Debt-Free Christmas

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Are you tired of having Christmas credit card payments haunting you for months, or even years after? Do you find yourself stressed out wondering if you have enough money to buy gifts and attend all of those Christmas parties? Are you so stressed about your finances that you have a hard time enjoying the holidays? If you answered yes to any of these questions, then you need a Debt-Free Christmas plan.

I have the perfect plan for you too. My debt-free Christmas plan has only 7 easy steps. This debt-free Christmas plan is the same exact method I’ve used every single year since 2016. During three of those holiday seasons, my family was attacking debt, $72,000 to be exact. So, I know this plan will work for those of you on a tight budget. Using your credit card for holiday gifts will be a thing of the past. With a little bit of planning, you will enjoy a debt-free Christmas too!

What is a debt-free Christmas?

In its simplest form, a debt-free Christmas happens when you’re able to pay with cash for all of the holiday’s expenses. No credit cards, personal loans, or cash advances used. Instead of relying on debt to pay for gifts, meals, decorations, and holiday events, you’ll pay with cash that you saved up just for Christmas.

Why plan for a debt-free Christmas?

In 2019, the average American spent $942 on Christmas gifts alone, according to the World Economic Forum. Just a year earlier in 2018, CNBC reported that the average American racked up an average of $1,054. Most families don’t even track how much they’ve spent. I totally get it. Getting caught up in the holiday frenzy, losing track of how much you’re spending, and using your credit card has become a rite of passage, but it doesn’t have to be. After all, who wants piles of credit card debt months or years after? I know I certainly don’t, but I must admit, I used to approach Christmas haphazardly too. And let me tell you, there is an easier way.

If you’re ready to click out of this blog since you don’t think there’s any way you can survive Christmas without your credit card, please stick around. I know what you’re thinking. You’ll pay for Christmas over time, spreading out the payments. What’s the harm in that, you ask? Just remember that this convenience is not free. You’ll pay more in the long run in the form of interest payments. Why not just plan, save, and buy what you can afford?

Planning for a debt-free Christmas will bring back the joy you used to have for the holidays. Stressing over how you’ll pay for gifts, dinners, holiday potlucks, school events, and fun holiday trips will be a thing of the past. Stop worrying about juggling your bills around so you have money for Christmas. This debt-free Christmas plan will reel you back to reality when you want to overspend, go overboard on decorations, splurge on extravagant gifts, or holiday trips.

The best part of it all is that I’ll walk you through the very same 7 steps I use each year. Download your free Debt-Free Christmas plan to follow along. Enter your information in the box below to get yours now. I guarantee that this will be a game-changer for you.

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    #1 Figure out how much you can save by Christmas

    First of all, let’s figure out how much you can save by Christmas, even if you’re reading this in December. If you can’t estimate how much you can save for Christmas, you’ll be in the same situation you’re in now, unprepared and strapped for cash when Christmas rolls around. This is the honest truth. If you’re not willing to save the money now, the cash won’t instantly appear unless you hit the lottery or land a great promotion from now till Christmas. But why risk it? Be proactive. Accept the fact that you need to take action now and sit down and take this step seriously.  

    Most of us skip this step. It’s the #1 reason why most families overspend and resort to credit cards. They don’t think ahead, plan, and save for Christmas. If you don’t make this a priority, I’m sorry to break it to you, but the money won’t magically appear in your bank account. Look at your budget and carve out a monthly amount that you can save for Christmas. Cut back where you can like eating out, personal spending, or entertainment.

    For cost-saving ideas, here are some great blog posts on saving money: Things I Stopped Buying to Become Debt-Free, Kitchen Gadgets that Save Money, How to Cut Expenses during an Emergency

    #2 Adjust your expectations to the amount you can save

    Before you start planning your debt-free Christmas budget, compare your expectations to the amount you can save from step #1. Don’t skip this step! I know this part may be uncomfortable and eye-opening for some of you. The amount you can save may not match your grand holiday plans, but don’t be discouraged. This step is crucial. Skipping it will lead to frustration later when you start figuring out your budget.

    Changing your expectations is what really separates those who go into debt and those who survive Christmas debt-free. Face reality and be honest with yourself. Is the amount from step #1 enough? If not, then adjust your expectations to what you can afford. This is how you’ll survive Christmas debt-free, and what I’ve done for the past few years.

    If you have a shoe-string budget with “champagne wishes and caviar dreams”, then take a breath, step back and align your expectations to what you can save. Don’t worry! In step #3, you’ll learn some cost-saving strategies. You’ll choose the ones that you can realistically implement.

    Accepting what you can afford is the most responsible action you can take. Embracing this step will change your mindset and will help you approach the holidays differently. Instantly, you’ll find yourself coming up with creative and resourceful ways to save money. Your spending habits will change and you’ll find new ways to save that you wouldn’t have dreamed up before.

