Christmas is often one of the biggest spending times of the year for most of us. How can you prepare for Christmas so even with all the spending around the holidays you can remain debt-free?
The holiday spending season starts on October 1 nowadays. Retailers call it Quarter 4 and expect their biggest profit returns and sales during the last three months of the year. American consumers are happy to oblige them by spending, spending, spending all quarter long.
As consumers, we get caught up in the holidays, swipe, swipe, swipe our credit cards and hope for the best in the coming year, maybe we will get it paid off this year.
This is how we continually dig ourselves deeper into our hole of credit card debt.
How can we begin to shift how we do things? How can we start to live off the cash we have and stop paying banks extra interest on all the holiday spending we do?
Here are 11 easy steps to help you do just that.
1 Take a stand against spending on credit
The first step is committing to yourself that you will not buy anything that you don’t have the money for. Having a credit card with open credit is NOT having the money for something! If this has been a problem for you in the past, I challenge you to put the credit cards away. Clear the credit card information out of your Google Chrome or Apple Wallet and commit to only using your debit cards and cash this holiday season.
2 Decide before shopping how much you have to spend
A woman who is wise with her money knows at the beginning of the year that Christmas will come and it will cost a lot! She sets aside money each month in her Reserve Savings account to pay for the holidays as well as other expenses that she expects but are not regular throughout the year.
This woman will have an amount already set prior to October 1 determined by her savings throughout the year. She will then use that amount and create an appropriate Spending Plan to meet her holiday needs sticking to the amount she has to spend.
Other Ways to Prepare Financially for Christmas:
If you were not wise about money at the beginning of the year, you can always start next year this way! However, what do you do this year? My dear friends, this does not give you an excuse to use your credit cards just because you didn’t plan and save ahead! This year may be a little tighter and slimmer on the gifts and entertaining this year so you can get back on track. It will take will power and determination, but I am sure you can do it.
If you have not saved ahead you will need to check how much money you can set aside from your paychecks from now until Christmas. This will be the amount you have to spend. If you can cut costs in your general spending, this will help you have more by Christmas to spend on gifts, decorations, travel, and entertaining. Going through your spending and cutting costs will help as you move into the new year and plan to save ahead for Christmas too.
3 Clean out and sell the old to help prepare for the new
I always make my kids go through their toys before their birthday and in the fall for Christmas. This makes room for the toys they will receive and then I can resell some of the old to make extra money to put toward their new presents.
Some places to resell the kids’ clothes and toys are Facebook Marketplace, garage sales, to your own friends on Facebook, to your neighbors on Nextdoor, or to kid’s consignment sales or resale shops. Even if you only get a few dollars, it has helped you declutter and that is a few dollars more for your Christmas budget!
4 Create a holiday spending plan
Make a list of all the expenses you will have this holiday season.
Set a limit for each area of spending. If you can find one of the items or meet one area without using your allocated amount, you can shift the extra to another category, however, don’t go over your total limit.
Don’t forget to include the following in your plan:
- Halloween Costumes, Candy, Parties
- Food for entertaining or gifts and extra items for special food prep
- Travel to see family and friends
- Workplace expenses (gifts or parties)
- Charitable Giving
5 Set expectations early with family and friends
If you are reducing what you have done in past years to keep Christmas off your credit cards, then be sure to communicate with your family and friends early so there will not hurt feelings. Maybe they will surprise you and will jump right on board with the idea of cutting costs and make it a fun and meaningful holiday for all without the stress of added expenses.
Get creative with how you limit spending on gifts. Here are some ideas to get you started:
* Draw names among family and friends to each give and receive one gift instead of having to give to everyone.
* Plan a family event or experience together rather than buying each other gifts.
* Exchange something with the intent it can be regifted. For Example, each chooses a great game that will be rewrapped and passed on next year. The family recipient can enjoy family nights all year with the one they get, maybe even adding tips, tricks, and ideas to make the game or game night better when they pass it on next year.
* Agree to a silly or crafted theme instead of expensive gift exchange such as a White Elephant, something you found at a thrift store, most unique mug, or ornament, etc.
* Give only homemade gifts
* Set a low-cost limit for each person
6 Start a new family tradition with your kids
Instead of just buying them tons of gifts as you may have in the past. Limit what they will get to a list such as:
One you Want, One you Need, One you Can Wear, One you Can Read.
This four-item list was adopted by many families to cut costs. Some added or adapted with some of the following:
One you can Do. (a class or activity) One to Create. (an art kit or project-based gift) One that’s Sentimental. One we will Share. (a game or an outing)
Create your family’s list for each child using some of these or ones you make up yourself. Let the kids know ahead of time so they know what to expect under the Christmas tree.
I did this last year. I went from giving many gifts to really limiting and my kids knew ahead of time and it didn’t bother them a bit. It was more fun because they could enjoy what they had rather than be overwhelmed with too much at once.
7 Create and carry a gift list
List the people you will shop for, the spending limits or guidelines for the gifts needed, add some ideas of what to get, then carry it with you.
I keep this list in mind all year long! I check clearance racks and deals for gift possibilities for my recipients. Even if I get it in July, I will hide it in my gift closet until Christmas. This helps me get the best deals possible for all the gifts I give.
During the holiday season, I watch the sales and deals checking my list often to find the cheapest way of buying for everyone on my list. I will also watch for lower-cost alternates to my ideas and grab what works best.
Cross them off as you go, and don’t wait till the last minute when you have less time to comparison shop, especially for larger ticket items.
8 Take advantage of free events in the community
Check the community calendars early and plot out some of the tree lighting ceremonies, the light parades, the Winter Wonderlands, live Nativities, maps of home tours to follow, etc. that are free for you and your family to attend.
We try to attend 2-3 of these throughout December to limit the entertainment that costs us while creating memories and family fun regardless of cost.
9 Use layaway to spread out the payment without adding an interest charge
Several stores will still allow you to pay through layaway. It can help you pay over time without the interest added like on a credit card.
Explore if layaway is a good option for any of the gifts you plan to purchase.
10 Encourage gratitude through service
Plan a time for your family to serve during, before, and after the holiday season. This helps us all to remember just how fortunate we are during the holiday season.
My kids and I like to prepare Shoe Boxes for Operation Christmas Child. They are amazed at the fact that some kids only get this small box for Christmas and may not get any other gifts throughout the entire year. We love to track our boxes to see what communities they go to and read about the kids that live there.
This sure helps them see how thankful they can be when the gifts under the tree look sparser than they have in past years.
11 Stick to Your Plan and Enjoy a Debt-Free Christmas!
After all this planning, stick to your plan. Don’t give in to temptation for a deal you feel you can’t pass up. Don’t put any of those deals on your credit card unless you have the money in the account already to pay it off!