A debt free Christmas starts in January. I know we just finished Christmas and this may seem a little late but really it is just in time! January is the perfect month to start a system that I promise you will relieve some Christmas and overall stress.

Less Stress

Do you ever feel like Christmas sneaks up on you out of nowhere! We all know its coming, in fact, it is the same exact day every year. But how do we allow ourselves to get caught so off guard? I was always the last minute person. Mainly my issue was I didn’t really want to go out and deal with Christmas crowds in the first place. I am that person that could care less about Black Friday shopping unless I can do it online in my home! Besides the crowds, the other issue was the amount of money I had not planned in my budget to just come up with all at once.

I honestly can not remember when I came up with my idea to have all my Christmas shopping done before December, but it has completely changed my anxiety towards the holiday. And even if you love shopping for Christmas in December with the Christmas music playing and fighting crowds in the Black Friday frenzy, this system is still going to help you.

I start this process every year in January to allow me as much time as possible to be prepared, but it will make a difference no matter when you start. By following this process you too can have a debt free Christmas.

Make a List:

List out everyone you are buying gifts for this year. Don’t forget to include, if any, people that are not family but that you are acknowledging in some way. Whether those are teachers, co-workers, hairstylist, etc. Next to everyone on your list put the maximum amount that you want to spend on each person. If I know I want to buy my daughter an art set I write it down. I have included a Christmas Gift List you can print to get started.

Budget:

Add up the total amount you wrote to spend on each person. Is that number kind of daunting? Do you wonder how you manage to spend that when you never really planned on it in the first place? Credit Cards. For the majority of people, credit cards become our best friends during the Holidays.

But now you are going to budget for it and will not need that credit card for gifts. Now that you have your amount, divide it by the number of months you have left until you want to be done with shopping. For myself, I like to be done with Christmas shopping by November.

So if I am starting in January that gives me 11 months to save. For the sake of easy math, let’s say my list adds up to $1,100. I need to save $100 a month. I can even break that up by paycheck to be $50 every two weeks. That is so much easier to come up with instead of $1100 all at once!

Plus you will have this money readily available and not have to use a credit card. This will ensure your debt free Christmas!

Debit Card for Ease

Let’s take it up a step. I have written a post about the 12 accounts I have and if you read it you may have seen one of those is a Christmas account. In order for this idea to really work, I opened up a checking account solely for Christmas. Every month I put the $100 in this account. I have the card labeled and is only used to purchase gifts and items for Christmas. The great thing about this is that it is not getting mixed up with your everyday money and you can control it better. Also, because you have this card on you and the money already set aside you can purchase gits when you see a great sale or something that you know someone on your list would love!

Create a Stash

Do you have an extra closet somewhere to stash gifts? I had heard of this concept a few years ago and it’s actually great. We had a small catch-all closet but I cleared a space to put gifts I would find throughout the year. Sometimes it works out great when you are invited to a last-minute Christmas gathering or a neighbor stops by unexpectedly with a gift and you want to return the gesture.

Birthdays Too

Expand a little:
You can also use this exact concept for Birthdays. Make a separate checking account and debit card for birthdays. Start by making a list of everyone and the date of their birthday. Divide this up by 12 months and start saving. I am lucky that I do not have many January Birthdays, but if you do you may have to tweak it a little to meet your needs. This also helps ensure no more last minute shopping and if I need to mail a gift I have plenty of time! You can read more on the subject of Birthday gift planning here and snag a free printable.

Tell me what you think. Do you think this system would work for you? Are you excited to try?