Christmas – the Season For Debts to Grow… Or Is It?

When is the most common time of year for people to get into financial trouble?


We are all bombarded with advertising to get us to buy the latest toy or other gift for family and friends. Gifts that we may not be able to afford.

So how can you get through the Christmas season without a pile of “debts and regrets”, but not be considered “cheap” by family and friends?

1. Make a Christmas budget.

Use your family budget to determine how much you can afford to spend this year. Then take that number and create a Christmas budget. Assign a dollar amount to each person on your list, and include an amount for Christmas cards, wrapping paper, and party clothes. Click here to see a sample Christmas budget.

2. Stick to your Christmas budget

There is no point in creating a budget if you don’t follow it. Once you create it, stick to it. Carry it with you when you go shopping so you know how much you can spend on each gift.

3. Keep close track of purchases

When you buy something, write it down. Write it down on your budget; or carry a small piece of paper in your wallet so you can record every purchase.

4. Pay with cash.

If you have a credit card, you will probably spend more than if you pay with cash. Withdraw enough cash for your day’s shopping, and don’t spend more than you have in cash. An added bonus: by paying cash, you avoid 18% or higher interest charges on credit cards.

5. Talk to your family and friends.

To avoid going over-board, set limits with family and friends. Set a limit on the value of gifts you buy each other. Emphasize thought and creativity, not price.

6. Start a family gift exchange.

Instead of buying gifts for everyone in your extended family, have a draw so that you only buy gifts for one or two family members.

7. Plan for next year.

Shop at the Boxing Day sales for wrapping paper, decorations, and Christmas cards.

Like all areas of budgeting, having a plan and sticking to it will improve your chances for a financially successful Christmas season.

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