This year treat yourself to a merry, debt free Christmas
Did you know that many people who borrow money to pay for Christmas are still paying it off when summer rolls around? Crazy right!?
According to National Debt Advice over a third of us borrow money for Christmas gifts, and one person in twenty will skip paying a bill at Christmas because they can’t afford it.
This year make sure you have a debt free Christmas and join the two thirds of people who get through the Christmas season without borrowing.
So if you’re ready to start 2021 debt free, here are 12 tips to get you there:
1. Have a plan.
2020 has been a challenging year in so many ways. It’s been stressful and hard for so many of us, so Christmas should be a time to relax and not the cause of more stress.
Take this opportunity to really consider what is important to you and make that a priority for Christmas. Let go of the rest. Ramsey personality Dr John Delony shares his tips for a stress free Christmas here
There are lessons to be learned from lockdowns that can help us can save money at Christmas. For many of us shops have been closed and we’ve had limits on going out. The first tip is not to rush straight out to the shops in the run up to Christmas. All the retailers are doing everything in their power to get you to part with your money, so it’s time to be intentional and do what works for you. Remember, YOU are in control of your Christmas.
2. Start with a budget
Before you even think about any Christmas shopping check your bank accounts to see how much cash you can actually spare. Remember to allow for any bills you have coming up too.
Once you know that figure plan for how much you’ll spend on presents, how much on food and how much on decorations. Be open and honest with those on your gift list. They may actually appreciate your suggestion to spend less this year.
Rebecca at Unexpectedly Domestic walks you through creating your Christmas Budget here and includes practical and useful tips to make your pounds or dollars go further.
3. Track your spending
Once you have your budget you’ll need to know where you are with it. Track your spending, be it on paper, in a spreadsheet or with an app. This will not only keep you on track for this year, it will also show you how much you need to plan into the budget for next year. Charissa from Change Your Finances has some great printable budget trackers.
4. Cook your own Christmas food
Stay debt free this Christmas by planning your Christmas food in advance and cooking at home.
The supermarkets are great at selling us on the idea that we need their cakes, mince pies and trimmed turkeys. In actual fact many things sold as Christmas food is just normal food with a bit of spice, lots of packaging and a marketing campaign.
So ditch the pre-packaged stuff, and support your local greengrocer and butcher by buying fresh ingredients locally and cooking at home. Your wallet and your waistline will both thank you.
For some useful tips to have a lovely Christmas dinner on a budget check out this post from Land of Milk and Money.
5. Avoid the ads
Everywhere we turn in the run up to Christmas we are bombarded by ads trying to convince us to buy more and nicer stuff. More decorations, more gifts, more treats, more food…
If we believe the advertisers, these are all necessary to have a nice Christmas. Except they are not.
Remember that your goals and the goals of advertisers are opposite. They want you to spend your money. You want to keep more of it.
It will be good for your mental health and for your budget to disconnect as much as possible from this marketing barrage. Avoid the shopping centres if you can, limit your time on social media and turn off the TV. Be intentional and in control of the messages you receive and you’ll have a better chance for a debt free Christmas.
To get some positive messaging as an antidote to all the Christmas consumerism check out this excellent round up by Joshua Becker from Becoming Minimslist – The Helpful Guide to a Simple Christmas.
6. Get outside for free
Your best option for free activities is to get outside. It may be cold (if you live in the northern hemisphere), but the Christmas season is the perfect time to wrap up warm and get out. Not only will you burn off some Christmas calories, you can also enjoy some wonderful experiences.
Go for a walking tour of your neighbourhood to see the Christmas lights, explore the local park to see the berries on the trees or get out into nature on a frosty morning to witness the beauty of a landscape glistening with frost or snow.
Bring along a flask of mulled wine or hot chocolate to warm up afterwards. This always tastes much better when you’ve earned it. The National Trust has plenty of ideas for winter walks HERE
7. Have a gift wish list
Being smart with your budget doesn’t mean missing out on nice things. It just means prioritising what is most important. Help your loved ones by preparing a list of what you would really like, and have them make lists too.
You’ll know your money isn’t being wasted on rubbish that will be re gifted or end up in landfill. It’s best if you agree a budget ahead of time that works for everyone. Be honest if you can’t afford to spend much. You’ll most likely be helping your friends and family to have a debt free Christmas too.
8. Learn a new skill
Use the holiday season as an opportunity to learn a new skill. You could save a lot of money by making gifts or decorations yourself.
Look for the opportunities where your base ingredients are free or low cost, yet the finished product is expensive. For example you could easily spend £50 on a lovely Christmas wreath for your door. Or you could watch some wreath making videos on youtube and then make a similar wreath from natural materials for free.
Other examples of things you can make are baked goods or handmade creams.
Beware of crafts where the raw materials typically cost more than the finished product. Knitting falls into this category. Nice yarn can cost more than a finished jumper, so whilst it is a great, relaxing hobby, it isn’t great for saving money.
Check out this tutorial for making your own stunning, luxurious Christmas Wreath
9. Block access to debt
Put the plastic on ice. Freeze your credit cards. Yes, literally.
If you are not going to cut them up entirely at least make them difficult to use. Take a tub of water (or better still, sticky syrup) drop your credit cards in and pack them in the freezer.
Then delete your payment details from any retailers where you’ve saved card details. The harder you make it for yourself to spend, the less chance you have to make impulse purchases on credit.
That’s the simplest way to have a debt free Christmas. Only buy what you can pay for in cash.
Above all don’t be tempted by payday lenders and promises of low or zero rate loans. You can find yourself with huge interest rates later, which will make your purchase WAY more expensive. Some lending can even cost more than the item itself!
Save yourself a major headache down the line. Only buy what you can afford NOW.
10. Share family gifts
If you have a large, extended family rather than buying lots of individual gifts think about something the whole family could share. Sharing a game, a day out or a food hamper could be a lot more fun than getting a pair of socks or tie.
11. Cultivate your mindset
The biggest predictor of how wealthy you will be is not your starting point in life, but the thoughts in your head.
If you truly want to be free of debt and move towards financial freedom you need to start with your mindset.
This doesn’t mean thinking and dreaming about money. This means educating yourself on how to earn, invest, save and grow your money.
The best gift you could give yourself for Christmas could be financial education. With the right knowledge you can be sure that all your Christmases will be debt free.
Money Nuggets have 10 great books to get you started. Many of these have helped me on my journey to financial freedom, and a few others have just been added to my reading list. Check out these Money Mindset books
12. Make a savings plan for next Christmas
The good thing about holidays and birthdays is that they are predictable as they occur at the same time each year. This gives you a whole 12 months to plan ahead.
Get 2021 off to a great start with the right money habits. Start by reading my post with the 7 best money saving blogs to follow (in addition to this one of course!)
Start a separate savings account for gifts and holidays that you put some money into every month. That way when Christmas rolls around you are ready and you are not hit with a big, sudden expense.
I hope that you feel encouraged to take control of your finances! Remember to subscribe to my newsletter as part of your wealth building strategy 😀
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