White ceramic house with three pine trees sitting on top of a table

Christmas on a Budget: 5 tips for a debt-free holiday

The holiday season is sneaking up on us. Before you know it, Christmas will be knocking at your door.

I just love Christmas! Something about all the lights, presents, and listening to Christmas music on the radio gets me feeling all warm and fuzzy!

Although I love Christmas, I hate like how expensive it is. If you’re like most people then it’s probably one of the most expensive times of the year.

Ornaments on a Christmas tree with text overlay have yourself a merry debt-free Christmas

According to a Gallup poll last November, Americans planned to spend an average of $862 on Christmas in 2017. That sounds about right. And if you have a really big family like me, then you’re probably going to spend even more than that.

You might think it’s almost impossible to stay debt-free during the holidays. But with a little more work and thought, it’s completely possible!

These 5 tips have helped my Christmas budget stay in check so we could have a debt-free Christmas.

Stick to your budget

Nothing kills the holiday spirit like debt. And you don’t want to start off the New Year in debt!

So first things first, if you don’t have a budget, it’s the perfect time to create one. Don't know how to start? Check out our beginners guide to budgeting.

Go ahead and sit down with a giant cup of hot chocolate, list out all of your normal expenses (this doesn’t include holiday expenses yet), and figure out how much is leftover. You can find this number by subtracting your expenses from your income.

Your Christmas budget should be equal to or less than what you have leftover at the end of the month unless you’ve been able to save up for a couple of months. That’s your magic number.

If the amount you want to spend at Christmas is higher than what you can afford, then it’s time to figure out an emergency plan of action that’ll get you in the positives before Christmas.

A few different things you can do to get yourself in the green is to go on a spending freeze, make some extra money on the side, or get extra creative with gifts. Maybe even a combination of all three.

Next, make a list of all the expenses you’ll incur over the holidays. This includes but isn’t limited to buying gifts, having company over, traveling, going out with friends, and any other possible thing that’ll cost you money.

A few things to keep in mind:

  • Set a budget of what you’re able to afford, NOT what you want to afford (Remember the magic number?)
  • Prioritize what’s important and make adjustments to your budget in order to make it work (you may even need to make some cuts in some areas)
  • Do NOT under any circumstance spend more than your budget!

Stack of printed fabric with scissors laying on top

Get extra creative with your gifts

I’m really lucky to have such a big close-knit family! Our normal family get-togethers are as big as some people’s family reunions.

The one not so great thing about having such a huge family is that my Christmas shopping list starts out with over 30 people to buy for just on my mom’s side of the family alone!

Add in my husband’s side of the family, a few close friends, and all the fur babies in the fam and now my list is closer to 50!

You can see why it’s challenging for me to spend less on gifts.

Don’t get me wrong, every year I look forward to giving gifts to all my special peeps. But in the middle of it all, I forget that my friends and family aren’t expecting some extravagant or expensive gift from me. They simply appreciate the thought and gesture.

So try to keep that in mind as you’re creating your Christmas list. You don’t need to spend a lot of money to show your loved ones that you care.

Instead, put some extra thought into what you’re giving. Be creative and think outside the box. Pinterest is my BFF when it comes to getting ideas for things like this.

If you’re a little crafty, try to DIY some of your own gifts. But be mindful of the final cost of DIY projects. Surprisingly, they can be even more expensive than just buying a gift.

I plan to make a few DIY gifts myself this year. Wish me luck!

Use cash money

If you are even remotely tempted to spend over your budget or have a bad track record of going over budget around the holidays, start using cash now!

Credit cards are awesome for the people who can use them responsibly and pay off the balances every month, but if that’s not you, step away from the card!

I love all of the rewards and points I earn from using my credit cards. But all of those rewards are meaningless if I’m paying crazy high interest on everything I buy.

So if you think you have the slightest chance of going over budget, whip out the envelopes and label them for each category of spending. When you’re out of money, you’re out of money. Easy as that. End of story.

Department store window with sale written on it

Shop the sales and never pay full price

Tis’ the season for sales. Lots and lots of sales! So don’t buy anything unless it’s at a discount! Paying full price is for suckers!

Personally, I like to shop all the online sales sitting in the comfort of my own home. I’m able to take my time and compare prices to ensure that I’m getting the best prices. All without fighting traffic and the crowd.

If you’re using the cash envelope system, remember to take out the cash from the envelopes immediately after purchasing something online.

In addition to shopping the sales, you can save even more by using discounted gift cards from Raise and earning up to 25% cash back from Ebates!

Need more tips on how to save more while shopping? Check out our shopping guide here.

Don’t be afraid to say no (thank you)

As fun as the holidays are, they will keep you busy and sometimes broke! It’s literally go go go from Thanksgiving to the New Year.

If you’ve been spending more than you planned, take a step back and review your budget and your schedule.

Can you afford to go to all of the gift exchanges, dinners, and parties? If not, don’t be afraid to skip a few.

You shouldn’t feel ashamed or obligated to go to things when your wallet is telling you that you can’t afford it.

Prioritize what’s important to you and skip the rest. Remember that the holidays are special because of the people you get to spend it with and not the number of gifts you give and receive.

What are you doing to have a debt-free holiday?

Have a debt-free Christmas this year by doing these 5 simple things. Enjoy Christmas without the debt! #christmasonabudget #debtfreechristmas

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