Suze Orman Calls the Holidays a 'Dangerous Money Season.' Here's Why

She certainly has a point.

Many people look forward to the holidays, from parties to gift exchanges to drives through town to take in all of the decorations and lights. But while there's certainly nothing wrong with making the most of the holiday season, it's also important to acknowledge that it can lead to serious overspending.

In fact, there's a reason financial guru Suze Orman calls the holidays "the dangerous money season" in her blog. Orman knows full well that many people rack up balances on their credit cards during the holiday season they can't afford to pay off right away. And if that's a route you tend to take, you should know that it could hurt you in more ways than one.

The problem with holiday debt

You might rack up a balance on your credit cards during the holidays thinking you'll pay it off in a month or two. But what happens if one or two months becomes a year because other unplanned expenses get in the way? Suddenly, you're looking at a lot more interest on your balance -- especially these days, with interest rates being higher thanks to rate hikes on the part of the Federal Reserve.

Also, you never know when a credit card balance might prevent you from meeting other financial goals. Let's say you're really hoping to buy a house in 2023. You've saved up a down payment, you have a steady job, and you're ready to take on the responsibility of having to maintain a place of your own. Too much debt relative to your income could be a reason a mortgage lender denies you a loan. And your holiday credit card balance might push you over the edge in that regard.

Ways to avoid debt

Steering clear of holiday debt could really work to your benefit. And there are steps you can take to pull that off.

First, set a holiday spending budget based on the amount of money you have available in your savings account and from your paychecks. If that total amounts to, say, $800, that's the limit you should stick to.

Next, order your holiday purchases by priority. If you can't bear the thought of not driving four hours to see family, prioritize the cost of gas and tolls to make that trip. If you usually bake holiday cookies and give them out to family and friends, you might make the cost of ingredients your next priority.

Eventually, you may need to cut back on something, whether it's gifts, cards, or decorations. But this way, you're at least making sure that the things that meant the most to you are traditions you can still pull off.

According to Orman, during the holidays, "the goodness of your heart can lead to very bad results." So if you want to avoid harming your finances in the course of your holiday spending, do what you can to avoid debt. That could allow you to close out the year with less stress and start off 2023 with a clean financial slate.