A Cash Only Christmas

I was kind of amused by some stories on the news today about people's "Christmas credit hang overs." My simple answer is that if you don't have credit cards, you won't go into credit debt to buy Christmas presents. Then the first weeks of January, you can actually look forward to a happy new year instead of getting that sick feeling in the pit of your stomach as soon as the credit card bills start rolling in.

If you want to be able to enjoy Christmas next year instead of getting onto the nauseating "buy gifts you can't afford, celebrate Christmas only half-heartedly because the other half of you is feeling sick over the amount you put on your credit cards, wake up in January and wonder how the heck you are going to be able to make your minimum payments" roller coaster, here's some simple steps:

1. Beginning with your January budget, divide the amount you want to spend on Christmas next year by 12. Put that amount of money (1/12 of the total) into your budget under a Christmas category. When your paycheck comes in, put that money in an envelope marked "Christmas gifts".


2. Put the envelope away but remember that you can use all money that ends up in this envelope throughout the year to buy Christmas gifts.


3. Each month, as you find things on sale that may make a good Christmas gift for someone on your list (you do have a list don't you?), pick up the item, pay for it out of your Christmas gift envelope, then safely store the gift until next Christmas.

This system works out well for quite a few reasons. First, you are putting aside actual cash for Christmas instead of waiting until the end of the year then charging everything on your credit cards. Second, it sets a budget for Christmas spending--no money, no buying presents. Third, it gives you the opportunity to shop throughout the year so you can pick up some really good sale items as they come available, instead of trying to cram all of your shopping into a couple of weeks before Christmas which often forces you to pay top dollar. And finally, by shopping throughout the year, you can roll into December in relative peace and serenity--no battling mall crowds in order to buy dozens of gifts--they are already waiting for Christmas in your closet!