This Christmas will be our family’s sixth debt-free Christmas. Which means, that all of our Christmas presents, charity donations, and holiday food, will be purchased with cash – no credit cards, heck we don’t even have one to use if we wanted to.
Our Christmases tend to look a little bit different from the ones I see all over Instagram and Facebook on Christmas morning. Our thirty-year-old fake Christmas tree won’t have presents pile up reaching the ceiling and our holiday meals won’t consist of elaborate hors d’oeuvres and beautifully decorated tablespaces.
The reason is simple. We don’t have that kind of cash and honestly, even if we did I can name 37 other things that I’d rather use it for. Once we stopped spending so much on Christmas every year, our Christmases became happier, more fulfilled and more joyful. Without having to worry over how we were going to recover from the financial hangover brought on by overspending in January, we can now enjoy our holidays together.
And the best part is, we tend to stay more focused on the true reason behind the season and why it is we even celebrate Christmas in the first place. We focus less on how much we can buy with our credit limit and more on how to bring our children closer to Jesus on His birthday.
Our first debt-free Christmas, I spent crying on the floor because our Christmas morning with very few gifts looked pitiful in comparison to those Instagram pictures of presents piled high around the tree. I found myself lost in the comparison trap, wishing I had abandoned our debt-free journey just that once.
But the reality is simple, by sticking to our debt-free journey I was unable to overspend on Christmas because, in order to purchase our Christmas presents, I had to have the cash on hand to do so. I couldn’t just call our credit card company and request a credit line increase.
So, how do you make a debt-free Christmas possible, year after year?
Budget
The first step to managing your money, whether it is for Christmas or just day-to-day stuff, is to budget your money. Without a budget, you have no idea where your money is going and where you want your money to go. Every year, I make a Christmas budget specifically for the money we have set aside to pay for Christmas that year.
For example, if we plan to spend $300 total on Christmas this year, our budget would like similar to this:
Presents: $200
Food: $50
Donations: $25
Wrapping Paper/Décor: $25
Now, I know that’s a super simple example, but you get the idea. One of the easiest ways to make budgeting easier during the holidays is to set up your budget early – like now if you haven’t already. And if you’re married to a budget-adverse person like I am, you may want to use a budgeting software program that makes it easier to “visualize” your budget and check-in with your budget on the go.
For instance, to keep my husband in check on where we are at with the Christmas budget, we use Personal Capital (it’s free). The great thing about using Personal Capital is that my hubs can use the app on his phone to see what he can and cannot spend from our Christmas budget.
P.S. Have you signed up for our Debt-Free Christmas Challenge yet? If not, sign up here to join 5,000 other amazing debt-freeers! Oh, and did I mention the challenge is free?
Extra Spending Money
Now, after you create your budget, you may realize that you don’t have a lot of cash to spend on Christmas. This is where temptation will hit you and you’ll be tempted to spend money you don’t have on Christmas. I’m a huge fan of working side hustles to earn extra spending cash for the holidays.
For example, I’ve been using Swagbucks all year long so we could afford to pay for all of Christmas this year without coming out of our one income budget. However, earning extra money outside of your budget isn’t the only way to generate extra spending money. If you take the time to sit down with your monthly budget now, you can rework your budget and potentially find areas that you can do without for the next month in order to make more spending room for Christmas.
Save and Save Some More
I know Christmas is right around the corner, but let’s be honest, Christmas is on December 25th of every single year. It never changes – so why don’t we save all year long for Christmas in order to pay in cash for our Christmases and avoid sinking into debt for it?
For instance, if you put it in your budget to start setting aside $10 every week starting with the first week in January, you’d have roughly $500 by Christmas Day to spend on Christmas without going into debt.
Living the debt-free life and having a debt-free Christmas is possible. It won’t always be easy, but I can attest to it being one of the best gifts you can give yourself and your family.
Is your family having a debt-free Christmas this year? If so, what helpful advice can you offer for making it a reality?
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Liz S says
Jessi, I think you might have forgotten to add a “5” under your amount you are Donating. It reads $2, but I think you meant to write $25 🙂 Please delete this comment…I’m gonna write another (real) one right now…Sorry, but just thought you might want to know!
Jessi Fearon says
Hahahhahhaha! Thank you Liz! 🙂
Liz S says
I love this post!!! I can’t imagine ever NOT having a debt-free Christmas. I can honestly say I’ve always used cash to pay for Christmas, but it is because I plan ahead…like 12 months ahead. 🙂 I either save monthly or I use one of my husband’s 2 extra paychecks per year (he gets paid once every two weeks). I shop all year round for Christmas, picking things up when they are either a rock bottom price and/or it’s something that I know a person on my list will absolutely love. This helps a lot when you spread the cost out over the entire year. However, even though we’ve always used cash for Christmas, we still go way overboard. Like you, I want my kids to know that Jesus is the reason for the season (pastor’s daughter, here). So for the first time, we are only giving them each 3 gifts. One will be a homemade queen size blanket I crocheted for each of them (they both BEGGED me to make them a larger one and picked out the yarn they liked about a year ago). And trust me, that much yarn adds up to a lot of money. Then they are both getting one HUGE lego set which means I will spend probably most of a day helping them each separately which will also double a nice memory. Lastly, they are each getting a book that they will love. One of my friends turned her nose up at me because I’m not showering them with gifts, but our extended family will do that and I’m so tired of Christmases where they are too sensory overloaded and overwhelmed with a mountain of gifts that they get crabby and don’t appreciate them and don’t even touch half of them. I truly believe less is more!
