December 25, 2018

Our First Debt-Free Christmas

Posted in: Debt-Free Living, Story of Us

Our first married Christmas was actually our first Christmas together ever.  Even though we had dated for five years prior to that, it was difficult to spend holidays with each other’s families since they lived in different parts of the state.  We were brand new to buying Christmas gifts as a married couple and we didn’t plan well for it.  We used our Christmas bonuses to buy gifts for everyone our first year and that was also the last time because we didn’t like relying on money that wasn’t guaranteed to buy Christmas gifts.  Some of you are probably thinking, “Christmas bonuses are the only way we can afford to buy Christmas gifts!”  I challenge you to try something different for next year.  Imagine using your Christmas bonus to get out of debt or for that vacation you’ve been dreaming of for years instead.  Imagine using it to help people other than yourself.

After spending what we thought was way too much on Christmas gifts our first year, we decided to set a reasonable budget and save up throughout the year to pay for gifts.  After all, Christmas is more about Jesus’s birth than trying to give hundreds (or even thousands) of dollars worth of gifts to each other.  Our entire Christmas budget is less than some people spend on one child and that makes me cringe.  If you can afford it, that’s one thing.  However, most of these people are already thousands of dollars in debt and they continue adding debt by overspending on Christmas.  Here are three things we do for Christmas every year:


Decide what dollar limit you want and can afford to put on gifts for Christmas.  Our limit is $30 per person because we have a ton of people to buy for each year and we can buy nice gifts for $30 without feeling guilty about spending too much.  We also never want to go into debt to buy gifts.  It’s kind of a game for us to come under budget, so we always look for deals throughout the year to save money.


We start a sinking fund for our Christmas budget each January and add a little money from every paycheck.  You know Christmas is going to be in December every year, so the best way to avoid going into debt to buy Christmas gifts is to set a budget and start saving for it.  Once you decide your total budget, divide it by the number of paychecks until December and that’s how much you need to put away each time you get paid.  Just make sure you don’t tap into that budget throughout the year or you will be right back where you started.


We have always given a little something each year, but giving just feels different when you’re debt-free.  Dave Ramsey says that giving is the most fun you can have with your money and we have definitely found that to be true this year!  We usually put whatever money was left over from our Christmas budget toward debt, but now that we’re debt-free, we wanted to use the extra money to bless others.  This year, we came in a few hundred dollars under budget (thanks to sales and bartering) and we were able to seek out opportunities to bless other people.  We were able to buy gifts for children who would otherwise not receive Christmas gifts, give Christmas bonuses to people that help us throughout the year, and give gift cards with encouraging notes to people that didn’t expect it.  We have already started talking about how we can do more next year and I am so excited!

I know it’s a little late to plan for Christmas 2018 since it is Christmas Day, but I hope this will motivate you to start planning earlier for Christmas next year so you can avoid going into debt around the holidays.  When you focus on the true meaning of Christmas, it’s a lot easier to resist the urge to spoil your friends and family with lavish gifts.  My prayer is that reading this will encourage you to rethink how much you spend on Christmas.  I hope it makes you uncomfortable to think about it because getting out of your comfort zone is what ignites change.

How do you plan for Christmas gifts?  Tell me your thoughts in the comments!

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