How to enjoy the holidays without going into debt

This is a tough one for many people. Overspending is rampant in November and December as we prepare for and enjoy our friends and family over the holiday season. But it comes at a cost. Have you heard of Blue Monday? It’s the day in January when your credit card bills come in and you are faced with the sad reality of what the previous couple of months of festivities have cost in real, hard dollars. The good news is that you can reign in the spending without missing out on the reindeer. And still enjoy the holidays in a big way even without going into debt.

For this article, I’m focused on the Christmas holidays as that is what we celebrate but we share much love with those that are celebrating other holidays as well and some of this might pertain to your festivities also.

Why do we overspend each year during the holidays?

Love – we love our family and friends and want to shower them with gifts and a great meal and a fancy cocktail.
Gratitude – we are coming out of the season of Thanksgiving where we focus on how grateful we are for all that we have. We enter the holiday season feeling abundant.
We Deserve It – after all, we work hard all year so when the end of the year comes, we want to do it up big.
Generosity – those around us are great gift givers and we want to return the kindness.
Advertising – since I work in this field and it pays for my holiday festivities, it’s hard to add this one but let’s not kid ourselves… there are a kazillion ads in November and December all plying for our hard earned dollars. (sorry, I do prefer to and mostly work on non-retail categories)
Invisible spending – do you really register how much it is at the cash register when you just tap your credit card? Or are you talking with your spouse and just know that you’ll pay the bill later?
Black Friday, Cyber Monday – what used to be a one day sale has turned into weeks of not very significant discounts.
End of year – Often the end of a year means that bonuses are coming or just the perception of closing one chapter of your book to open the next. This leads us to be a little more reckless than normal.

What can we do about it?

Over the years (especially the years that we’ve struggled financially) I’ve come up with a ton of ways to make the holidays fun without spending a ton of cash. They fall into 4 main categories:

Plan it out
Stick to your budget
Sharing is caring
Take advantage of free/low cost holiday activities

Plan it out

There are two parts to this. I know it sounds a little geeky but I actually do a workback schedule for November and December. This way our little family gets to feel the spirit of Christmas for a long season with less stress. I search out all the free/low cost activities and block those in, then add what needs to be done at home. Here’s an example:

November

Week 1 – a little shopping but since this is before Remembrance Day we don’t do anything else holiday related

Week 2 – After Remembrance Day, we kick off the holidays by putting up the decorations and trimming the tree

Week 3 – Holiday craft class, Gift wrapping and start baking

Week 4 – Christmas Parade, keep baking, Christmas cards

December

Week 1 – Christmas Play, gingerbread house making

Week 2 – Christmas Movie Night (invite friends/family), any last minute shopping

Week 3 – Christmas Carols, party at XX house, wrap the remaining gifts

Week 4 – Christmas Eve at XX, Christmas Morning with XX, etc…

The second part of planning it out involves budgeting and saving. The holidays are one of those once-a-year, predictable large expenses that should be pre-planned for. Remember how we feel about debt? If we know it’s coming and we know how much we want to spend then we can save up for it in advance so that we don’t have to use credit to pay for the holidays. This could look like this:

In January, you review your spending from November/December on holiday activities and gifts. For the sake of simplicity, let’s say it costs $1,200 over and above your regular monthly expenses.

Now, we want to tuck $100 away every month starting in January straight through to the end of the year… there’s your $1,200 all ready to spend in November and December. You likely wouldn’t have missed the $100 per month but it will take away the sting of seeing the large credit card bill or even worse… paying interest on that credit card bill because you can’t pay it all off right away. Don’t forget, we avoid paying interest on debt at all costs as that’s just money down the drain.

Stick to your budget

This is the hard part. You estimated what you would like to spend for the holidays. What do you do when little Billy tells you that he wants the latest gaming system for Christmas and it’s outside of that budget? You don’t buy it (don’t worry, if you’re a good budgeter and you can afford it, you’ll be getting little Billy that gaming system for Easter instead).

You do not have to buy everyone what they ask for. Let me repeat that. You do not have to buy everyone what they ask for.

Everyone has a different gifting philosophy. I tend to gift according to what I can afford so one year, if money is tight then everyone may get homemade gifts and that is ok. The next year, if money is more plentiful then I spend more on each gift. Being a single mom, I just can’t match some people’s gifting. My heart wants to but it’s not always possible.