    A debt-filled Christmas stops now! Pledge to yourself that you will make the commitment to align your holiday expectation to what you can afford. I promise you that this change is needed. The magic in this step will help you create an action plan that will actually have you survive Christmas debt-free.

    #3 Choose strategies that save money

    Step #3 is where you’ll choose strategies that will save you money this Christmas. By thinking about these now, you’ll be able to set up a realistic budget in the next step. Here are some great ideas:

    Host potlucks or ask for help with holiday meals

    If you host Christmas dinner, ask family or friends to pitch in by bringing a dish, drinks, or desserts. Most likely, they’ve asked you in the past. Now is the time to take them up on their offer. 

    Suggest white elephant exchanges

    This is a wonderful way to celebrate Christmas with friends. Ask everyone to bring a wrapped fun or impractical gift that they’re no longer using. Each person takes a turn and picks a gift from the pile of wrapped gifts or steals a gift that’s already been opened. The game ends when everyone has a gift.  These are so much fun! You’ll be surprised at what people will steal!

    Suggest gift exchanges and set a minimum and maximum limit

    Use gift exchanges to cut back on the number of gifts you have to buy. The trick is to set a minimum and maximum limit. Use the free gift exchange app, Elfster, which will help draw names electronically.

    Don’t be embarrassed. Your loved ones won’t mind if you need to scale back. Some may even be relieved. Think of it this way, would you rather be honest now or face a mountain of debt later?

    Cut out decoration purchases

    Use what you have. Purchase decorations next year when you have more time to save for them.

    Limit holiday events or find free or frugal things to do

    Save money by choosing one event, or find free or frugal events. Most likely, your family won’t even notice. 

    #4 Create your Debt-Free Christmas Budget

    Start planning your Christmas budget. Plan out your gifts, meals, events, and finally, your decoration budget. Remember to keep your expectations from step #2 and your cost savings strategies from step #3 in mind. Make sure to fill this out with a pencil or an erasable pen. You may need to make adjustments to your budget later.

    Gift Budget

    Gifts will probably be the most expensive budget item, so make sure that you spend the most time on it. Keep your expectations in mind. If you have a small Christmas budget, include only the family and friends that matter the most to you. Don’t forget to include gift wrapping supplies too. Use the gift wrap checklist from the free printable worksheets. It’s so easy to go overboard on gift-wrapping. Check your gift-wrapping stash, and only buy what you need.

    Meal Budget

    Estimate your meal budget next. This is another area that most people forget about. You can easily bust your budget if you forget to include holiday meals, baking, and special events that you love to do each year. Include holiday meals, work potlucks, family dinners, and any other special meals. Don’t get caught off guard! Budget it all in.

    Use the Debt-Free Christmas meal planning worksheet to estimate each meal or potluck. There’s a handy grocery list that will help you factor in all of the costs for all of the ingredients. The great thing is that you can use this list to start shopping now for non-perishable items that you can find on sale now. You can also use this worksheet to figure out what dish or dessert you’ll ask family or friends to bring.

    Event Budget

    I love the holidays! There are so many fun events like ice-skating, holiday light tours, Christmas festivals, and my all-time favorite, spending a day at Disney. The list is endless. It’s easy to get carried away and lose track of how much all of these festivities are costing you. Make a plan now and factor in all of the costs. Snacks, souvenirs, tickets, and admission add up fast. If ice-skating is on your list, don’t just estimate the rental fee. Add in all of the fun snacks and hot cocoa you know you’ll want to have too. Remember the point of surviving debt-free is to create a plan and actually save up for it.

    Decoration Budget

    Decorations are a sneaky expense too. If you love decorating, budget it in too. When you have a budget, you won’t be easily tempted to buy the new holiday decorating themes each year. Plus, you’ll be able to look for deals early on instead of paying full-price for them.

    #5 Match your budget to how much you can save

    Add up your gift, meal, event, and decoration budget. Is this more than the amount that you can save by Christmas? If you’re over, go back and make adjustments. Cut out where you can. The goal is to create a budget that matches how much money you can save by Christmas. Review step #2 and make sure that you’ve accounted for some of these savings in your budget.

