26 Weeks Till Christmas

Breaking News … This year … Christmas will be in December! 

As you probably know all too well, the holiday season can be a major financial drain each year. Many of us don’t budget or plan for holiday spending throughout the year.  The result is that Americans whip out the plastic for Christmas spending and use credit to finance Christmas costs.

A survey from Magnify Money indicated that: 44% of shoppers racked up more than $1,000 in holiday debt last year and 5% accumulated more than $5,000 in debt. 

Paying off those balances can take months or even years. Only half of those surveyed expected to repay the debt within 3 months. Almost a third of the survey participants (29%) said they need more than five months to pay it off, often leading to growing balances on their credit cards and lots of money wasted paying interest. More than 10% of people surveyed said they would only be able make minimum payments on their credit cards. 

So let’s go thru a real life example of Christmas credit card debt. If the shopper spent $1,054 on Christmas and pays a minimum payment of $25 each month. He will be paying down the balance from Christmas 2019 till 2025. With an average interest rate of 15.9% the consumer will pay $500 in interest – that’s half of what they spent initially. And if they take on an extra $1,054 in debt every Christmas, the amount of money wasted paying interest grown exponentially.

It is easy to understand why the number one fear of people during Christmas is debt. Unfortunately, people willingly put themselves in that position. There is no law requiring us to overspend at Christmas—it’s a choice we make!

That’s not what Christmas is all about. Do you think the Lord wants us to celebrate the birth of Jesus by taking on debt which takes years to pay off?

That’s why we’re talking about Christmas in summer… because we are 6 months into the year. It’s not too late to start saving now to avoid the Christmas debt. You still have 5 months to build a Christmas nest egg.

Now I can hear a lot of you thinking that you can’t possibly save 1/5 of your Christmas costs over the next 5 months. So my question to you is “How can you possible afford to pay for all those Christmas costs PLUS INTEREST in the months and years following Christmas?”

The reason so many people get into debt for Christmas is simple—they haven’t planned ahead. They haven’t saved or given thought to how they may be able to creatively reduce the cost of Christmas. If you haven’t already developed a budget for Christmas do it now and start saving money to avoid the Christmas debt trap and eliminate the post-holiday stress.

Our cost savings plan for Christmas is that we do not exchange gifts with each other. That may make us sound like scrooges but we aren’t.  Our priority is to go places and have experiences instead of collecting more stuff. At this point, our ability to travel is so much more important to us that simply buying things.

We already have enough stuff and we don’t really need anything so why should we rack our brains trying to come up with a unique idea that neither of us really wants?

And we don’t need to spend money to prove we love each other. We have a strong marriage and a good relationship and we don’t need a holiday to remind of us of how important we are to one another.

The other reason we don’t buy each other gifts is because we have a limited amount of money and higher priorities. The more we avoid spending on non-essentials, the more cash we have left to fund the goals that are most important to us.

Don’t put your important long term goals at risk by spending money buying gifts people don’t want or need. You probably have much higher priorities. Once your priorities are in order, keeping the Christmas spending under control becomes easier.

Start by figuring out how much you spent last year for Christmas, including travel, parties, special meals, gifts, decorations, etc. Divide that total by the number of paydays till Christmas. The result is how much you have to save each paycheck to have a debt free Christmas.

If things are tight, decide to cut down on the number of gifts you’re giving until your finances are in better shape. Instead of trying to buy gifts for each person, decide to draw names and each person buys for one other person. Now is the time to have the discussion with other family members and friends about cutting back on Christmas spending–they will probably be as relieved as you are to simplify things.

We had a mom share with us her simple formula for Christmas gift giving.

Each child gets 5 presents:

• Something to wear
• Something to share
• Something to read
• Something they need
• Something they want

This family discovered how to keep their Christmas spending in bounds with their budget.

As a family focus on the real reason for the season—to celebrate the birth of our savior. Make a commitment to focus on the spiritual side of Christmas by centering on celebrating the birth of Jesus.  Now is the time to discuss how you can do that–otherwise you are into the holiday season and it is too hard to change what you’ve always been doing.

The most important thing you and I can do is to remember why we’re celebrating Christmas—the birth of our savior, Jesus Christ. In the busyness of the season, it takes an intentional effort to focus on the true meaning of Christmas, to have a spirit that’s ready to worship the Christ of Christmas.

Start that journey now by prayerfully making the commitment not to go into debt this Christmas. The only gift anyone really needs at Christmas is the Baby Jesus.

Tune into the Compass catholic podcast for more on how to prepare financially for Christmas.