How to Have a Debt-Free Christmas – The 6 easy steps to take to stay on budget and not go into debt for the holidays.
‘Tis the season… for tons of spending. (Falalalalalalalala)
There’s no way around it. But when you’re on a tight budget during a season of materialism, it’s really hard to stay the course and keep your wallet in check. Most importantly, it’s almost impossible to have a debt-free Christmas… or so you might think!
It’s NOT impossible to have a debt-free Christmas.
My family does this every year without feeling like we’re neglecting each other or living under a rock.
What you can do BEFORE Christmas to make sure that you have a debt-free Christmas
3-12 months ahead of time: Start saving up.
Plan your Christmas spending a year ahead of time because it means that you have that much longer to save up. Think about it like this: if you want to save $1,000 for Christmas, if you have 12 months to save up, that means you just need $83 per month to save. In just 6 months, you would need to save up $166 per month in order to save that up.
Planning ahead makes a huge difference.
3-1 month ahead of time: Make a budget and make a wish list.
In our house, we stick to a budget of $100 per person in our immediate family. So that means that we need to save $600 for Christmas day itself.
But there’s also the extra traveling, other family gifts, extra food, and more. We usually add an extra $400 to the total for the spending.
From there, we fill in our kids’ wish lists as well as our own. This way, we can plan ahead for coupons, where to shop, and what we’ve already gotten.
The month of Christmas: Stick to the budget!
There’s really only ONE thing you have to do in the month of December… stick to the budget! That’s all you’ve got to do.
No saying “the kids decided that they really wanted a $400 iPad for Christmas,” no “but I only bought Bobby $34 of stuff, but Jenny got $47, we have to even that out.”
If the $100 (or whatever you decide it is) is spent, then that’s that.
OK – Now let’s get into the nitty-gritty about the ways that you can spend less and really stay on track with your spending to stay out of debt this Christmas holiday season.
Here’s how we have a debt-free Christmas with a large family.
1. Buy toys from the consignment store.
If you only have $100 to spend per person at Christmas, check out your local kids’ consignment store. They are full of great, quality toys for more than 50% off the store price. Almost every toy that we get comes from a consignment store for a number of reasons.
- Obviously, it’s cheaper.
- I don’t have to spend an hour trying to figure out how to get the dadgum thing out of the packaging!
The kids have no frame of reference about whether or not it has a box or came from a store. All they care about is that they can play with it.
2. Look for used or factory refurbished electronics.
If you have a child who wants a new Xbox or a new iPad, don’t run to the nearest Apple store or Walmart. Check out GameStop first. They sell great refurbished game systems for a great discount. Plus, they come with a one year warranty. If for some reason the new-to-you Xbox doesn’t work right, just return it and they’ll give you another new one.
Plus, they come with an amazing one year warranty. If for some reason the new-to-you Xbox doesn’t work right, just return it and they’ll give you another new one.
Apple’s factory refurbished iPads are basically brand new. They take incredible care in making sure that any of their products (not limited just to iPads) are in stellar condition before you get them. It’s a great way to save a lot of money and still get a high-quality product. (Plus, if you have Rakuten, you get a nice percentage of cash back when you buy!)
3. Shop for gifts with cash.
We set a strict price limit for spending for each member of our family. Each person has an envelope with that amount of money in it, and every time someone buys a gift for that person, it comes from that envelope.
My husband and I have a $100 each spending limit. So when I go out to buy his gift, I take the envelope with me. I can’t spend anything more than that amount because it’s all that I have in the envelope. If gifts were bought online, that amount is still reflected on the outside of the envelope.
4. Invest in experiences instead of gifts.
A few weeks ago, I read a post (I can’t remember where) about how this woman’s children were so excited for their gifts on Christmas morning, and then they didn’t get played with ever again. That really struck a chord with me.
What does my son talk about most? The places we went, the things we did, the people we saw. Not his toys. My mind was blown by this realization.
So this year, we’re not going to get our kids toys.
They’ve got overflowing toy bins as it is! This year, we’re spending our Christmas money on things like memberships to our local zoo, visiting family, and having adventures that (we hope) they’ll remember fondly for a long time.
Their big-ticket gifts are going to be football jerseys from eBay that they’ll be able to wear for at least 2 years (and then they’ll get passed on to the next younger brother). This, admittedly, might sound extravagant, but we’re crazy football fans here, and our boys have picked up on that energy. Plus, at eBay we get the factory seconds that have a missing stitch somewhere in the hem (that I still can’t find) for $12 each.
5. Set a max limit for the budget and stick to it!
Tough love here, but this is for your own good. If money is tight and you really can’t get into more debt or get more stuff, then set a low budget and stick to it.
Make your budget something that still lets you get something nice for each member of your family, but once they hit their max, they don’t get any more gifts.
Let’s say my max budget is $100 per person in my family. That’s still $500 to spend in total, which, to me, is a lot of money. So we have a hard limit of $100. Under no circumstances are we to exceed $100 per person.
My husband wanted a PS4, and that maxed out his Christmas budget (bought it from a friend… we got lucky with that one), so he doesn’t get anything else. My oldest son wanted a Razon Scooter and that gave me an extra $30 to buy him a cool helmet and some small plastic army men to go along with it. My youngest 2 are young enough that Dollar Store water guns and a new stuffed animal are still the highlights of their lives, so I won’t even need to meet their limit of $100 per person.
6. Make family Christmas parties and work parties a no-buy occasion.
I don’t know about you, but we have at least 4 different family Christmas parties to go to (excluding any parties for work or friends)! Gifts for Pollyannas and keeping track of everyone who you are supposed to get gifts for is stressful and really expensive!
Imagine if for each party there was a $20 limit per person. That might not seem like much right off the bat, but some quick math turns that “small” $20 into $40+ per party. For 4 parties, you’re looking at $160 at least!
Which is why I always talk my family into doing no-spend gift exchanges.
This is a win-win-win for everyone: win for the giver (getting rid of stuff at home) – win for the wallet (saving money) – win for the receiver (getting a fun gift).
Have you heard of White Elephant games? I’m sure that they have different names all over the place, but the general idea is that everyone brings a random present from home that they didn’t buy, then numbers are drawn and gits are opened. You can “steal” someone else’s gift if you want to as it goes on, and it’s a lot of fun.
Half of the fun of this is seeing what kind of stuff gets brought from home and wrapped! Plus, it’s a great way to re-gift that fruitcake from the last Christmas party (just make sure that it wasn’t this side of the family who gave it to you 😉 You’re welcome!).
It is possible to have a debt-free Christmas. But it requires a lot of self-control and learning to say “no” when you need to.
Make more money before Christmas:
- 30+ Real Ways to Earn Money From Home
- How I Earn Money as a Stay-at-Home Mom
- Make a Full Time Income From Home Proofreading
- 7 Survey Sites that Are Actually Worth It
- Secret Shopping from Home
- Make $40,000 per Year From Home as a Bookkeeper
Ways to save money when you shop:
- 5 Ways to Save Money Going Out With Friends
- Never Pay Full Price at Restaurants
- Best Money Saving Apps You Need
- Save Money When You Can’t Afford It
- Money Saving Tips That Helped Us Save $21,972 Every Year!
- 7 Ways to Still Date Your Spouse When Money is Tight
- How to Start a Budget the Easy Painless Way
- Money Saving Websites That Thrifty People Love
- Save Money When You Live Paycheck-to-Paycheck
What are your favorite Christmas traditions?
Get the FREE Money Saving Calendar!
Money troubles got you down? Don't know where to start to fix it?! Constantly overwhelmed by money!??!?
Get daily tips to fix your finances in less than 10 minutes each day!