Christmas 2010 debt free

Debt Free Christmas 2010

by Ryan Yates

Christmas is coming fast. Yes, I know it’s only January but I heard some disturbing news on the radio this weekend. I’m kind of a news dork and listen to AM radio all the time. I listen to a CBS affiliate that is 100% news. The report I heard was during the “Your Money” section of the broadcast. The “Experts” (I don’t know who the experts are) say that you should work hard to pay off the Christmas debt you’ve amassed during the 2009 season by March 31st. They suggest that we cut back on eating out to be able to afford the extra cash needed to eliminate the debts. Are you kidding me? How about setting up a budget? How about planning for next year? How about actually thinking about your money for a change?

I guess with such great advice from CBS we can all rest assured that they are going the extra mile to give us great advice when it comes to our money. Yes, not eating out is a great way to save money. But my fear is that people will find something else to spend that money on. I believe that if a family does not have a budget that they will not be able to pay those gifts off. Maybe it’s just me, but I don’t have much faith in a person’s ability to just stop eating out without it being on paper on purpose. I guess my view comes from my past life where I use to charge my way through life always waiting for the next promotion, a win fall, or anything else that I could use to pay off debt. I wasn’t taking responsibility for my money, I wasn’t planning ahead and budgeting for future expenses. I was living day to day walking blindly though a financial hell.

That has all changed and I’ve realized that you must have a budget to get out of debt. You must plan for ALL events that will happen during the year. That brings us to Christmas. Christmas just doesn’t pop up out of the blue. It is a scheduled event that happens EVERY YEAR ON DECEMBER 25th. It’s never on November 1st or February 29th, always December 25th. Knowing that you’ll need to purchase gifts, why not plan for it.

If you believe in Christmas and participate in the event then you need to set aside some money to fund it. Starting NOW in January will make it a very simple process. Imagine waking up on November 26th this year and having a pile of CASH to spend on Black Friday. Imagine walking into the stores during December and being able to use CASH to make all your Christmas purchases. Imagine looking at a credit card statement in January of 2011 and seeing that you owe nothing for Christmas. Sound good? Of course it does. I’ve done it that last two years and let me tell you it’s GREAT!!! Brad at Enemy of Debt wrote a wonderful article about the subject of having a Debt Free Christmas, he’s been an inspiration to many people and I recommend you take a few minutes to read it.

Set up a Budget

I recommend that you step up a budget first. There are a ton of resources on the web to help you do this.

Web programs:

  • BudgetPulse has a FREE budgeting program that you can use to set up a budget. Kyle over at Suburban Dollar gives a great review of the BudgetPulse program.
  • Mint is another free program on the web that lets you monitor your accounts and set-up a budget that you can track online.
  • Mvelopes and YNAB (You Need A Budget) are two popular budgeting programs that will cost you a little bit of money, but provide some great budgeting tools.
  • Budgeting Worksheets

  • Matt over at Debt Free Adventure has designed “A Simple Family Budget Spreadsheet”. It’s a great resource to begin setting up your budget.
  • Brad at Enemy Of Debt has a free budgeting tool for download. The file can be download on Brad’s site or you can click this link “download” to get the file.
  • Almost every personal finance blogger has a budgeting worksheet you can download and use. If you’re looking for more examples, check out my blog role (in the header above) for other great blogs to check out and explore for budgeting help.

    Make a “Christmas Fund” category

    If you have a budget already, make a budget category for the Christmas Fund. Look at how much you spent this past Christmas and use it as a guide. Example: If you spent $500 on Christmas gifts you’ll need to set aside $46 per month for 11 months to reach your goal.

    If you don’t have a budget yet, don’t worry. Take a blank envelope and write “Christmas Fund” on it. Also write the total amount required ($500) and the monthly amount ($46). Every pay check take some cash and slip it into the envelope. Now here’s the trick, DON’T TOUCH THE MONEY. It is not ok to take money from the envelope to pay the pizza guy (yes I know that will effect my income). It is not ok to “borrow” from the envelope to pay a bill or buy some shoes. This money is for Christmas ONLY. If you do see a sale and want to use the money to purchase a Christmas gift, go ahead and do it. Just remember to put the receipt in the envelope for tracking purposes.

    Ok, that was easy right? Yes it was. That’s it. One little step will have you paying cash for Christmas this year and not having to worry about January 2011. Now the amount you spend will vary from the example but setting aside a little money now will go a long way later.

    Good luck and if YOU have any tips please leave a comment so everyone else can learn about the great ideas YOU have.

    P.S. I will continue to remind you about this topic. It is such an important part to remaining debt free that I believe it should be mentioned throughout the year πŸ™‚

    photo from PhotoBucket


    the Dad, Climbing Out January 19, 2010 at

    Amen, brother!
    .-= the Dad, Climbing Out´s last blog ..Let Me Get this Straight Razor =-.

    Jeffrey Kosola January 19, 2010 at

    the Dad,

    For some reason your comments are getting bumped into my spam box. I think I’ve fixed it now.

    How do you budget for Christmas??? Any tips to share?

    the Dad, Climbing Out January 19, 2010 at

    I’m a processed spiced ham product. I have finally arrived. πŸ™‚ No idea why, JK, if you found something please let me know.

