Christmas is not an emergency. December comes the same time every year.
– Dave Ramsey
Dave Ramsey says it perfectly. Why are we stressed financially at Christmas when we have all year to plan for it? We know it’s coming!
Let’s have this year be a stress-free holiday. I’ve been there – super tight in December (even hoping I get monetary gifts from my family to make up for the stretch of buying gifts). I’ve never gotten into debt for Christmas (because I’ve never had a credit card), but it’s still a pretty bad feeling being tight around such a wonderful time of year. I am committed to have stress-free and debt-free Christmases every year. And you can, too!
Here are 4 steps to get financially ready for Christmas.
1. Determine How Much You Can Afford To Spend on Christmas
Look at your finances from now until Christmas. Hopefully, this means you’ll look at your budget. If you haven’t started budgeting yet, you can learn how to budget or sign up for an online tool, like Personal Capital, to help you get started. You can also download a free budgeting eBook. Whatever you do — do something! The first step to creating a debt-free Christmas is knowing what money you have (and don’t have), which means you need to budget.
Decide exactly how much money you can afford to take from your expected income between now and December for Christmas. You want the exact number because it will allow you to plan more accurately.
2. Take Inventory of Christmas Expenses
Make a list of all of your Christmas expenses. This should include everything from gifts to decorations to food to activities.
Here’s a short list of examples that you should include on your Christmas expenses list:
Gifts – significant other, kids, parents, siblings, coworkers, friends, in-laws, nieces / nephews
Decorations – lights, tree, ornaments, candles, stockings, garland, other holiday house décor
Food – Christmas dinner, Christmas breakfast, potluck food for parties, candy for stockings, holiday cakes / pies, treats for the neighbors, hot chocolate and candy canes 🙂
Activities – ice skating, skiing, lights at the zoo, gingerbread houses for the kids, holiday movies, picture with Santa, Christmas parties
Donations – the Salvation Army, other charities
Misc. – holiday photos, Christmas cards, Christmas music, stamps
3. Fill In The Gap
Now, compare what you can afford with what you project your holiday expenses to be. Address any gap between what your projected Christmas spending is and what you can afford. If you projected that you’ll spend $1,000 on Christmas, but your budget only allows for $700, you need to fill in that $300.
Here are my suggestions for filling in your gap between what you can afford spend on Christmas and what you want to spend on Christmas.
Side hustle – Pick up a side job (here’s a list of 28+ side jobs) Is there something you can make and sell online? Or perhaps you can babysit (I use Sittercity.com to find new families to babysit for)? Anything you can do on the side after your day job is over to make a few extra hundred dollars is something to consider as a side hustle here.
Sell things – Dave Ramsey says something like “sell so much stuff that your kids think they’re next” when he’s helping people get out of debt. This is a really useful tool to make money quick. Craigslist is a great place to sell things online (I use it a lot). But there are also less obvious ways to sell, too. My boyfriend recently sold extra metal he had in his barn to a local scrap yard and got $100 or so (they pay by weight). My rule of thumb is that if I haven’t worn or used it in one year, then it can go. Max two years. (I’m definitely a minimalist, which is good when it comes to selling things.)
Adjust your spending on gifts (get creative) – Instead of setting your usual $50 or $100 for a budget for someone’s gift, get creative. Pinterest has lots of crafty ideas for the holidays (I’ve seen hot chocolate packets in mason jars with ribbons and other food items that serve as gifts and are much less expensive). You can spend a lot less on gifts by putting thought into gifts and getting creative with the packaging. Two of my favorite things to give during the holidays are coffee and candles. I’ve also made gift baskets using items from Trader Joes and baskets from World Market for a grand total of $25!! These baskets look like they’re close to $100 if you bought them already put together.
Suggest a Secret Santa gift exchange – As I get older and people get married and have kids, the amount of gifts that need to be given increase quickly. Instead of giving a gift to everyone on your list, send out an email to everyone suggesting a “Secret Santa” gift exchange so everyone is just responsible for giving one gift. You can do this with everyone, or just the adults. Either way, it’s a great way to decrease your expenses, especially if you think your family would appreciate it, too.
Sign up for coupons from stores you’ll shop at – If you know you’re going to shop at certain stores, check online for coupons first and subscribe to their emails if you can get a discount for subscribing. I always check online prices before shopping in-store because often the store will price match or honor the online coupon (Macy’s does this, for example).
4. Start Now
Start shopping now instead of waiting until the last minute. If you have your projected spending budgeted, there is no reason to wait until a better sale comes along (unless you know one is coming for sure). Being stressed around the holidays is the exact opposite of what you want! If you use your holiday budget and plan ahead, buying gifts should be a joy.
photo by digidreamgrafix via FreeDigitalPhotos.net