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31st October 2022 · 11 minute read

Published by The Real Debt Guy

  • Spending
  • Budgeting
  • Social pressure
  • Debt
  • Lifestyle
  • Debt problems
  • Money

How to stay out of debt at Christmas

10 Tips for a Debt Free Christmas

It’s that time of the year again…You’ve already started seeing the supermarkets casually putting the Christmas decorations on the shelves or assigning a whole area for this purpose. You know what this means don’t you? Present buying, kids homing in on the latest toys, secret Santa, Christmas nights out, all of this is about to be begin!

A lot of people feel pressured to go all out, even if they can’t afford to! Maybe it’s because they feel the need to impress a partner, or just want to make sure the kids have a Christmas to remember.

But at what cost?

We at TRDG do not want to see anyone struggling financially in January because they’ve overindulged this Christmas. So, here are 10 tips to help you stay away from debt and still enjoy your Christmas.

Let’s go!

Tip 1 - Have a budget and stick to it…

One of the key reasons that people end up in a bad financial situation after Christmas is because they have a "spend now, worry later" attitude. This is a no no! You need to honest with yourself about what you can afford to spend at Christmas. If you spend without keeping tabs on how much you’re spending, that’s a sure-fire way to end up with a nasty shock when you open your Credit Card bill in January. We totally get you may want to make sure your kids and your family have a great Christmas but be sensible.

To avoid stressing about your financial situation all the way until next Christmas, use our budget planner to calculate how much money you have in your Christmas pot.  Allocate an amount to each person you want to buy presents for, any Christmas parties you intend to go to etc. Do not exceed the amount you budgeted for!

If you do it this way, when January comes around, you won’t be starting the year with a bumper bill to work off. If you’re really shrewd, you may even have some of your Christmas budget left. That’s a W!

Tip 2 - Spend only what you have…

It’s very easy to get caught up in the Christmas spirit. However, if you’re using your credit card or any other form of credit as your financial means; with the mindset of, “I will pay it off in January”, you’re missing an important point.

The reason you're using your credit card as your means to purchase is (in most cases) because you cannot afford what you’re spending money on. If you could afford it, there would be no need for credit.

Remember, most companies pay people’s wages earlier before Christmas so, if you’re living paycheque to paycheque, January could be particularly difficult as you could be waiting five weeks for your next wage instead of four. Unfortunately, your expenses may not wait for that, so it’s critical that you take that into account as well.

The bottom line: Make sure your spending is based on what you have and not on what Mr Banker can loan you!

Tip 3 – It's not a competition...

A common trap people fall into (but may not like to admit) is to spend to compete or keep up with others.

A member of your friendship group has just announced that they will be going on a winter cruise and have extended the invite to everyone else in the group. Everyone’s in. It’s just you left to commit. You know you can’t afford it; but your partner really wants to go and so do the kids. You’ve worked hard all year and it's been tough, you could do with a break! More importantly, you don’t want to be the one left out. Your Barclaycard is sitting there calling to you....


This is not what you planned for and not what you can afford. You may feel you’ve worked hard all year so it justifies the break, however, your break will be short lived when you’re welcomed back to reality and working even harder to pay of the credit card debt.

Trying to keep up with Joneses is slippery road to financial difficulty. Now we mention that, check out our article Keeping up with the Joneses? How to take control of your spending.

Tip 4 - Less is more (how much does it cost)...

Your partner

Never feel pressured to buy expensive or large quantities of gifts. We’ve seen on more occasions than we care to mention one person in a relationship spending extravagantly, trying to impress the other. Any gifts or gestures should never be based on price, they should always be based on meaning. Some people in relationships feel pressured because of the expectation of their partner. Others cave to societal pressure, whilst their partner has no expectation of extravagant gifts at all!

End the year on the right note. Be honest with yourself and your partner by setting realistic expectations from the start. If your relationship is heavily dependent on money and material items, you may need to decide if it this is what you want and need in life.

Your children

It’s not just your significant other this applies to. Our children can often lead us down this road too. Don’t buy lots and lots of unnecessary gifts for your children, especially young ones. We get it, when you love someone so much, you can’t help but do everything you can to make them happy.

Just remember, young children find so much joy from the smallest gifts. Before you buy, ask yourself what’s the real reason you’re making the purchase. Is it because your child really wants it and its affordable or is it you that’s the instigator of the purchase?

Christmas dinner

Finally, if you choose to host Christmas dinner, remember no one wants to eat leftover Turkey for a week. Don’t feel pressured to buy enough food to feed an army. If you can’t afford to pay for all of the food, don’t feel embarrassed to suggest that everyone attending bring a dessert. Most people will be more than happy to chip-in, they are not blind to how expensive the festive season can be.

Tip 5 – Do you have to buy everything before Christmas?

This tip is gold, but most people find it difficult to do. That is to purchase and give gifts after Christmas. What? You might be thinking, read on you’ll see why this is a great tactic.

People generally feel gifts need to be given and opened on Christmas day. We totally get that, it’s the magic of Christmas. Waking up on Christmas morning, opening presents in your pyjamas. It’s all part of the fun! Do understand that Christmas Day has been completely commercialised. It is not a day where Christians all rush to church, it has become a day where gifts are the focus.