    Here are some other tips:

    • Cut down your gift list and send cards instead.  
    • Make some of your gifts. Put your talents to good use if you’re a great baker or super crafty. Just do the math first. Add up the costs and make sure it’s cheaper than buying a gift instead.
    • Give group family gifts instead of individually buying a gift for each family member.
    • Give gift cards and set the limit per person. I personally love gift cards, even though some may consider them impersonal. Just make sure to give gift cards that you know they’ll use.
    • Cut out some dishes from your holiday meals. I used to love cooking huge, extravagant holiday meals with all the fixings. I stopped cooking some dishes, and no one even noticed.  
    • Decline holiday meals and events if you can’t afford it. Some may not be optional, but there might be a few you can pass on. Believe me, you’re probably worrying about it more than you should. Just politely decline and mention that you’re looking forward to next year’s celebration.
    • Lower your kid’s expectations. We often think that our kids won’t be happy if they don’t get everything on their list. Calmly explain the situation. Just keep your kid’s age in mind.
    • Cut out gift-giving with your spouse. We did this during our first Christmas on our debt-free journey back in 2016. Of course, at that time, we didn’t have any money saved. It was the first debt-free Christmas that we planned together, but it was well worth it looking back at it now.
    • Purchase gifts for immediate family only. 
    • Find extra ways to make money. Sell items or get a part-time job.

    #6 Start saving now

    Don’t hesitate! Start saving now. Set up a Christmas saving fund, and automate your monthly savings. Once you set it, you’ll be surprised at how fast the money will pile up and you’ll adjust to the budget changes quickly. You probably won’t even notice it either. The earlier you start the less you’ll have to save each month.

    #7 Stick to your Debt-Free Christmas Budget

    The magic to all of this, and possibly the hardest, is sticking to the plan. I promise you, though, that it gets easier. The mere fact that you have a plan and a budget in place will guide your spending decisions. When you’re tempted to go over budget, revisit your plan. Just remember all the effort that you put into your debt-free Christmas plan. You’re on this plan because you want to survive Christmas debt-free. You want to stop reaching for your credit card. You took the time to figure out how much you could save, set your expectations, created money-saving solutions, created a budget, and actually saved up for Christmas. Don’t let all of your hard work go to waste on a whim.

    You’ll enjoy Christmas more when you’re not stressing out about money. And let me tell you, it’s the greatest feeling ever. These last few debt-free holidays have been the most stress-free holidays of my life. Now, holiday shopping is something that I actually look forward to. Now that I save every month for Christmas, you won’t find me overwhelmed, stressed out, and rushing around town at the last minute. When I didn’t plan for Christmas, I dreaded it. I convinced myself that the holidays would suck since I didn’t have enough money to celebrate the way I wanted to. Those feelings are long gone! Thanks to this debt-free Christmas strategy.

    Here are some easy tips to stick to your budget:

    3 Common Myths of a Debt-Free Christmas

    Myth #1: A debt-free Christmas will make me look like a cheapskate.

    It’s possible to create a memorable Christmas on a budget. The trick is knowing how to score a great bargain. Resist the temptation of buying the cheapest gift or decoration. Yes, it takes time and a little bit of patience, but it’s possible if you’re willing to put in the effort. Start planning and saving early. Think how great it will be when you already have the money saved when you find a great deal.

    Myth #2: A debt-free Christmas will be boring.

    Extravagant Christmas family outings are fun. I won’t lie. Who doesn’t love spending the day at Disney during Christmas? But remember, creating fun, lasting family memories doesn’t mean you have to spend a fortune. Free events can be just as fun too. We love hopping in the car and admiring the decorated houses around our city. We still do this, even though we’re debt-free.

    Start actively searching for coupons or deals. Why pay more for ice skating if you can score a deal on sites like Groupon? Check local events for discounts too. You might qualify for a discount or free admission based on your line of work, club association, or just simply visiting at a slower time or day of the week.

    Myth #3: A debt-free Christmas is hard to do.

    A debt-free Christmas does take some planning, but it’s not hard to do. First of all, follow the 7 steps and don’t skip around. Before you do anything, download your free Debt-Free Christmas Plan. Making the commitment and sticking to it is how the magic happens. And remember this, the work that you put in now will save you the headache of paying for Christmas months or years later. Overspending and struggling to pay for it later is much harder than just creating a plan, sticking to it, and paying cash for it.

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      Final Thoughts on a Debt-Free Christmas

      These 7 easy steps to a debt-free Christmas is the same exact plan I’ve used for the past few years. Just think how great you’ll feel starting the new year without credit card statements haunting you. Follow these 7 easy steps. First, figure out how much you can save, then, set your expectations, and choose cost-savings strategies. You’ll set a realistic budget, match your budget to how much you can save, start saving, and actually stick to the plan. Above all else, you’ll survive Christmas without owing a single cent to anyone. Imagine yourself kicking back, sipping on hot cocoa, and enjoying the holidays without worrying about how you’ll pay for it. Everything is under control! Finally, a plan that works! Don’t wait! Start now! If you haven’t signed up to get your free Debt-Free Christmas plan yet, fill in the box above! 

      Please share your comments below. I would love to hear how you plan on celebrating a debt-free Christmas. If you loved this post, don’t forget to share and pin this post on your Pinterest board.

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