christmas budgeting

Five Tips For A Debt Free Christmas

In Budgeting Tips by Phil McGilvrayLeave a Comment

Christmas time should be a wonderful time of celebration, family fun and relaxation…. well that’s the theory. The reality on the other hand can be quite different, especially when money’s tight.

If you’re like most people, Christmas means stretching the limits of your credit card or dipping into the redraw facility. To help you keep your costs down and manage Christmas without the debt, here are 5 tips for a debt free Christmas!

Tip 1: Start Now

One of the keys to successful budgeting is to spread the cost of all your expenses out over the full year. Unfortunately with December knocking on the door we have missed the opportunity to save and plan throughout the year. However, we do still have 3 weeks. We have 3 weeks to plan, prepare and distribute the costs – but you have to start today!

There are typically two reasons we overspend at Christmas. First, we don’t develop a plan regarding what we need to buy and what we are willing to spend. The second reason is we don’t give ourselves enough time, so we choose quick and convenient at the expense of cost.

Don’t get caught in the frantic last minute rush, take your time to plan and prepare but start today.

Tip 2: Make a Plan

Okay we have 3 weeks to go until Christmas Day; we need to develop a plan. In our earlier blog 3 tips for saving money this Christmas we discussed the importance of having a Christmas Gift List.

The Christmas gifts list is simply a worksheets that has three columns – who am I going to buy a present for, how much will I spend on each person and what would I like to buy them. Having a list like this will help you stick to a budget and save you bucket loads of time.

But Christmas expenses don’t stop with the presents. Christmas is about celebrating and letting your hair down and for us Aussies that means yummy food and drink. Fortunately, like presents this can be planned for. Create a list where you write down all the additional food you believe you will need this Christmas. The food is broken into categories to help you plan everything from chips and chocolate through to the prawns and turkey.

Plan a shopping schedule that helps you plan your festive purchases through the coming weeks, allowing you to manage your cash flow better. For instance 4 weeks out is a good time to be stocking up on tinned goods, 3 weeks out you might want to look at chips, chocolates and other nibbles, 2 weeks out drinks, and the week of Christmas you can buy the fresh goods such as  bread, prawns, fruit and vegetables.

Also keep an eye out for things like frozen Turkeys, Christmas cakes and crackers that can be bought on special several weeks out. My wife Lianne picked up the Turkey last week for nearly half what you would expect to pay in the week or two before Christmas. The shops know you get more desperate the closer it is to the big day, so you can be certain they will jack up the prices.

The key to avoiding debt at Christmas is to try and manage your cash flow. If you can spread your costs over the month rather than the week before, you have a much greater chance of avoiding the need for debt but to do this you need to have a plan.

Tip 3: Give Yourself Time

Great we have a plan; what we need now is the time to execute the plan. Whether it’s shopping for food or presents, you need to give yourself focused time to get to the shops and make it all happen. You do not want to have time pressure of distractions. Armed with your lists, set aside a time each week without the kids to get in and get it done. Put it in the diary and make sure it happens. Last minute shopping is the enemy of cost-effective shopping.


Tip 4: Don’t Be Afraid To Shop Second-hand

Some of the best presents I have ever received were second-hand.  As an 18 year old I remember my Mum and Dad bought me a second-hand wave ski. Yes, it was a little scratched but it was awesome. The quality of the ski was so much better than what they could have afforded new. Believe it or not, 25 years later I still have that wave ski in my garage!

With a plethora of classified websites these days, grabbing a second-hand bargain is much easier than ever. We have bought all three of our kids’ bikes second-hand; again they had a couple of scratches but cost us just a fraction of the price we would have paid new.

We also have a close friend who volunteers one afternoon a week at our church Op-shop – she regularly comes home with some amazing bargains!

Don’t let your pride, ego or whatever you want to call it get in the way of a good bargain.

Tip 5: Make a Stand

I will be writing about this is an upcoming post but l wanted to include a little bit here. Debt is a habit; a habit that costs you peace of mind and robs you of future cash flow. Living without debt, doing Christmas without the credit cards and lines of credit may be hard but what’s the worst that could happen? Why don’t you make a stand this year? Tell your friends and family that this year you are doing Christmas without debt. Yes, presents will be smaller and Christmas Day might consist of cold water, toast and a bowl of M&Ms but I guarantee you it will be a Christmas worth remembering and for all the right reasons!

Of course, if you decide to make a stand and go debt free this Christmas, make sure you use the next 12 months to save towards next Christmas.

So there you have it, 5 tips for a debt free Christmas. My hope in writing this is that you will take this blog seriously and put some or all of these tips into action. Christmas should be a special time with family and friends but debt robs us of much of the carefree enjoyment. Do what you can to make this a debt free Christmas and come January your credit card bill will thank you for it.

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