    Last year was our first year with our heads pulled from our bottoms and we set aside $20/mo for Christmas. Barely $200, but it was enough and appropriate for our level of debt. This year we are putting $50/mo in an envelope for $600 come Christmas and we are satisfied with that.

    I wrote about this year and how fun it was here:

    .-= the Dad, Climbing Out´s last blog ..Let Me Get this Straight Razor =-.

    Jeffrey Kosola January 19, 2010 at

    Simply AWESOME! I’m very happy you pulled your head out of your backside πŸ™‚ I’m sure the kids will love the extra gifts from Santa this year. We’ve upped ours to $50 a month for this year too.

    Jeffrey Kosola January 19, 2010 at

    Sorry just read your post again. Here it is for all to read. Sorry you had to disappoint all the Christmas light watchers.

    Budgets are the New Black January 20, 2010 at

    Someone’s been drinking Dave Ramsey’s kool-aid! I think that’s why he resonates with so many people: he wakes us up from our financial reverie and usual way of thinking about these things.

    We paid cash for Christmas even though we didn’t technically save ahead for it. We are focused on our snowball so absolutely every “unnecessary” transaction we choose to make comes out of what we put toward debt that month. We’ve been able to overpay on debt $1000-$2000 every month, so we’re fortunate.
    .-= Budgets are the New Black´s last blog ..Does Your Man Like To Push Buttons? =-.

    Jeffrey Kosola January 20, 2010 at

    Yeah, that Kool-Aid tastes great. DR has been a major player in my turnaround. I just wish others in my family would take note of everything my wife and I are doing to get out of debt.

    EXCELLENT job on the overpayments every month. I’m doing the same and boy it feels great. Just imagine everything we can do once our debts are gone. Kids colleges – Check, retirement – Check, Not loosing sleep – Check.

    Samurai January 20, 2010 at

    Yo Jeff! Thanks for highlighting some resources for us.

    Just a heads up, sent you a shout out in my latest post. You are an honorary member of “The Yakezie”, whether you fail in 6 months or not! πŸ™‚

    Jeffrey Kosola January 20, 2010 at

    I just entered your challenge. 200,000 here I come.

    In case anyone is interested in Samurai’s challenge follow the link to find out about it.

    Samurai January 20, 2010 at

    See you in the Top 200,000 in 6 months my brother! We will create a powerful sphere of influence, us little guys! Whoo hoo.

    Matt Jabs January 20, 2010 at

    Thank you for writing this post… now I don’t have to!

    The great and obvious point that sticks out like a sore thumb yet seems to elude so many each year is the fact that Christmas… “happens EVERY YEAR ON DECEMBER 25th. It’s never on November 1st or Febuary 29th, always December 25th.”

    If given the choice between $46/month or huge credit card bills every January, I think most commonsensical consumers would choose the former, yet so many end up practicing the latter.

    Let’s make 2010 different folks.

    Jeffrey Kosola January 20, 2010 at

    Any time you are feeling Christmasy feel free to link to the post πŸ˜‰

    Yeah, up until a couple of years ago I was in the latter section of people. I’m so glad I’ve drank the Kool-aid like @budgets said earlier.

    Mysti January 21, 2010 at

    I have been saying this for years. Christmas isn’t a “surprise.”

    I started selling things on Craigslist, through parenting sites, etc last year. All of that money went into the Holiday fund. I was able to purchase many things early in the year and put it away. And it gave me time to think about what I wanted to do.

    Good luck!
    .-= Mysti´s last blog ..We rocked it! =-.

    Jeffrey Kosola January 21, 2010 at

    I love this Craigslist idea. My wife just started to sell some things on it again. We’ve made a little bit of cash that we are putting toward some clothing upgrades for my son, who’s sprouting very quickly πŸ™‚ Anything left over with end up in the x-mas fund.

    Ken January 22, 2010 at

    I have used Christmas Club at local credit union for years. You select a monthly amount to be deposited every month. It’s automatically deducted from my check every month. Key thing: If you don’t see it, you don’t spend it! πŸ™‚

    Great advice! I’m a DR fan as well. We start FPU at church in 2 weeks.
    .-= Ken´s last blog ..College Rules: Work for Your Fun =-.

    Jeffrey Kosola January 22, 2010 at

    Good point on the Christmas Club. I used one when I was younger but total forgot about it.

    Good luck starting your FPU class. It sould be a blast for you. Have you ever seen DR live? I’ve seen him twice and boy is that a great time πŸ™‚

    Richard @ Debt Assistance August 19, 2010 at

    I find that my job almost always offers overtime during the busy Christmas period of November and December as many people want to take some vacation time and for the last few years have lapped this up until a week or two before Christmas. As I get paid weekly this means my income goes up naturally as my spending does and so I generally manage to come out the other side without any additional debt whatsoever. Lots of companies take on Christmas temporary staff and this can be a useful trick to consider.

    Jeffrey Kosola August 23, 2010 at

    Hi Richard, That is a great way to handle Christmas as long as they continue to offer overtime during the holidays. Thanks for the great comment.

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