You know that Breakfast with Santa at the fancy hotel down the road? If you can’t afford it, then don’t buy tickets. Sure, it’s probably great, but that doesn’t mean that it fits into your budget. There are so many activities during the holidays that you can just choose something else that is more affordable and enjoy that instead.

For entertaining, remember that folks often want to contribute to share the cost of in-house celebrations… go for it. Make it a potluck, have people byob. If it means that you can all be together, then that’s perfect. Just do it. People get to show off their great dishes.

Sharing is caring

The holidays is about the birth of Jesus and sharing time together, rather than buying expensive gifts. A great article that I re-read at the beginning of each holiday season is Joshua Becker’s “10 Simple Christmas Truths we Need to Remind Ourselves Every Year”. I alluded to this above when I mentioned the potluck. The great part is that you don’t have to shoulder all of the costs in order to enjoy time with your loved ones. Here are a few ideas:

Share the cost of larger gifts with others. If you have a great idea for Mom and Dad but it’s outside of your budget, encourage your siblings to share. They probably didn’t know what to get them either.
Potlucks are our friend. I love a good potluck. You can host this way without having to pay for everything. You bring the festive decor and music, maybe the main entre and some punch then they can bring a great side and cocktails if they want them. Or a potluck cocktail bar is fun. Or a potluck desert bar or even a potluck appy bar. All are fun, don’t cost your guests very much and make it more varied.
Do you have a great living room with a big screen? Then maybe invite all the kids over for a holiday movie night? Ask all the parents to bring a movie snack to share. This is super affordable, gives the other parents a night off and brings all the laughter into your home. This works great for a couples movie night or a ladies movie night too. Or games nights – also great and affordable!
Volunteer and/or donate to your local Christmas bureau. Pick a child’s name from the list and take your kids out shopping for a gift for others. Or get a group together to spend a couple of hours packing toy boxes at the warehouse or serving food. Giving is what this season is all about and it helps your family to keep it in perspective as there are many people who are doing without each winter.

Take advantage of free/low cost holiday activities.

There is no end to all the free or low cost activities that will contribute to a great and joyful holiday season.

Sing Christmas Carols at a local church. Many churches will open their doors for a singalong in December. It’s no cost and fills your heart with the joy of the season.
Shopping malls have started offering free classes. This year they had wreath making and card making classes at one of our malls for free, including all supplies!
Take in the parades and light-up events in your community. Santa comes to visit, there are often plenty of free activities on site. It’s super joyful to see the big tree lit up and you truly feel like a part of your community.
Fill your mugs with cocoa and check out the Christmas lights, whether on foot or in the car, those folks that go over-the-top to bring the joy really do want you to visit and see their displays. Sing along some holiday tunes in the car while you go from one place to the next.
Attend the school holiday play. It’s often corny but man those kids work hard to do their parts to bring together a good show for their parents and friends.
Movie nights. I already stocked up on popcorn and treats, we’ll be enjoying at least 1 holiday movie a week from now until December 25th. There are usually enough on Netflix to keep us entertained but you can also borrow from the library or buy and keep a collection of special ones that you watch each year. You can make that a family gift under the tree to add to your collection for next year.
Take in the holiday fundraisers. Where we live, there are two main ones. Christmas tree displays that are sponsored by different organizations so they’re super creative. The other is a themed Gingerbread House competition that you can view and vote on. Bring a few dollars to donate to the charity and enjoy.
Gingerbread house making / or cookie decorating. This is a great couple-hour activity that everyone in the house can participate in and then enjoy eating later in the season.
Tree Trimming party. We make an event out of tree trimming. We play holiday music and serve special treats and take our time enjoying all the old decorations that we’ve collected over the years. Our tree is eclectic and not fancy and we love it.
Go skating with Santa. Most communities offer something along these lines. It’s for kids big and small and gets you out and active.

I could keep going but it’s a little different in each community. Just keep your eyes open and take a leap if it’s an activity that you haven’t done before. Until you try it, you won’t know.

I hope that this article left you with some ideas of how to keep yourself from overspending and putting yourself in debt to pay for the holidays. Even if you take this season to learn and keep optimizing in future years, you’ll be happier for it. Celebrate the season!