This post originally made to Wendy’s site GirlFIday.  Both Wendy and Timika, with nine kids between them, understand the need for keeping holiday expenses under control.  To that end, both of their families have begun using the 4-Gift Challenge as a way to keep Holiday spending under control and have a little fun in the process.  On their respective FIRE journeys, they have learned there is nothing fun about opening the mail in January – that is if you have failed to plan and paid for Christmas on credit. 

Christmas Gifts on Credit….the Gift that Keeps on Giving…

How much will you spend on the holidays this year?  If it’s close to $1,000.00  then you are pretty much average.  How much of your monthly budget is that $1,000.00?  It goes without saying that the holidays and holiday spending can be a budget buster.  And it’s not just the gifts that are purchased, there is extra money that goes into the food budget, into holiday decorating (do you have a Clark Griswold in your family?), traveling, getting the carpets cleaned and other purchases that are made to make the day(s) picture perfect.  And that’s what we all want, right? Is to create a feeling that will last.  There is nothing wrong with that!!!! You heard me right.  There is nothing wrong with that.

Our household loves Christmas and we love to decorate.  One of my greatest desires is to make sure that my children will have fond memories of the holidays. That they will look back and have snapshots of great moments that make them feel good.  So I completely understand that the expense that goes into the holidays is not always about “stuff” – it’s about the feelings that we have and the expectations we have about what these moments mean to us.

THE DECEMBER DILEMMA 

What is not good and not all right is to borrow to make all this magic happen.  We do not want the “high” of the holidays to be followed by the January “blues” when the mail carrier delivers the credit card statement and what we thought was just a few bucks here and a few bucks there has multiplied into a bill that cannot be paid off immediately.  Did you know that a credit card balance of $1,800.00 with 11.99% interest being paid at $100.00 a month will take 20 months to pay off? Do you really want to be paying for last year’s Christmas next Christmas?

The other danger is that holiday gifts are purchased at the expense of your current budget.  How does this happen?  If you have not budgeted for your holiday purchases and you don’t have any sources of extra income to pay them, then it logically follows that the money for those purchases is going to be at the expense of something else in your budget.  The cost of this?  Late fees, NSF fees, playing catch up for a few months into the New Year is not how you want to start the New Year.

THE CHALLENGE

So what to do?  PLAN!!! You know what they say, “those who fail to plan, plan to fail!”  I know…the holidays seem to sneak up on us every year – but it’s really more about poor planning on our part, isn’t it?  The holidays are not one of those sneaky holidays that change every year.  Each year they are in December – EVERY DECEMBER.

One way our family has opted to keep our Christmas budget under control, especially since adopting all the boys, is to do the 4-Gift Christmas Challenge.  The Challenge is simple…for each child, we purchase something they Want, something they Need, something to Wear and something to Read.  It has been such a cost saver for us and each child gets a mix of presents we can feel good about giving.

THE BUDGET

The easiest way to be ready for the holidays is to simply budget for it and put money in an account or some other stash where you can keep it and keep adding to it throughout the year.  Other ideas:

  • Get a seasonal job to pay for the extra holiday expenses
  • Budget gifts into your monthly budget and purchase gifts throughout the year
  • While you are attacking your mountain of debt –
    • have a year or two (or three) of hand-made gift giving.
    • agree on one family gift.  We know a family that did this and the parents surprised the kids with a new family dog on Christmas morning.
    • tell other family members that you are not giving gifts this year while you are getting out of debt.
    • Get creative!!! There are lots of ways to make your holidays inexpensive.

We have opted to budget for our Christmas for the past several years and limit the amount we spend on gifts.  What is interesting is that as we get further along in our debt repayment the desire to spend on gift giving has decreased.  We would much rather see our debt reduced than a bunch of boxes under the tree.

THE CHRISTMAS SPIRIT

I would be remiss if I didn’t mention that one of the greatest ways to put the holidays, and what is really important about them, into perspective is by sharing it with others and by finding a way to serve someone, anyone, during this season.  You want to create memories for your kids?  You want to teach them about what is most important in this life? You want to teach them responsibility and to appreciate all that they have?  This is how it’s done.  Serve with them – shoulder to shoulder.  Serve in a shelter, deliver food to the homeless, adopt a needy family and deliver presents to them, visit a hospital, there are so many possibilities and opportunities to serve.

What’s up with that?  A message about serving in the middle of talking about holiday debt?  Here’s what I am getting at.  It’s a paradigm shift.  It’s getting off the crazy train of debt.  It’s realizing that what you have IS enough and you don’t need more “stuff” and even if there is some “stuff” you really, REALLY, want…you have to want to be debt free more.  You have to reach a point where you are satisfied and a really powerful way to create contentment in your own heart is to pour into other people.  It’s really difficult to  have everything be about YOU when you are staring into the face of someone else who needs help – it becomes crystal clear that it is not about you – but THEM.  When this shifts for you, something happens and your spending will decrease, which means more funds available to attack your debt and get off the crazy train of debt for good.

A happy DEBT FREE holiday to you all!

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