Friday, December 30, 2016

After Christmas Planning : Christmas WIthout Debt Series

Christmas is over for another year, but it's time to start planning for next Christmas if you want to be able to put together a debt free holiday a year from now.

Very first thing to do is take stock of what you used this year.  How much gift wrap.  How many cards.  How much did your grocery bill go up because of special foods or baking?  How much did you spend on new clothes for holiday get togethers, gifts, and anything else related to the holidays.  Figure this amount out.  Be prepared for shock because in 2016, the average family spent nearly $1,000 on gifts alone.  (And for this exercise you will be figuring in any other expenses related to the holidays, including airline tickets home, etc.)

Take the number you received from that exercise and divide by 12.  That is how much you need to set back (or spend) each month to not have to put anything on your credit cards next year.  Just like back-to-school, Christmas is not an unexpected event, therefore it is NOT an emergency, and so you should NOT use your emergency fund to finance any of it.  Just like for school shopping, put this amount of money back each month -- or use that much each month in the event you are purchasing gifts, airline tickets, etc.

I don't recommend buying gift cards to set that money back.  I have a whole post on that topic, but   in January you don't know what stores might have taken out bankruptcy by the end of the year, where you can find the best price on the latest item -- or even be able to find that item.  (Remember how hard it has been in the past to find Cabbage Patch Kids, Furbys, Tickle Me Elmos, and more?  What if you bought gift cards to Toys R Us, but Target has the toy you want in stock?)

Because following the Christmas Without Debt plan, you will have spent money on Christmas this year, all you need to do is some planning the week after Christmas.

Come after January 1st, we'll start using some of the money you are setting back for Christmas at those after Christmas sales.  But for now, just take stock of how much money you spent, how many Christmas consumables you purchased, and jot all this down to keep track for next year.

You CAN have a Christmas without debt next year!

1 comment:

  1. That's a really good point about not just setting aside gift cards.