10 Steps to Avoid Christmas Credit Card Debt

It’s coming. I know we don’t want to admit it; we’re pretending that it’s still months away. It is, after all, only October. But you know how it goes: Halloween is here as quick as you can say “Frankenstein,” and then you’re carving the Thanksgiving turkey, and then Bam! All of a sudden it’s December. (Note that the older you are, the faster this chain of events occurs).

That’s right, Christmas is coming, and more specifically: Christmas shopping, Christmas traveling, and Christmas entertaining. Anything Christmas-related that costs money. And if you wait until December to buy your gifts, your credit card is sure to take a bigger hit than if you get organized and start now.

Our 10-step plan below guarantees a calmer, less costly Christmas – one that’s free of credit card debt. The payoff? Thoughtful gift-giving that doesn’t leave you in the lurch AND a $0 credit card balance come January 1.

Step #1: Eating in is the new eating out

Rather than charge $40 at a restaurant for one meal for you and your family, stay in instead. Try making a fun and frugal meal at home, like pizza. Just buy a premade crust at the store, and get the family involved in arranging favorite toppings before throwing in the oven. For a healthy twist, try whole-wheat crust, low-fat cheese, and fresh veggies or even fruit. Throw in a movie or a board game and you’ve got some quality, cost-effective family bonding time. Do this once a week until Christmas, and you’ll save about $360 (assuming $10 for each pizza you make at home).

Step #2: Forego the fancy coffee

You know those yummy $3.85 lattes made by the barista who knows you by name? Giving up one of those a week until December 25th will save you $42. That might not sound like a lot of money, but think of the nice gift you could buy for someone on your list for that amount.

Step #3: Prioritize pampering

While getting a haircut is a good idea to gear up for a month of party-going and family gatherings, do you really need the dye job too? And why not paint your nails at home instead of shelling out for a mani / pedi? These two ideas alone will save upwards of $100.

Step #4: Make a list and check it twice

Staying organized will help you feel calm and collected during the holidays. Start by creating a list of all the holiday-related expenses you can think of. Include the following:

  • Gifts (see Step #5 and #6 to simplify this list)
  • Entertaining expenses like alcohol and food
  • Party-attending expenses like a new dress, shoes, or cab fare
  • Decorating expenses like the tree, the tree trimmings, candles, etc.
  • Airfare and other travel expenses

Don’t underestimate costs; keep taxes, shipping, and any small extras in mind (remember you have to pay to check bags on flights now). Check in with your budget once a week until Christmas to make sure you’re on track.

Step #5: Suggest a gift-giving game

Instead of feeling pressure to buy separate gifts for each of your five cousins, three aunts, two uncles, and seven nieces and nephews, why not suggest that everyone bring one gift to the family gathering? Set parameters on the gift (like it can’t cost more than $30, has to be gender-neutral, and has to start with the letter “S”). Then, have fun drawing numbers out of a hat and choosing one present each to open. There are a lot of fun gift-giving ideas like this out there, and almost all of them ease the burden on your pocketbook while providing plenty of entertainment. Potential savings upwards of $100.

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Step #6: Give as a group

Does you child’s homeroom teacher really need twenty separate, small gifts (some of which are duplicates)? Why not spearhead a group gift-giving effort instead? Ask everyone to pitch in $5 and the recipient will end up with a single, quality item. This can save you at least $15 per group-gift recipient.

Step #7: Bargain hunt

Is $29.95 really the best deal you can get on that set of pajamas? Because you’re starting your shopping now, you still have plenty of time to answer that question. This goes for airfare and other travel expenses, as well as gifts. Make it your goal to only buy something if you find a special deal on it. Surf the internet to price compare, check your credit card for affiliate partnerships, and engage in some old-fashioned coupon-clipping. Don’t forget to troll eBay, Craigslist, and Etsy. Savings will easily exceed $50.

Step #8: Redeem points

Now is the time to check how many points you’ve accumulated on your credit cards, and cash them in. You might be able to get cash back, a gift card, or a credit to your account. Redeeming credit card points can be worth $50 or more.

Step #9: Cash in coins

A penny saved is a penny earned. Put any jingling change you have in your pockets at the end of the day into a Christmas savings jar. When it gets full, take it to a coin-counting machine (there’s usually one in your local grocery store). Or put the jar full of change under the tree on Christmas morning as a present to your kids. They’ll find no end of uses for all those coins, and also learn how saving a little each day adds up to a lot. Saving just $.50 of change each day will add up to $40 by Christmas.

Step #10: Don’t forget what’s it’s all about

Try to keep the bigger picture in mind during the season. The holidays may feel all about crowds, gifts, shopping, and stress, but remember that you don’t have to spend one dime to still enjoy time with family and friends. And if you don’t get everything exactly right this holiday season, just remember that you’ll have another opportunity to do it all over again in 12 short months.

The above steps could save you over $750. But the true value of a stress-free Christmas and a debt-free New Year? Priceless.

What’s your trick for easing the burden on your credit card during the holidays?

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