THE BLOG
11/11/2014 11:55 am ET Updated Jan 11, 2015

How My Christmas Will Be Debt Free

This summer before Labor Day, I saw plenty of Halloween stuff out in the stores. No big deal right?

Then I saw Christmas Trees displayed before Thanksgiving. Wow.

This morning I heard Christmas music on the radio and we are weeks away from Thanksgiving!

What does all this mean? Well, if anything it means someone is planning ahead. Way ahead to be sure. It does drive me a bit crazy that I cannot enjoy the holiday season that I'm in for the remainder of the next one to come.

So that reminded me of some planning that I do for the holidays way ahead of schedule. I'm talking about the most expensive for my family...Christmas.

This year I want my Christmas to be debt free. So how will I do it?

First, many years ago I opened a Christmas Club Account. Old fashioned? Yep. It works for me. I did this years ago, so I'd have the money for my kids toys for Christmas. Now that they are older, it still works pretty good. All year-long I place money in the account. That way when Christmas rolls around I have the money to allocate to gifts. I like the fact that it is a dedicated account solely for that purpose. So I'd suggest opening one right now. Start setting aside funds for next year.

Second, I'll use cash and budget. Every Halloween, I pull the money from the Christmas Club and have the cash available to purchase gifts. Cash makes it just as easy to return items in case I find them cheaper somewhere else. The big thing is that I don't overspend using cash, unlike credit cards. When it's gone you can't keep spending. (well some people do.) Cash is visual too. I have placed the cash in various envelopes marked with the person's name that I'm planning on buying gifts for. Works well if you tend to splurge on someone special.

Third, I'll limit online spending. This has always been a challenge. Online spending with a credit card can get out of hand. It's hard to put the cash I saved back in the bank and pay on a credit card. So my solution has always been to pay that balance off at the end of the month. I'll just have to limit the amount that I spend. Pay off your balance or don't spend the money.

Finally, this year I'm thinking of using gift cards. The great thing about gift cards is you know exactly how much you spent. I'm not using these for close family and friends but for all those extra gifts you end up buying. I'll set aside a certain smaller amount of my cash for this purpose. I've even created gift baskets with gift cards that I know that person likes.

So that's how I'll do it. Hope your holidays are meaningful and debt free. If you liked the article, you can subscribe right here for free!

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