How To Avoid Debt & Have An Awesome Christmas This Year

How to avoid debt and have an awesome Christmas this year. 5 min read by Chris Rea

There are a lot of things outside of our control; the housing market, weather, Detroit Lions victories.

And of course, things slightly more serious. Those things we have no choice except to offer up to God and trust He will come through for us. However, there are several things which are in our control that often times we abuse… and then blame God for “not coming through for us.”

One of the biggest offenders? Our finances.

 

I have heard so many people say, shoot, I’ve said it myself, “If I just had more money, life would not be as stressful. If I just had more money, life would be easier & more enjoyable.”

Can I tell you something? Personal finance is more about behavior than about math.

Here’s a fun story. Right out of college I got my first real job making $28,000/year and Megan was making $27,000/year. So combined, newlywed us were bringing in $55,000/year back in 2001. And, we lived paycheck to paycheck. We would literally take our checking account down to about $30 per month. Each month.

 

We reasoned, “if we just made more money, then we wouldn’t be as strapped. We would be able to enjoy life.”  Now, let’s peek behind our proverbial 2001 financial curtain.

 

• We had $25,000 of student loan debt we were paying off.
• We had a $130,000 mortgage.
• We had 2 lease vehicles totaling $500/month.
• We had $3000 in credit card debt.
• We went on a $2,000 vacation to Florida that year
• We ate out whenever we wanted.
• We had no clue how to create a written budget for each month.

Of course, we were broke! But we didn’t need to make more money, we needed to change our behavior and be smarter with the money we did make.

Long story short, here’s what we ended up doing.

We created a budget that accounted for every single dollar that we made each month.

We turned in our leases and bought used cars.

I drove a 1994 Mercury Villager minivan for the better part of my 20’s people. It was tan, smelled like old fries and only played cassette tapes. BUT, it cost me $2500 dollars and lasted me 5 years. Win.

For Megan, we bought a reliable, but inexpensive used car and paid it off within one year.

Then, we stopped going on vacation unless we could pay cash for it.

And we went out to eat much less and learned to cook together.

 

In short, we changed our behavior.

 

 

Don’t get me wrong more money would have helped. A lot. But, if we didn’t change our behavior all we would have done with more money was spend more money.  More leased vehicles, more vacations and more eating out. We still wouldn’t have gotten ahead. Our behavior had to change first.

 

 

If you feel stuck in your finances, read this book and start putting the principles into practice immediately. This book changed everything for us. We recommend it all the time. It works.

Feeling stuck in other areas too? Read this book. We wrote it for you. Send Me A Copy

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What does any of this have to do with Christmas you ask???

So many people go deep into debt at Christmas and put themselves way behind at the New Year. We did our first year and we want so much better for you! And, Once again, it’s totally possible because it’s a behavior problem, not a math problem.

 

This Christmas, you can COMPLETELY avoid going into debt if you want to.

Sound too idealistic? Well, here’s 5 ways to avoid going into debt this Christmas season. Just read them and see what you think.

You may be already doing some of these, but if not, the light bulb is about to go off.

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1. Decide how much money you want to spend on Christmas gifts

Do this first. Right off the bat. Decide how much you can afford to spend without going into debt. Don’t think about everyone you have to buy for, just think about the total amount of money you can afford to spend without putting a dime on your credit card. Start here, because if you start listing everyone to buy for you will end up spending way more than you can afford. Create a total number first!

 

2. Create a list of everyone you have to buy for

This part, you most likely do. But if not, create a written or typed list of everyone you need to buy a gift for this Holiday season in descending order from “If I don’t buy them a gift I will be disowned,” to “I’d love to get them a gift if I can.”

 

3. Put a number next to each person’s name

Using the number from step 1, start subtracting from your total number by putting a number by each person’s name. If you have 15 people to buy for and you run out of money by the 7th person, start over. Don’t change the total number from step 1, lower the amount of money you spend on each person. “But Chris, I can’t just buy my kids one or two things.”

Yes, yes you can! And you’ll teach them a crucial lesson about finances in the process.

“But it’s Christmas and I want to be generous!”

It’s not generosity if you have to go into debt to buy gifts. It’s actually, brace your toes, insecurity. It is a need to buy affection into someone’s life by any means necessary. Generosity, which doesn’t merely mean financial, is always given out of an abundance. It is not generous if you are using Mastercard’s money to buy gifts.

Why not use this year to get creative with your gifts? Spending less doesn’t mean it can’t be special! It can actually be more special because you put more thought into buying gifts when you are working with a specific budget for that gift.

The total number from step one should be at zero at the end of this exercise.

 

4. Stick to the plan

If you are married, together, sign the plan and vouch not to go over the plan no matter what! If you are single, show your plan to a friend and make them hold you accountable to it. You don’t have to spend hundreds for Christmas to be special!

 

5. Plan better next year

Guess what you’re going to do in January? Start planning for Christmas. December 25th always arrives at the same time. It shouldn’t surprise us. So decide early in the year the number you want to spend on Christmas gifts that year. Divide that number by 10.  Then, starting in January, put that sum of money into a different account each month throughout the year so when November hits, you have the exact number you were planning for.

If you’ll be disciplined enough to do that, Christmas becomes enjoyable and so much less stressful!

 

Personal finance is not about the math, it’s about the behavior. If we just took some time to create a plan for our money, we could have more of it at the end of the month! A little behavioral discipline and intentionality is the key to having success with your personal finance and not going into debt at Christmas.

 

Debt can appear overwhelming and make you feel so small. But NOTHING about your beautiful life is small! Let’s do January us a favor and take control of our personal finances this holiday season!

Until next time,

Chris

 

PS. In the holiday spirit now? Check out these money-saving apps, how to enjoy the holidays when you have food allergies, a throwback home tour, and what we DON’T do at Christmas.

PSS. Looking for more financial posts? Click here

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