How to Avoid Christmas Debt Without Becoming a Grinch … 12 Great Tips

by Joe Plemon on October 6, 2010

  • Were you still paying for Christmas 2009 in July of 2010?
  • Did you have heart palpitations when you received your January credit card statements this year?
  • Has the joy of giving become the duty of giving?
  • Does Christmas giving spark spousal wars in your family?

If you answered “yes” to any of these questions, I challenge you to answer “yes” to this one:  Will you try these tips in order to make Christmas 2010 different? Good for you!

The good news is that you still have time. If you decide today that this year will be different, it will be. These frugal Christmas ideas will help.

1. Make a commitment to avoid debt.

Draw the “no debt” line in the sand and agree with your spouse. Even better, put the commitment in writing and include both signatures.  You will become teammates with a cause.

2. Make a budget.

This is an absolute necessity. It is one thing to make that anti-debt commitment; it is another to know how to create budget and actually do it.

3. Cut back on other holiday expenses.

Do you entertain during the holidays? Do you travel? How about a holiday vacation? If these expenses cause you to create debt with your giving, start paring back. Remember that “no debt” vow.

4. Start saving today.

The sacrifices you make in the next two months could allow you to avoid Christmas debt. No eating out, for example, could be a way to save hundreds of dollars.

5. Spend cash for gifts.

Put your budgeted cash into a “Christmas giving” envelope, along with your budget. Don’t buy ANYTHING unless you have the cash to pay for it. If you shop online, use a debit card (not a credit card) and reimburse your checking account with cash from your envelope.

6. Agree with family to give to a charity in lieu of a gift exchange.

My siblings and I (there are seven of us), take turns picking the charity. The charity of choice is announced in late November and we each send a $25 donation to the one who made the choice. We all love this idea: it is not only affordable, but we are giving to a real need instead of buying pointless gifts for each other.

7. Draw names for gifts.

You may get some resistance from those who think they have to buy a gift for every single family member, but ask them to try it for one year. They may be pleasantly surprised at how much stress and money can be saved by simplifying the gift list.

8. Agree to buy bargain gifts.

This might not work for everyone, but because many of our family loves to shop at yard sales, we have a fun challenge to see what types of bargain gifts we can buy for each other. I personally love the yard sale bargains others get for me. If some don’t do yard sales, they could be challenged to buy from a Good Will Mission or Salvation Army Thrift Store. They not only find bargains, but they support a good cause.

9. Make home made gifts.

You will not only save money, but you will provide a more meaningful gift. My brother in law still uses the carry case I made years ago for his Coleman lantern. We love the framed artwork our son gives us.

10. Give coupons.

A certificate good for a car wash or baby sitting or lawn mowing or a date with your daughter or a fishing trip with your son are all great gifts of time. Note: make sure you follow up on actually making sure the recipient “cashes” the certificate. Some feel awkward asking.

11. Volunteer.

I know this isn’t about saving money, but it is about not being a Grinch. It is impossible to serve others without gaining more than you give. My Sunday School class buys gifts for needy families and then delivers those gifts in person. We seldom fail to see appreciative parents and children.

12. Remember the reason for the season.

The holiday is called Christmas for a reason: it is the celebration of the birth of Christ. Make specific plans to participate in this celebration. Attend a Christmas Eve service or a Christmas cantata. When you focus on the child in the manger who became the savior of the world, you cannot be a Grinch. Actually, you could. His heart grew three times its size when he experienced the marvel of Christmas. Yours could too.

The Grinch was no longer "grinchy" once his heart grew

Hmmmm. Maybe being a Grinch isn’t so bad after all.

How does your family avoid Christmas debt without becoming a Grinch?


{ 22 comments… read them below or add one }

joeplemon October 6, 2010 at 7:18 am

Wishful thinking yes. But thinking too much about government spending might turn ME into a Grinch.


Ramona October 6, 2010 at 8:06 am

We have these people in Romania too. Those who make a splash over the holidays and then starve the rest of the year to pay for their debt. I do think these people kinda deserve being poor, because of their bad judgement.

We were a very poor family, when I grew up. Christmas meant a toy and maybe a Christmas tree. When I was a teenager it didn’t matter, so we’d just eat normally and enjoy being together.

Now I am on another ‘level’. We can easily spend as much as needed for the “perfect” holiday. You know what? We don’t. We do prepare some special food for dinner, so that it is a bit set apart from other meals, though we do eat very well throughout the year. And maybe we get a small present. We don’t do trees and stockings, since we’re all adults. Instead of spending money for 2 days, we can save it for a summer vacation or something for the house.

And never in our lives, not even when we were poor, we got in debt for a holiday.

This advice is amazing, keep up these posts 🙂

People should realize that, if it’s too expensive, maybe it’s not really worth it.


joeplemon October 6, 2010 at 8:25 am

I wish I understood the mindset of those who overspend at Christmas and pay the debt for months to come. Are people (parents) trying to somehow compensate for lack of parenting the other eleven months? Do they really believe that going in debt will make the holiday better? I don’t know, but I with they could learn from you: keep it simple!

I love Christmas myself, but in my mind, less is more. The real joy is celebrating the birth of Christ and I don’t think we honor him by creating extravagant debt.

Thanks for the encouraging words. I appreciate them!


Everyday Tips October 6, 2010 at 9:32 pm

Great ideas! I usually start shopping around September so I can use coupons for certain stores and such.

I also save up all my change from the year and cash it in at Coinstar early in December and get an Amazon gift certificate. (Coinstar gives full value if you exchange your change for a gift card.) I then use this money for a lot of presents I send to people out of town.

