5 Options to Avoid Debt Next Christmas

A client of mine recently mentioned that he had dropped $7,500 on gifts this Christmas.  That’s a lot of money.  This man has a large family, and he had a very good business year. Maybe he was making up for leaner Christmases during covid, or perhaps he wanted to celebrate a great increase in the volume of his business.  Either way, he spent a lot of money.

5 options to avoid debt next Christmas with a Christmas background

Americans tend to spend more money on Christmas presents, food, decorations, and trees than they have saved, and wind up dealing with after-Christmas debt each January.  Here are some numbers that illustrate this:

Average spending per couple$1,864
Average money spent on each child$330
Average cost for a Christmas tree$200
Average after-Christmas debt$1,242

 If you are an average family who spends $1,864 all-in for Christmas, you need to save $155 per month to avoid being in debt in January. Of course, you do not have to spend that much on Christmas, and you should not unless it fits into your budget.  Whatever amount you decide that you can spend for Christmas 2023, you should start saving now.  That is easier said than done, and it is unlikely to happen without plan. 

What are your options for starting to set aside money now for Christmas 2023?

  1. Christmas club account. Christmas clubs allow you to set aside an equal sum of money each week, month, or paycheck. Money cannot be withdrawn without penalty until November.  The interest rates are on the low side; however, the plan is simple, it pays interest, and payments can be deducted from your paycheck.  This was popular when I was a child, and I had such an account for many years.
  2. Opening a savings special account just for Christmas.  The idea is the same as the Christmas club, but you have access to the money at any time. So, you must be able to resist the temptation to withdraw the money for other expenses that arise during the year.
  3. Creating a sub-account in an existing savings account.  A sub-account allows you to save money for special events, such as Christmas, by automatically transferring money each month or pay period.  To learn more about savings sub-account: https://www.iwillteachyoutoberich.com/blog/tip-using-sub-savings-accounts-for-unexpected-expenses/#:~:text=What%20is%20a%20sub%2Dsavings,each%20of%20my%20sub%2Daccounts.
  4. Budgeting the money.  If you have great self-control, you can simply budget the amount you need and not spend it on other things.  Most people don’t have that much self-control so another option will work better.
  5. Buy presents throughout the year.  This is the strategy that I employ.  I start shopping in the summer for gifts for my eight grandchildren.  This allows me to pay for gifts a few at a time. This method works well, if it is done in conjunction with a budget.  You must track your spending and stay within your budget.

Budgeting is important to manage your finance and control your spending on all categories.  If you struggle with budgeting, I have many blog articles on creating budgets under the Finance tab.  I have also published a Bible study, Honoring God with Your Money, to help you learn and implement godly principles of money management.

Author: Susan Elizabeth Ball

Author of the Christian Bible study, 'Honoring God with Your Money,' and three Christian novels, 'Restorations;' 'Reconciliations;' and "Letters to Mother from College." Small business consultant, former pizza restaurant owner, wife, mother, grandmother of 8.

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