How to avoid debt and have an awesome Christmas this year: 5 min read by Chris Rea
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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 that 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 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 $2500 and served us well for 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 wouldn’t have changed our behavior, all we would have done with more money, was spend more money. More money on 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.
.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 already be doing some of these, but if not, the light bulb is about to go off.
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, just 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; you’re buying affection into someone’s life by any means necessary. Generosity (which doesn’t merely mean financial) isn’t exactly generous if you’re using Mastercard’s money to buy gifts.
Why not make this year the year to get creative with your gifts? (Don’t worry, we give you plenty of ideas here) 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 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 to budget ahead of time, Christmas becomes more enjoyable and so much less stressful!
Personal finance is not about math, it’s about the behavior. If we can take some time to create a plan for our money, we can have more of it at the end of the month! A little behavioral discipline and intentionality is 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 finances this holiday season! You can avoid debt and still have an AWESOME Christmas this year!
Until next time,
Chris
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