Finally, my American Express Blue Cash card gives my cash rewards in December, so most of what I charge on the card is paid for with my rewards.


Credit Cards October 7, 2010 at 1:25 pm

I plan to gift home made gifts as they are good to connect and different.
The one who gets it also appreciate the time and hard work spent on it.


Evan October 7, 2010 at 3:57 pm

Building off #4 – Start Saving Today.

The Wife and I will set up a separate ING subaccount and have a few bucks go to it every week, so by the time Christmas comes around we have a good amount of everything paid for.


joeplemon October 7, 2010 at 4:32 pm

Thanks! You brought up three ideas I didn’t consider. Readers: take advantage of these tips!

We do something very similar. Last year our Christmas savings account came up a little short, so we beefed it up a little more this year. I am thinking that by the time Jan (my wife) finds enough “bargain gifts”, we may have saved more than we needed to. Not a bad problem!


Dave@50plusfinance October 7, 2010 at 7:41 pm

Really great tips. Don’t Americans do just the opposite of everyone of your tips? Our family has grown so big, 25 members and growing, that it became financially a mess for all. Thats just the immediate family. The extended family is another 25 more. Not to mention co-workers and friends. Now we just give to the children and not to the adults.

My problems have been waiting till the last minute, not budgeting and not saving for the event. Trying to make progress but old habits are hard to break.

I like your comment on how parents spend more to compensate for lack of parenting during the year. Their overspending is their guilt talking for some lack of parenting.

Also it seems each year there is that new must have toy and you feel guilty not getting it for your kids. If the parents have their priorities right maybe it won’t happen.


Rich with SFP October 8, 2010 at 12:08 am

Great tips! We have done the give to charity in lieu of gifts thing and it is so rewarding. I also am big on the drawing names. That really helps reduce the cost of Christmas. Thanks


joeplemon October 8, 2010 at 8:43 am

Thanks for the kind words. I would like to see you break those old habits this year. Write back and share with us how you did it.

Good to know that others are using these same tips. They really do make Christmas better!


Andrea October 8, 2010 at 10:10 am

Budgeting… it’s so, so underrated! The figure is something like only 26% of adults actually write out a budget and stick to it… pretty shocking really. But it does make a difference.

One thing I have always found helpful is to start in September or October so the big gift shopping experience doesn’t dent all of December pay packet!!


GAYLE MCLAUGHLIN October 8, 2010 at 11:59 am

I love these sensible tips for every person going into the Christmas season. We can celebrate the season without massive debt. Why must debt and celebration of Jesus’ birth and gift -giving be tied to the same subject. Great ideas.


joeplemon October 8, 2010 at 1:15 pm

I have also read that 70% of Americans live paycheck to paycheck, so it doesn’t surprise me that only 26% write out a budget and live on it. I think that somehow the idea of having a budget carries a straitjacket connotation. Not necessarily so. Most people actually FIND money when they develop a budget.

Good point. When you put it that way, it is even more crazy: buying stuff you can’t afford as a way to celebrate our Messiah’s birth.


Barb Friedberg October 8, 2010 at 5:20 pm

I am totally in accord! Keep it simple and for goodness sake, if you can’t afford the spending-give something that doesn’t cost money!


Andrew @ Money Crashers October 9, 2010 at 11:52 pm

I’m all about agreeing to the bargain gifts. Chances are, the people you’re buying gifts for also don’t want to spend a ton of money on you…Just bring it up and they’re most likely to agree. Just put a cap on how much you can spend, like $20 so that it doesn’t become a contest who buys the best present. Just get it out of the way ahead of time and all the pressure is off. Great list Joe!


The Saved Quarter October 19, 2010 at 11:17 am

We’re using a lot of these methods! Early in the year, I set a $100 budget for Christmas and I’ve been blogging about how I’m putting together gifts for 17 people for this budget:

Even though the budget is extremely tight, by taking advantage of clearance and coupon sales, freebie deals, strategically regifting, and making things from scratch, we’ll have a nice variety of gifts under the tree and won’t have debt at the end of it.

It won’t be extravagant but we also use the four gift Christmas model and it works well for our family:

Something you want
Something you need
Something to wear
Something to read
(Plus something from Santa and a stocking.)


joeplemon October 19, 2010 at 11:55 am

Simple and affordable! What a concept.

Somehow agreeing to bargain gifts puts fun back into shopping. Everyone is on the same page and no one needs to feel obligated to spend what they don’t have.

@Saved Quarter,
I read your post and am totally impressed. Other readers: check out how Saved Quarter is managing to buy for 17 people on a $100 budget.

I like the Christmas model poem you shared also. Great way to keep Christmas giving in perspective.


GAYLE MCLAUGHLIN October 28, 2010 at 2:15 pm

With the economy unsteady and with everyone watching every penny, I think these tips are more meaningful than ever. I have been trying to convince my readers to do this. Thanks.


Andrew @ Money Crashers October 31, 2010 at 1:12 pm

Couldn’t have put it any better Joe!


joeplemon November 1, 2010 at 7:34 am



Foam Fabricator November 30, 2010 at 9:39 pm

I love these great tips for my budget during Christmas time. I think its a very smart move to make a ” Christmas giving” envelope and just save money. That way then in December or when ever you may prefer, you can take a day and do all your Christmas shopping.


joeplemon April 15, 2011 at 11:12 am

Planning your finances throughout the year is the best way to handle Christmas spending. A bit early, but Merry Christmas!


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