According to the Gallup Poll, US consumers are expected to spend $785 on Christmas gifts this year. Depending on the size of your family, you may spend two or three times that amount. The truth is, Christmas can be expensive.
The majority of us will purchase those gifts on credit cards only to have the stress of paying off those cards in the next year. I know from personal experience, when those credit card bills start arriving in January I have serious Christmas remorse. The holiday season is stressful enough, I don't want that stress to follow me into the New Year.
We have used a simple cash only holiday budget for almost 10 years now. When our kids were little, we didn't have a lot of money to purchase extravagant gifts. I am a minimalist by nature, so I always lean toward purchasing a few things each Christmas.
Now that we are debt-free, we have a lot more wiggle room in our budget. We can afford to purchase more things for our family, but we still choose to keep things low key. We don't go all out for gifts for our kids. We still focus on our time together and serving others more than gifts.
Those early years were sweet and fun. We've learned a lot about how to make it through the holidays without carrying debt into the New Year. Here are our best tips for a debt-free Christmas.
CASH ONLY BUDGET
We recommend only using cash for Christmas presents, decorations, travel, and food. Look at your savings and decide how much you can afford to spend. Some families save all year long for Christmas, while other families put extra money aside when they have it. Do what works for you.
We start thinking about Christmas savings in the Fall. We usually have a 1-minute conversation about how much we want to spend. We put money aside in a separate savings account just for gifts.
If money is tight, consider working an extra job or two. You could also cut back in one area of your household budget to save for Christmas. It is really is amazing how much you can save when you set your mind to it! Take a good look at how much you are spending on food, eating out, Target runs, or Amazon purchases. Could you cut back in one or two of those areas to save for Christmas? Be creative.
Next, create a Christmas budget. You download our Christmas budget for FREE.
Print one out and use it! Decide ahead of time how much you'll need to spend on decorations, meals out, gifts, parties, cards, and travel. Write it all down in your budget. The sooner you get this done the better!
COLLECT MOMENTS NOT THINGS
Our family motto is "Collect moments not things." Christmas is an excellent time to walk out this motto in our life. We constantly remind our family, it is not about what we buy each other but the memories we make with one another.
Over the years, we have gotten really creative when it comes to celebrating Christmas for next to nothing! Our kids make special handmade gifts for one another. We make homemade ornaments and spend time making cookies. We serve together at our local food bank. We drink homemade hot cocoa and watch movies. We look for free activities in our community and do those things together.
We have made it clear to our kids (and ourselves) that we want to remember the TIME we spent together, not all the junk we bought them. Our time is the most precious asset we can give our family during this holiday season. Collect moments not things.
STREAMLINE KIDS GIFTS
I think gift giving for kids is out of control. I said it. Some people may disagree with me, but we have never purchased endless amounts of Christmas gifts for our kids.
Over the years, we have developed a simple gift giving formula for our kids.
Something you want.
Something you need.
Something to wear.
Something to read.
We typically get each of our kids 4 gifts each and each gift falls into one of the categories above. I know some families go even further than this and only get each child one gift. I love this too!
I know of families who give each child three gifts. Each gift is a reminder of the three gifts the Wiseman gave Jesus at his birth!
The secret to a debt-free holiday to only purchase gifts for you kids you can afford. If you have the cash to pay for and it is in your budget, buy it for them! Don't fall into the trap of buying things for your kids you can't afford. It is a slippery slope. It is not good for them in the long run and it's not good for you either.
If your budget is tight, get creative! Don't over purchase gifts for your kids out of guilt. Stay within budget and focus on TIME WITH THEM. Brainstorm with them all the ways you could spend time together this holiday season. Focus on the positive.
SET A TIME. GET IT DONE.
Once you set your cash budget and know what to get each person on your list. Go shopping! Get it done today.
I have found that when I procrastinate my Christmas shopping, I always go off budget. I get to the store and am tempted to buy more. Suddenly I feel guilty that I am not getting my kids MORE things. I stress that my decor is lacking. I go over budget.
The easiest way to overcome the pressure to over spend during the holidays is to purchase your gifts early. Get online and shop. Take one morning or afternoon and buy all your gifts. Don't give yourself the opportunity to walk into the store at the last minute. GET IT DONE.
Not only does this keep you on budget, it gives you more time with your family and friends. It gives you more time to do the important things this Christmas season.
Let's use this Christmas season to live on purpose with your family. Let's leave the guilt behind and focus on quality time, serving others, and making memories. These are the things that really matter to your family.
The truth is, when we aren't worried about how we are going to pay for Christmas, we can really enjoy the season. We can be at peace with ourselves and others. Don't compare yourself to someone else. Enjoy this journey!
What are your best tips for a debt-free Christmas? We'd love to know!