Jessi Fearon says
Oh I love the idea of saving the extra paychecks! That’s so smart Liz!
Robin says
This is our first debt free Christmas and I’m a little nervous because of my past behavior, but more excited to be paying in cash! I think less is more like Liz said above…but society and social media have dictated what I’ve spent in the past. My husband says we just need to get them a cardboard box, a stick, and some string! (They are creative and ltend to decompose their toys to make their own creations anyways!) Thanks for the encouragement!!
Natalie @ Financegirl says
Yes!! I have never had an in-debt Christmas, and I’m so thankful for that! It’s not worth it.
Amy @ DebtGal says
While we won’t be taking on holiday debt this year, I haven’t set aside designated money for it, either. I love the idea of putting away $10 a week throughout the year! That’s going on my to-do list for 2016 for sure!
Becca says
I’m so sorry you had that experience your first debt-free Christmas. Truly, comparison is the thief of joy. Remember the shepherds, who were the first to welcome the Christ child, who were the first (outside of Mary and Joseph) to learn of His divine mission. The angels chose to announce the glorious event to them, and not to the wealthy or elite. They gave what little they had to celebrate his birth – their faith. Still, it is remembered; centuries have passed and we remember their humble contribution.
I read an article yesterday that detailed the experiences on a Facebook post when the simple question was asked, “What do you spend on your kids for Christmas?” It quickly devolved into a Mommy War – “You must be trying to buy your children’s love by spending so much.” “You must not love your children since you spend so little.” Their choices, too, were criticised – “How can you buy your child that junk? My children only get Montesorri-approved toys.” “Montesorri toys are boring, children need colour.” What a waste of time and energy! And for what? All to mask deep-seated feelings of inequality.
So here’s my offer: I will support the way you celebrate Christmas (or don’t celebrate it) because I know that you know what your family needs. Your Christmas and my Christmas won’t look the same, but that’s okay, because your family and my family don’t look the same either. Don’t feel guilty for what you buy or don’t buy your children – if you can afford to do it without going into debt, celebrate that, whether it’s $10 or $1000. If they open one present, or two, or a dozen, or more – all are acceptable. What matters is that we love our children, and we want to give them good memories. What matters is that we love our families, and we don’t want to risk our financial security for one day of the year.
Malaika Loftus says
Wow what an amazing post Jessi. As usual I feel as though you are speaking just for my family! We have been toning down our Christmas gifts and making sure our little boys know the real meaning of Christmas as well. Thank you for sharing! By the way we had the most amazing wedding 8 years ago also for under $500 like you. And it was one of the best decisions we ever made:) Keep the good advice coming, Happy Holidays
Malaika
Jessi Fearon says
Awe thank you so much Malaika! And congratulations on your frugal wedding! I’m firm believer that’s the best way to start off a marriage. 🙂
Alana @ IhaveaFutureandaHope says
I told my kids we are focusing more on giving this year because that is what the true means of Christmas is. I love the excitement in their eyes when we give to others. It does something in their hearts. They can see that they already have enough. We will be getting them a few things, but nothing crazy, or a budget breaker. I really want to save monthly next year to be able to give more throughout the year.
We are working ourselves out of debt too and it can be so overwhelming at times and I know my children see this and understand that they do not, and will not get the latest and greatest. They do know though that they are loved crazy, have everything they need, and see where others are in need. It has truly changed their outlook on needs and wants. Be blessed this Christmas!
Sarah @The Teacher's Wife says
Love this post so much! I hate debt anyway, but I just cannot see why it could ever be a good thing at Christmas. I love simple, memory-filled Christmas’s instead! I can’t wait to check out Dave’s app – is he planning to launch a version for Androids at some point? I sure hope so!
Jessi Fearon says
He is! They told me that the hold up is that they haven’t been able to find a developer to make the app work the way they want it to on Android. Hopefully soon they’ll find someone! 🙂
Erin @ Stay At Home Yogi says
I hope 2016 will be our FIRST debt free Christmas! In 2015 we scaled down from I don’t want to say to $700 max (including all gifts, activities, special food, cards and postage, shipping, special clothes, etc.). We managed to come in just under that number so I was proud of our progress. But it was a hard change for our family. I don’t feel like we have to spend less if we don’t want to, but it does have to be in CASH ONLY from now on! Really trying to get and stay our of debt in 2016!
Jessi Fearon says
You are so awesome Erin for not only creating a budget for Christmas but for also sticking to that budget! And you’ve got this – I look forward to hearing all about your success with your first debt-free Christmas this year! 🙂 🙂
Darla says
I love this post. We have always had a debt-free Christmas and have never gone overboard but have always had joyous, wonderful Christmas celebrations. Now that most of my four kids are teenagers, we are focusing a lot more on giving to others and teaching budgeting skills. We start talking to our kids in the fall about who they are giving to and what they need to spend. We have them spend their own money and help them come up with a plan and a budget for Christmas shopping. They love picking the perfect gift for their siblings, cousins and friends. I have enjoyed watching them budget generously so they can give someone the perfect gift. Teaching them how to budget for Christmas now will hopefully help them when they have their own families later.