6 tips for a debt free Christmas

I wrote this post last year before Christmas, but since it is probably something on a lot of people’s minds I decided to repost it. Enjoy!

1. Start Saving Early

Duh. That is SO common-sense. Well, it is. But for some reason, I used to be surprised year after year at how hard Christmas hit my wallet. We know its coming. It is the same day every year. We can’t run from it, so we might as well save up for it. Sometimes these simple things take a while to sink into my skull, but I finally figured out that by saving up for it, I was a lot more likely to stay out of debt. Often times it is the simple things that have the biggest positive impacts on our finances. It is mid-November. Let’s start saving.


2. Create a budget for how much you will spend

Why after every Christmas are most people looking at huge credit card bills wondering, “Where did all that money go?” It is no different than any other area of our lives, if we don’t have a leash on it – it will be out of our control. Think of your money like your neighbor’s dog – Oh yeah, your neighbor thinks he has his dog under control. But every time he has the dog in the front yard it runs over and jumps on you. He thinks he has control of the dog, but I am sure if he had a leash on the beast, he wouldn’t let it jump on you when you are on your way to work. Of course you probably are not going to tell him that his dog is terribly behaved, just like my checkbook isn’t going to tell me that I have no control over my money. In order to have control you have to monitor it (dog or money) or have a system in place (put up a fence or make a budget) that will do it for you.

My wife and I started budgeting for giving a couple years ago, after we realized how out of hand our Christmas spending was getting. We just sat down and made a list of everyone we were going to buy a gift for that year. We wrote down (actually we used an Excel budgeting spreadsheet) how much we were going to spend on each person and totaled it up. We took this total figure and worked backwards from Christmas to see how much we would have to save each week in order to have enough. This helped us get motivated to start saving early.

3. Stick to your budget

After all, that is why you created it in the first place – right? If you decided to spend $20 on Billy Ray, then you have to be vigilant not to buy him that $50 toaster that is just glistening in the florescent light of the department store. Don’t get me wrong, there is nothing more fun than giving great presents, but you have to be honest with yourself and others about what you can spend. Trying to spend $100 on each person’s gift when you only have $10, isn’t being truthful and it is going to hurt you more than anyone else. This is the whole “keeping-up-with-the-Joneses” disease that is rampant these days. I think most people you are buying gifts for would want you to give from your heart, rather than under compulsion to spend huge amounts of money that you do not have.

4. Get Creative

When you are strapped for cash you have to use creativity to get the upper hand. A creative gift can often beat out the most expensive gift. I am not talking about, “it’s the thought that counts, dear.” I am talking about meeting a unique need or desire for that person. To give the best gifts you need to know about the recipient. Listen to what they talk about. Listen for clues as to what they are interested in. It probably isn’t a necktie or a picture frame. Shop accordingly.

5. Shop Online

A lot of brick-and-mortar stores can’t compete with the prices of the online stores even with the additional shipping costs. If you decide to do a bunch of shopping online this year, Amazon.com has a deal where you can ship as much as you want for a year for $79. And they are not just a bookstore anymore, they have everything from electronics to candles and you can even buy an engagement ring from them. You also should look at Ebates – they pay you for shopping via their website.

6. Start Shopping Early

I love the convenience of online shopping, but I also love going to the malls in the heart of the Christmas season. Granted, the parking normally isn’t fun, but I love Christmas (ask my wife and she will tell you how annoying I am – i.e. Christmas music starts November 1st) and it just doesn’t seem like Christmas to me without spending some time in the malls during the season. Since department stores start breaking out the Christmas decorations after the 4th of July sale (slight exaggeration, but not much), you have plenty of time to get started early and have the “spirit of Christmas.”

The key is to use early shopping to your advantage. Having your budget in mind, it gives you a lot more time to think about WHAT to buy everyone and gives you more opportunities to catch things on sale.

  1. Mrs. Micah

    (my friend starts her Christmas music on October 1st, so tell your wife it could be worse.)

    You’re totally right about the new necktie, they’d probably rather have something less expensive that they can actually use!

  2. Crystal

    Hey, don’t forget to budget for wrapping paper, ribbons, holiday cards, and all of the little extras that go along with gift giving. Those items can really add up. (Reuse your pink Easter Bunny gift bag; your husband’s family won’t mind.)

  3. rose

    great post. i normally forget to shop early, but the other day i did find two perfect gifts on sale that i plan to give my friends. i was very proud of myself. : )

  4. Bob

    Good point – that “stuff” does add up, and there really can be a lot of it

    Way to go – I love getting started early, it seems to make Christmas last longer :)

  5. guinness416

    Did you have a redesign? Looks nice. I’m a naturally frugal person for the most part, but Xmas is the one time of the year that can really slip. Something about the frantic atmosphere in the shops really gets under my skin. So my advice would be to avoid the big places that use all the psychological tools to get you to open your wallet – the music, the product placement, the ads, etc – and shop in local or craft shops. Works for me, anyway.

  6. bob

    I did do a little redesign – thanks! You are right, they do set you up to spend!!

  7. Dividends4Life

    Excellent list! One thing we do with family is give a gift card. Since everything is reduced after Christmas, the dollar goes further.

    Best Wishes

  8. Andrea

    The small local arts and crafts fairs start here in mid-November, and I have found they are a great way to find unique, beautiful gifts that don’t break the bank.

  9. Frugal pursuit

    After taking a budgeting class from my credit union, I put in a category for “gifts” and that has really helped keep gift giving from blowing a hole in my budget. Plus with numerous nieces and nephews, I can usually find used books and toys in good condition for gifts, another money saver. The early shopping (e.g., garage sales) also keeps me out of stores (I don’t like cruising the parking lot) plus online purchases are delivered to your house. Hard to beat that convenience! The budgeting has only improved as I think I am more prepared with gifts this year than the year before.

  10. bob

    @Frugal pursuit
    Right on! That is a great tip for budgeting, we started budgeting for gifts a couple years ago and it made giving a whole lot more fun!! The money was already allocated and just ready to be given rather than me having to decide if I was going to give a gift or put gas in my tank!!

  11. Kim

    These are some good ideas. I am looking for ways to get through Christmas this year. I am doing the holidays on a super tight budget this year.

  12. Michelle

    Being a crafty person, I spent all year knitting and crocheting for my family. There are so many cool designs out there now that for people who are into knittng and crocheting, a homemade gift doesn’t have to be something your grandma would wear! And it kept me from buying yarn without a purpose (as I am wont to do!).

  13. bob

    its okay it happens to me all the time 😉

  14. Stacey D.

    I never, ever buy Christmas wrapping paper, cards, etc. until after Christmas. I use plastic under-the-bed bins to store everything under my bed. I also stock up on things like scented body lotions, sprays, etc. after Christmas to use as small gifts for friends and family during the Christmas season.

    Right after we were married, my husband and I set a limit on how much we would spend on each family member and have stuck to it regardless of pay raises/cuts etc. It makes it a lot easier as more nieces and nephews have been added to our family over the years.

  15. Ruschel Ernacio

    These tips are great, and for those who want to really save money, these tips can really help especially with discipline.

  16. Smart Money Manager

    Truly amazing post and a great reminder for everyone. At least I still have enough time to save and shop before Christmas season.

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