How To Manage Debt at Christmas Time

With the Christmas shopping season just around the corner, or in fact virtually upon us, it is a good time to do some planning and some goal setting, prior to the season taking off and taking over, and be fully prepared to manage debt before it becomes a problem. Once December rolls around the hectic nature of the lead up to Christmas is exciting and fast paced, fitting in all the end of year celebrations. But the expense can Do you really want to go through that horrible February ritual of opening the 

credit card statements that have numerous expenses on items that really did not need to be purchased? The February downer is a bit hard to take, and with a debt-free goal in mind, the challenge is to limit the potential damage so that you do not have to manage debt that is out of control.

Top Tips to Manage Debt at Christmas Time

Here are some ideas on what you can do to reduce the cost, and levels of borrowing required, to fund the traditional no-holds-barred Christmas celebrations and reduce the need to actively manage debt in February. The goal simply is to not go into debt, and more importantly, not purchase things that you do not need to purchase. Try these:

1. Start up a Christmas savings account for next year. That’s right, start early so you can cruise through Christmas this time next year. Work out how much you need to cover all the main expenses…say 10 presents at $50 each, and work out a savings plan that gives you $500 by next December. Do it. It will save so much pain. Then you want have to manage debt this time next year.
2. Plan ahead. What are the big expenses? How can you rearrange your debt reduction strategy temporarily to accommodate the increased expenditure for Christmas dinner and parties etc.
3. Back to this year. Make an agreement with the extended family over gift giving. Do a pull-from-the-hat giving pool. Each only buy s for one, two instead of everybody buys for everybody. Agree that getting together is more important than going into debt to buy presents for family members that you hardly ever see.
4. Agree that nephews and nieces, long since grown up, don’t require pressies anymore. They don’t expect them, you cringe at the thought of finding something that is worthy of a 19 year old. Just because you have bought a Christmas present for the last 18 years, doesn’t mean this has to continue. You have got to stop some time. Make it this year.
5. Agree that Christmas time is more than just about “getting stuff”. Christmas time is a celebration of great religious significance, it is a time to slow down and stop for a few days, and it is a precious time to spend with your family as the centre of attention. It is a reminder of what the most important aspects in life are. And I assure you an Xbox 360 or a new laptop computer is not as important as spending quality time developing the relationships with your family.
6. No presents – have a holiday instead. You can say to your children that instead of multiple small presents this year, you are going to arrange a week or two at the beach, or camping in the forest. Exchange cheap made in china items with some quality time together – your kids will remember those times long after the plastic toy has been thrown in the rubbish.
7. Change expectations. Forget the notion that if you haven’t spent $200 on every family member you haven’t done enough. This is not the case. A more modest approach to gift giving is required. A small, quirky, unique gift that does not cost the earth will be appreciated.
8. Go handmade, or go the markets. Support you local artisans, and buy cheap, unique gifts from the local markets. You will be a blessing to the seller as well as the gift recipient. Keep your money circulating in the local community – this is always a good thing.

Christmas is a joyous time of year and it should not be time that sets you up for more debt fuelled worry on the other side when the bills come in. Go lean. Have an amazingly fun time with your friends and family, and start next year off with a refreshed commitment to becoming debt free.

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