Planning for a Debt-free Christmas

August 21, 2014

A Time for Everything debt free Christmas


One thing that we know for certain: Christmas will be here in exactly 18 weeks.

One thing that may not be clear: Who will be celebrating it free of gift-giving debt.

It’s much more joyful and peaceful to move into and out of the holidays without having to worry about a credit card bill arriving in January. But that requires three things: creating a budget, making a plan, and sticking to both!


Create a Christmas Budget

This is where you decide two things: for whom you will buy gifts and how much you will spend. And then you commit to your decision on paper.

This is also where you need to be realistic. If purchasing a gift for every extended family member and friend will result in stress or financial hardship for you, then let go of that pressure. If you really want (key word: want) to give to everyone in your circle, there are creative ways to do so without spending hundreds of dollars. Give something handmade (it doesn’t have to be complicated or Pinterest-worthy!) or offer a service.

One way to be intentional about helping your children with contentment alongside protecting your budget is to institute a “three gifts” plan or something similar. We have done this for the past few years, and our kids just know to expect it. I try to vary the themes each year to keep it fresh. One year it was something to grow (like a book or puzzle), something to go (a gift promoting physical activity) and something to glow (an item they were really wanting). Another year it was one to wear, one to share (such as a game), and one because we care (again, something they’d clearly had their eyes on). We also do stocking stuffers… even I still love unpacking my stocking!

It’s ideal to be slowly building up the Christmas fund throughout the year and even purchasing gifts along the way, but don’t despair if you’re just starting. What can you realistically withhold from each paycheck? Can you trim back some unnecessary spending to add to it? Decide, write it into your budget, and then either create an envelope for it or a sinking fund account with your financial institution so that you don’t spend that money somewhere else.


Christmas budget organizer 2


Map out a plan

How much of your shopping will you do online vs. locally? Are you a die-hard Black Friday shopper or will you be found in bed at 4 AM rather than in line? Will you be attending craft fairs to purchase handmade gifts? Write down a few gift ideas for each person and then start watching your local newspaper for events as well as browsing store ads and emails. Here are some key 2014 online shopping dates that will bring some of the best deals before Christmas:

  • Black Friday (November 28)
  • Cyber Monday (December 1)
  • Free Shipping Day (December 15)

There are also some fun free apps available to help you keep track of your Christmas shopping.



Gift It

Gift It app


Santa’s Bag

Santa's Bag



Christmas Gift List

Christmas Gift List

Christmas List Snowball

Christmas List Snowball


Remain steadfastly committed to both

While it’s obvious that you can’t accomplish a debt-free Christmas if you don’t stick to your plans, that doesn’t mean it’s easy. It may require saying no, even when you come across something (and you will!) that’s such a great deal you’re tempted to add it to your list. One exception leads to another, and those add up quickly.

Remind yourself that watching your loved ones open gifts that are already paid for in full will be worth the hard work of exercising self-discipline along the way!


For more on budgeting and frugal living, stop by my blog, A Time for Everything.




Melissa is passionate about people living within their means and becoming--and remaining--debt-free. She is the owner of A Time for Everything, which includes both a shop where she sells handmade cash envelope system wallets and accessories, and a blog where she writes about frugal living, creating, and life in general. She's been blogging since 2007 and making pretty wallets since 2011.

28 comments on “Planning for a Debt-free Christmas

  1. I cannot believe 18 weeks till Christmas. I always plan ahead with a budget and list of folks. It is just not possible to get everyone gifts. At first it was hard to say no but when we were shopping for everyone it was more stressful and not as meaningful.

  2. Downloading the “Santa’s Bag” app right now! Thanks so much for the inspiration. 😉
    ~ Ashley

  3. Steph says:

    Awesome blog post today. I only have one child and my husband. However, we always give to another family. It is so important to me to be debt free for the holidays. I am happy to report that I already have two things purchased and two to go. No big Christmas in our household because it is not our birthday!

  4. Kari says:

    Great post! 18 weeks til Christmas…I think I just had a mild heart attack! Where did the year 2014 go?!?! We instituted the 3 gift rule when my husband and I married 11 years ago so it’s the only thing our kids have ever known. I love how you switch up the themes though to keep it fresh! Great idea! We have done Christmas on cash for the last 5 years and the difference it makes is incredible! It’s so nice to open those gifts on Christmas morning and know you won’t be paying for it starting in January! Thanks for the tips!

  5. Sabrina says:

    I like to use credit card points for gift cards. I save the points all year and then go and buy a bunch of gift cards for 20 something nieces and nephews. It works great! Thanks for sharing. Great tips.

  6. Eighteen weeks! Yikes! I always put off Christmas shopping because I don’t know what to give people. Then I panic the week before, and overspend. Trying to do better about planning ahead this year!

  7. 18 weeks before Christmas?? That gave me a slight panic attack! Thanks for sharing these great tips. Last year I did all my Christmas shopping online & it saved me a bunch of money & I made it through the holidays debt free and sane.

    • As long as you don’t do too much browsing, shopping online can be very helpful because you’re not walking through a store and seeing all the other great deals that aren’t on your list!

  8. Morgan says:

    Thanks for sharing these great apps and for inspiring me to get more organized now for the Christmas season. I’m going to download the Santa’s App too!

  9. Kathy says:

    My daughter and I were just talking today about our plans for Christmas – awesome tips! I appreciate you,

  10. cece says:

    Had never heard of Santas Bag…Thank you and especially Thank you for helping me stay organized!!

  11. Trish says:

    I always have a Christmas Club savings account but I do 95% of my shopping online now because I get great deals, I avoid impulse purchases and more importantly CROWDS! Which kill my holiday spirit. So with a cash envelope system, if your best price is on Amazon do you just debit it and deposit the cash?

    • Yes, that’s definitely a good plan when you’re committed to the envelope system! Some people will literally take the money from the Christmas envelope as though they’re paying cash right then and place it in an envelope marked “Christmas Deposit” or something similar. Then the key is to make sure you get to the bank regularly to make those deposits. 🙂

  12. Kathleen says:

    Yikes…18 weeks away! A couple of years ago, my brother, sister-in-law, cousins and their spouses, and I stopped exchanging gifts and switched to a secret santa format. Over Thanksgiving weekend we draw names out of a hat (the paper has our name and at least three gift/theme/interest ideas). If someone can’t make it, then we have an aunt, uncle or child draw a name for us. We end up purchasing one gift instead of about 20. We also set a spending limit so no one would feel burdened. We do still gift “down” (to the young children). Many have commented about how we don’t feel so overwhelmed … and enjoy our get-togethers much more. Oh, and we ask one aunt/uncle to keep a master list of who got who (yup…learned that the hard way one year!).

  13. Laura.M says:

    Thanks Nic for a great reminder that if you do a little at a time, early enough, then it won’t be a stressful ‘silly’s season. I will start my planning this week, starting with the theme and gift list. : )

  14. Glenda says:

    I donwloaded the “Santa’s Bag” app! It’s easy to use and keep track. Thanks so much. Great app ! Melissa. I will try it for this Christmas. HoHo
    ~ Glenda

  15. Karen says:

    Great app ! I tried it and still use it up to now. Thanks

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