better place in life, not keep up with the Joneses.”

Special occasions — birthdays, weddings, anniversaries, and other gift-giving holidays — make it difficult to stick to a debt repayment plan.

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“Some people expect gifts,” Mom wrote. “I just don’t want it to be too awkward when I give them homemade cookies. I’ve tried to lay the groundwork and tell them we’re saving money this year and not expecting too much, but obviously the expectation is there nonetheless. We tried this last year and were disappointed and the discussion of our choice of gift was frowned upon.

Since the couple was working to pay off the debt, I just focused on the question of what to say when you can’t give your way.

First let’s talk about what I suggested they do for their children, who were 7 and 20 months old.

For the child, you don’t have to buy anything, because he will probably be thrilled just opening the boxes. When my kids were toddlers, I’d look for games, toys, and stuffed animals that they didn’t play with and that were buried at the bottom of their toy bins or tucked away at the top of their closets. I packed up those items and put them under the tree.

Yes i did it. (All grown up now, my kids still like to joke about it.) But, seriously, who remembers what they achieved as a 2 year old?

For an older child, buy her only a few things, with cash. Pick one important thing she wants that isn’t too expensive. I also suggested if they are having a family reunion, wait and open all the presents at once. This way, the kids will get all their presents at once, which will help you feel less guilty about not giving them many items.

This brings me to relatives. You own your financial truth.

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Be honest about the huge debt. You don’t have to share specific details, but let people know that you’re trying to be financially responsible and, until further notice, can’t afford to exchange gifts. You might be surprised at how many friends and family members will feel relief that they too are struggling.

There is always the possibility that you will get pushback. Ignore it. If you have a lot of credit card debt, you can’t afford to worry that other people will be offended if you don’t get them a sweater that they won’t like anyway.

Holiday shoppers, skip the store credit cards

Your debt is your priority, don’t try to please an adult who acts like a child.

Don’t let your emotions lead you to derail your commitment to living within your means and reduce your responsibilities.

Whatever the celebration, give yourself the gift of financial stability by staying focused on paying down that debt. Also, as I always tell people, it should be about your presence, not your gifts.

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