How to plan for a debt free Christmas

Christmas budgetChristmas is always such an overwhelmingly expensive time of year.  Wouldn’t it be nice to have a debt free Christmas each year?  It can happen, I promise. But only if you plan well in advance.

So if having zero Christmas credit card hangover is on your next years to do list, read on.

So when is the right time to start planning your Christmas spending for 2020? NOW.  Yep, that’s right, on December 31st I start planning for next years Christmas.

Now before you think I have totally lost my marbles, let me explain why, and how.

Well the why is relatively easy. There is nothing worse than eating, drinking and shopping yourself silly in December only to wake up in January to a stupidly high credit card bill. One that you can’t afford to pay off. One that will cost you hundreds more dollars in interest and one that you will still be paying off months after the fact.  Talk about depressing. And usually we don’t have much to show for it except a booze hangover, a few extra kilos and about 67 family arguments to boot.  So for me, planning Christmas early means I don’t have to encounter any of those things (well, as little as possible).  But the big kicker is no debt.  No credit cards are harmed in my Christmas budgeting routine.

The how is a little bit more methodical.  It takes planning and being really strict with yourself. I now avoid the hype of Christmas and realise that on Boxing day I don’t need to go to the shops just because things are on sale.  Things are not a bargain if you don’t need those things to begin with.

So here are my top 5 tips to plan for a debt free Christmas:

1. Make a list and set a dollar limit per person.  Not the naughty or nice kind of list.  But make a list today of all the people you would like to buy presents for.  Then next to each persons name, write down a dollar amount for how much you will spend on them.  This gives you the amount of money you will need to save so that you don’t need to use your credit card. Often this number is overwhelming (depending on the size of your family).  And thinking about this on December 1st will most likely give you a heart attack if you haven’t planned in advance.  We always need to know our starting point. Always. We also need to stick to that budget. Buying extra things above that budget means any savings plan we create is already out of whack.

2. Would a Kris Kringle work for your family? Often, once you have written down the list of people you need to buy for, you are reaching for the Christmas champagne as the list is often stupidly long. Now I know you can’t control all the relatives in your family circle, however, instead of buying presents for all the long lost aunts and uncles and cousins, ask yourself if doing a family Kris Kringle (or Secret Santa) would work for you.  This may not reduce the overall spend by much, as instead of buying lots of smaller dollar value gifts, you could buy one person a higher price item, but it does reduce your Christmas workload.  And perhaps save some sanity along the way.

3. Work out a weekly savings plan.  I know – the boring part, but seriously it will save your sanity.  So for example, once I made my list and created a spend amount per person I might get a total of $1425.  I then divide that amount by 48 weeks. Now I know the year has 52 weeks, but I want to get all my shopping done and dusted by the 1st of December each year. So I only have 48 weeks from today to do that.  That would roughly work out to be $29.68 per week that I have to put aside. If you don’t have a separate savings account to transfer that money too, I would suggest opening a new bank account. There are multiple options with no fees to choose from.  But keeping it in your everyday spending account will mean one thing. You will spend it well before Christmas comes and you won’t spend it on Christmas things.

4. Food and decorations – Griswold style. It is surprising how quickly the cost of Christmas food and decorations add up.  This is not part of my weekly savings plan, so I deal with this separately.  For the 3 months leading up to Christmas, each time I do my weekly food shop, I allow myself to buy one thing Christmas related.  So it could be serviettes, bon bons, a box of chocolates, custard, shortbread.  Depending on the item it should only increase my weekly food spend by $5-$10 so I really don’t notice too much of a difference.  These all get put in a box in the spare room so there is no chance we will eat/use those items before Christmas.  If I was to do a Christmas shop the week before Christmas I run the risk of these things being out of stock, or me having to have an extra $200 to cover such a big shop.  One item a week for 12 weeks and I don’t even notice the additional cost.

5. Christmas in the park.  One of the best things we decided to do years ago, was have a Christmas in the park in November.  This was for all the aunts, uncles, cousins, partners, kids, dogs – whoever we don’t normally see on Christmas day.  We don’t do any presents/gifts (hello debt free Christmas). Instead, we all bring some food and snacks to share and we sit around and catch up. You know, actually talk to each other. We play a few games of soccer or footy or whatever the latest game is, we wear daggy Christmas t-shirts, and there is no stress.  There is no pressure to dress up, no pressure to spend money, no need to do anything we don’t want to do.  We come and go as we please, and it is the best day ever. And we do it in November as we know December is just too manic for everyone and we don’t want to add any stress.

“One of the biggest things I have learnt over the years, is people need to stop buying things they don’t need to impress people they don’t care about.”

Harsh?  Well you could say that, but often what we see at Christmas is people buying things for people they see once a year.  They then resent the amount they have spent as the gift they have gotten in return might be shit. Go on admit it, we have all had those feelings.  So here is the thing, don’t get caught up in the Christmas hype of buying things you don’t need, or that others don’t need. Christmas is not about presents.  It is not about who has the biggest pockets. It is about spending quality time with whoever you choose to spend it with.

By having my Christmas shopping done before December hits, I don’t get caught up in sales, or specials, or clever marketing tactics. Everyone on my list has a gift. I have stuck to my budget and I can spend December relaxing and not running around like a headless chicken.

Christmas is always such an interesting time of year.  People often head in to the festive season yearning for a break from work, a rest, a relax. Yet often they are the most stressed (both emotionally and financially) they have been all year.  The extra pressure we put on ourselves during the lead up to Christmas is just crazy, so I simply refuse to do it.  I would rather have a boring and sensible weekly savings plan than face a January credit card hangover any day.



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