Liz Pulliam Weston

The Basics

10 ways to pay cash for Christmas

Don't set yourself up for a holiday hangover. Here's how to give gifts to those you love without going into debt.

By Liz Pulliam Weston

A debt-free holiday is within your grasp.

It wasn't necessary to start saving last January. You don't have to give up the mall or make all your gifts. You may not even have to leave your credit cards at home.

There are at least 10 ways you can come up with the money to pay for your December celebrations without adding to your debt:

1. Adjust your withholding

Most taxpayers get some kind of refund every year, and the average amount is well over $2,000. Chances are you could crank way back on your withholding for the rest of the year, seriously boosting your take-home pay, and you'd still wind up getting at least some money back in April. Kiplinger has an easy-to-use withholding calculator that shows how much more you could get in your paycheck throughout the year by claiming extra allowances; the Internal Revenue Service has a more detailed version that can help you fine-tune your withholding to maximize your December paychecks without risking having to pay on April 15.

If you're going to do this, don't wait; you'll need to submit your new W-4 in time to adjust your remaining checks. Make a note to re-evaluate your withholding in January; you can switch back to your old habit of over-withholding, or you may decide to keep the extra money throughout the year rather than getting a refund.

2. Use your miles

More than 120 million Americans participate in at least one frequent-flier program, according to Randy Petersen of WebFlyer. You typically can't turn miles into cash directly, but you have options beyond trying to use them to get a free flight.

Many plans allow you redeem your miles for merchandise, for example. The exchange rate on these deals isn't all that great, but if you have a surfeit of miles, the miles are about to expire or you won't otherwise use them, it's certainly an option.

Another alternative is to convert your miles into a program you do use. WebFlyer has a mileage converter to help you explore your options. For example, you can convert 10,000 American Airlines miles into 20,000 Hilton Honors points. If you were planning to stay in a hotel anyway over the holiday, let your miles help pay for it and convert the money you would have otherwise used into cash for the holiday.

3. Ransack your rewards

Most credit card offers these days come with some kind of rewards program -- frequent-flier miles, cash back, points toward travel or merchandise. Many cards allow you to convert rewards into merchant gift cards, which you can use to buy real gifts.

Check your cards' websites or call their toll-free numbers to see what your rewards will get you and whether they're running any special offers.

One big caveat: If you're already carrying credit-card debt, don't add to it. Pay cash for the holidays. You should be particularly wary of adding any charges to a card that already has a balance, because there's no grace period -- interest charges on these new purchases start immediately.

4. Use your coins

Raiding the change jar to pay for Christmas isn't exactly new, but Coinstar change-counting machines have made it easier. You can avoid the machine's usual 8.9% fee by selecting one of its gift-card options for merchants including, iTunes, JCPenney and Lowe's.

If you don't want gift cards but do want to avoid fees, check with your local credit union to see if free coin counting is available.

5. Get a(nother) job

Plenty of businesses add bodies during the holidays: retail stores, package delivery services, craft stores, ski resorts and temp agencies (to fill in for all those vacationing workers). These temporary part-time jobs can boost your pay, and you may qualify for employee discounts. MSN Careers is one place to start looking.

If you need a more flexible gig, consider a home-based business that doesn't require a big upfront investment. Some possibilities: baby-sitting, tutoring, house-sitting, dog walking, errand running, housecleaning, home organization (garage clean-outs and closet tuneups might be particularly appreciated this time of year).

6. Sell your stuff

The weather's not ideal for yard sales in most of the country, but you can still cut your clutter and make some cash thanks to sites like eBay,, and Craigslist. and are good places to sell books, DVDs, CDs, video games; sell higher-value items on eBay; and list bulky stuff on Craigslist.

Continued: Sell someone else's stuff

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