How to Avoid Christmas Debt

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Want to have a great Christmas but also want to avoid Christmas debt? It is possible to do both. With a few easy steps, you can have a debt-free Christmas.

Are you tired of going broke every Christmas? Last year shoppers around the country estimated they would spend over $900 just on Christmas gifts. Add in travel, food, clothes, and event costs and you can rack up debt very quickly if you aren’t careful.

On average, Americans ended up with $1,054 in debt last Christmas. That’s a lot of debt to try and pay off. If you paid a minimum payment of $25 each month you’d be paying down the balance until 2023 and there are more Christmases between now and then.

I’m not going to tell you to ditch your credit cards unless you can’t have restraint, but I do want to help you avoid debt this Christmas.

Christmas is a wonderful time but we shouldn’t be harming our financial future while celebrating. That’s just going to make for a stressful holiday season.

Create a Christmas Budget Right Away

Don’t wait until right before the holidays to decide what you want to spend. It’s best to create your Christmas budget as far ahead as possible. You can always increase it later if you end up with more money.

Knowing your budget will help with all other aspects of avoiding Christmas debt.

Christmas Shop All Year

Trying to buy everything for Christmas in a month or two’s time is stressful. Not just mentally but also on your budget. Spreading it out can help with this stress.

It can also help you save money overall because some of the best prices are found throughout the year. This is one of the reasons it’s important to know your budget ahead of time.

Earn Extra Money

Starting a side hustle is a great way to build up your Christmas savings. There are a ton of ways to make a little extra cash on the side these days.

And don’t worry you don’t have to get into direct sales. You can find my favorite side hustles in 6 Ways to Make Money for Christmas.

Save Money Every Month

Putting aside a set amount of money each month is a great way to have the money you need already on hand. Once you have your budget you will know how much you need to save every month to reach that goal.

I always like to build in some cushion in case there are unexpected expenses. It’s always good to have a safety net. If you don’t end up needing it you can use it for something else after Christmas.

Pay Off Your Credit Cards Every Month

I rarely carry cash and put most things on my credit cards. I know this makes many financial experts upset but I end up saving money this way.

I have reward credit cards so I get money back, which wouldn’t be true with cash. The trick is always paying them off! This means you need to know how much money you have at all times and never putting things on your credit cards if you don’t already have the money.

I actually pay my credit cards each week if they have anything on them. This makes sure I don’t lose track and since you can now easily pay online it’s not a hassle.

If you are using credit cards for the rewards don’t count on that money to pay off the credit card but instead think of it as bonus savings. You can even put that money directly into savings or your Christmas savings.

Spend Less Money

And the number one way to avoid Christmas debt? Do less and spend less money. That may sound too hard but there are likely a lot of places you can cut back either at Christmas or before to save up money.

Memories are what really matters at Christmas so cut back on gifts and focus on fun experiences. There are always a lot of cheap or free Christmas activities going on around the holidays. Those memories will last a lot longer than any gift.

Related Post: How to Have a Mindful Christmas

In conclusion, start thinking about Christmas now and how much you want to spend. Having this plan ready ahead of time will make the holiday season better and mean less stress after the holidays.

No one wants to start a new year with even more debt and that’s what Christmas debt will do to you. Follow these tips instead and have a stress-free Christmas and new year.