Will you be paying cash for Christmas this year? I just happened to see that Christmas is a measly 60 some days away!
What do I mean by paying cash for Christmas? I mean will you be able to buy all your holiday gifts & buy all the food and beverages needed for your holiday entertaining without going into debt. If you are like I am, you don’t like the thought of being saddled with debt once the magic of the holidays is over. We have experienced that kind of January credit card statement shock before and it stinks. Those gifts you merrily purchase on credit in November and December aren’t nearly as much fun when you are still paying for them after Christmas is over. Years ago we stopped using credit cards to fund anything, including the holidays. It wasn’t easy, but it was life changing.
Tips for paying cash for Christmas
Budget
This sounds simple in theory but it takes a firm commitment all year long. You know us well enough to know we are firm believers in the monthly budget. If you are a monthly budget fan too, simply add a line item to your budget for the holidays. To get an idea on how much money you will need, take a minute to list all the people you buy gifts for and the dollar amount you spend. Don’t forget the small gifts too, like for the postman or your hair stylist or teachers. Those add up quickly. Once you have your rough total, divide that by 12 and save that amount each month from your budget.
The 52 Week Saving Challenge
This is by far our favorite way to save for the holidays. We found out about this a few years ago and it has become our number one success tool that allows us to be paying cash for Christmas. You can find out more about the 52 Week Saving Challenge; we kick off a new round each January and we send out weekly reminders to be sure you stick with it. We love this easy budget tool that helps us stockpile $1378 each year.
Christmas Club
Growing up I was taught to save money in our local bank’s Christmas Club. Usually once a month or so my dad would deposit $1 or $2 into my Christmas Club account and take me with him to the bank so I could also deposit a few dollars into the account. It would usually only be a dollar or two, but it taught me the value of saving money. In November the credit union would mail the check from the Christmas Club account to our home and my mother & sister and I would go Christmas shopping. It was an annual tradition; we would always go shopping during the opening weekend of deer hunting season (which in Michigan is a really big deal). I know my mom went shopping more than that day, but she made sure my sister and I felt special that day. Oh the good memories! If your bank or credit union offers a Christmas Club account, this may be a tool you want to utilize. Stashing unexpected cash in this account can help boost your holiday cash budget.
Cut down your gift list
Ouch, right? That one may hurt a little but if you are serious about wanting to pay cash for Christmas then you need to be sure the cash you manage to save is enough. Maybe you skip the office gift exchange this year (who needs another candle or picture frame, right?). Maybe you opt to spend a little less on the family members? If you buy 10 gifts for others and cut the budgeted amount by just $5 each, that saves you $50. Can you suggest to draw names with family members or friends instead of buying a gift for everyone? Jim’s family did this quite a few years ago for the adults and it saved everyone a huge amount of money. At that time Jim’s family had 9 adults; we would spend typically $30 to $40 per person. Now, we draw names and have a family set spending limit of $50 that everyone adheres to. This was an easy way to save over $200 per year. Maybe you have a stash of items you can regift? That may raise some eyebrows initially but I know we all have those presents that are sitting in your home, unused. Maybe your child’s teacher will enjoy the thermal coffee mug that you never used? Maybe cousin Susie loves cats so the cat socks you have never liked to begin with are a perfect match. Maybe that set of dish towels that you never used will make the mail carrier a happy camper? Or that gift card to the coffee shop that you really never go to? You get the idea – take a peek at your new items that are gathering dust and regift. (I won’t tell.).
Give your time instead of an item
Think about those you are buying gifts for and think about what they really need. Is there something you can do for them instead of buying them something? For instance, a family member is struggling with keeping up with her flower garden maintenance. She would love for someone to come over and take care of that project. Another family member has an issue with her roof that needs a simple repair; instead of her having to spend money to fix it she would be delighted to have it fixed for free by a family member. If you put serious thought into your gifting list I bet you could come up with at least two people that can really use a gift of time/physical labor much more than a store bought trinket. While taking up your time and your effort, it frees up more cash in your budget.
Imagine a January that is holiday debt free. Can you feel the joy in that statement? We’ve been on both sides of the equation and I can tell you that the debt free side feels amazing. Never, NEVER again will we make the mistakes we made before. You can do this too!
Even if you are late to the party for Christmas 2017, start focusing on Christmas 2018 and be ready to make a change. Paying cash for Christmas is life changing, we know you will agree.
Dave Ramsey has an email series that can help you with paying cash for Christmas. Visit DaveRamsey.com and sign up for the email.
