It's Not Too Late to Have a Debt-Free Christmas

10/10/2016 09:19 pm ET

Cooler temperatures have descended upon us. The trees are changing from a deep lush green to shades of red, yellow and orange. The seasons are changing and fall is here. And with fall comes the reality that Christmas is just around the corner.

Yes, I know. "It's not even Halloween yet!" I can hear you. And I agree. But this is important.

Christmas is coming. In fact, there are only 76 days - only ELEVEN WEEKS - between now and Christmas. For me, because I get paid bi-weekly, that means there are only five paychecks left to pay for gifts, food, potlucks, decorations, holiday entertainment, extra gas for driving long distances to visit family, and everything else that goes along with the holiday season. Yikes.

The temptation to rely on credit cards is HUGE this time of year. Don't do it. Don't give in! The time to make a debt-free plan for Christmas is now. So what do you do?

First, make a list of everyone you usually buy for. Include the typical family and friends, your kiddos and coworkers... and don't forget gifts to charity, Toys for Tots, the mailman, and the intern at work that you always forget about until the last-minute (okay, so that last one is a reminder for me).

Once you have your list done, think about how much money you'll need to set aside to buy each person a gift. This is tough. It might help to think about what you bought for them last year (and how much it cost) as a starting point for your budget for that person this year.

Add it all up. Divide it by five (or the number of paychecks you'll get between now and then). That's your magic number. That's how much you'll have to set aside every paycheck between now and Christmas.

Is that a realistic goal? Can your finances afford for you to save that much each and every paycheck for a few weeks? If not, you'll have to go back over your list and make some changes.

  • Is there someone on your list you don't really have to buy for? (Sorry mailman.)
  • Maybe you can do a gift-exchange and draw names with your family this year instead of buying a gift for every single person?
  • Or maybe you can shave $5 or $10 off each person's budget and buy them a less extravagant gift?

Now is also a good time to start thinking about setting up a Christmas Club savings account for next year. It's a life saver when the stress of the holidays sets in. Can you open the account now and start adding money to it after you've taken care of expenses for this year? Just a thought. We'll come back to that later (after this year's Christmas season).

Christmas spending is something I struggle with every year. Do you? What are your tricks to staying on budget for the holidays?

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