Therefore, you should be aware that retail companies look to maximise on earnings during this period. They know a lot of people will be spending money at this time because they feel they must. That’s why manufacturers like Microsoft or Sony release a games console, or certain games, leading up to Christmas and spend a lot of money on advertising around then. It makes good business sense.

Change your mindset, don’t fall in line with a commercialised process, especially when you cannot afford to.

The Real Debt Guy

What happens after Christmas day?

The sales begin, Boxing Day, January sales…. Prices start plummeting. The retail companies know that spending will decrease after Christmas and may still have high stock levels, so they try and entice anyone with a little bit of money to spend. So why not purchase the costlier items after Christmas. Your family members can still open the less costly items on Christmas day, so the fun is still there. There’s nothing worse than paying more than you need to for the same item. Also, who would complain about another day of present opening?

Change your mindset, don’t fall in line with a commercialised process, especially when you cannot afford to.

Tip 6 - Spread your purchases out...

Christmas spending doesn’t all have to be done the week before Christmas. Monitor your finances during the year, buy a few gifts whenever you feel you have a bit extra money in your pocket. Spreading the cost of present buying over a longer period of time can help keep you away from the temptation of using credit at the last minute because you don’t have the money available at short notice.

On top of that, you might catch a few sales during the year that might not be available around the Christmas lead up. Black Friday and Cyber Monday are prime times for you to grab a bargain.

The week before Christmas can be spent sipping mulled wine and nibbling on mince pies!

Tip 7 – Does your gift need to be physical?

When you’re on a budget and you have a family with children, costs start adding up. Parents know how it is, you try and make sure you spend the exact amount on each child or buy the same amount of presents for each child. Otherwise, you may get accused of favouritism!

Now there’s your partner (if you have one) you may think you know what your partner would like by guessing. However, there’s nothing worse than paying a lot of money for a present to find it still unused in a draw or cupboard months later.

This is the time to be creative. Arrange a day out or a trip away for everyone to enjoy together. A nice getaway in a cottage or even a day go-karting can work out a lot cheaper than buying physical present after physical present. These experiences can give your family something that a game console or a handbag can’t. Family memories…funny moments, happy moments, these last a lifetime. We can’t say the same for a game console or a handbag!

Something that you spend minutes to buy can take you months to pay back.

The Real Debt Guy

Tip 8 – Get your hands dirty...

There's nothing more valuable in this world than time. The time you spend on someone by making a present means more than just buying something off the shelf or ordering something online. A painting, a song, food or a patchwork quilt, anything that will mean something to the person you are giving the gift to.

It doesn’t always have to be Louboutin this or Prada that. The time and effort spent walking into a shop, purchasing the product and then walking out again, does not come close to the time and effort spent making a present.  Never feel embarrassed to say, “money is tight, so I made you something”.

Something that you spend minutes to buy can take you months to pay back. Whichever way you look at it, time will be spent you just need to decide how you use it.

Tip 9 - BOGOF

Buy one get one free! 3 for 2!

These offers and similar can really help you buff your gifts out and help with your Christmas food bill. Let’s say you are buying beauty products as an example. Look out during the lead up to Christmas for the 3 for 2 offers or the free gift with a purchase offers. People who are very savvy can make up some people’s presents on offers and freebies alone.

Offers, like the ones we have mentioned, can give you little presents for an extra person.

With food it’s not about buying cheap it’s about buying smart. Again, look at what offers are around that can remove a few pounds off your food bill. Remember, it’s not the quantity but quality that’s important when it comes to the food you put into your body. Never feel pressured to impress people at the expense of a financial issue.

And finally...

No good person wants a loved one to struggle financially to buy them a Christmas gift!

The Real Debt Guy

Tip 10 – All I want for Christmas is...

What do you want for Christmas?

If people asked this very simple question more, less money would be wasted, and a lot of people may be in a better financial position. We get the whole element of surprise, however, there is nothing worse than spending a lot of money on something that you really cannot afford. To then have a conversation like this -

“Are you going to wear that watch I bought you?’ response “Oh yes, I’m just waiting for the right occasion”. Which means “if I leave it in the drawer long enough hopefully, he/she will forget he/she bought it”.

You might have it in your head that you want to purchase something expensive to give as a present, but the receiver may have their eyes set on something a lot more affordable. You won’t know this if you don’t ask!

Asking this question can also help with planning and budgeting, you should know where you are at financially. If you cannot afford to buy the present the person is asking for, tell them! Don’t feel embarrassed. No good person wants a loved one to struggle financially to buy them a Christmas gift!

Don't forget to read The Real Debt Guy's final thoughts below!

The Real Debt Guy's final thoughts.

The festive period can be a real test of your resolve when it comes to spending. You may not be just spending money on your partner but also your children, parents, brother, sister, nephew, niece; the list goes on. If you’re not careful, your spending can get out of control, and you may not realise this fact until January. Not the best way to start the year.

Take control of your spending by using our budget planner, giving you a true picture of your financial situation and help you budget for Christmas correctly.

If you are struggling do not suffer in silence, we have a whole section that is designed to provide you with the tools to get yourself back on track. Head over to our I need help with debt section and start taking action. You can learn to speak about financial difficulty by reading our article specifically about this by clicking here.

Remember you are not alone, our community section is here if you ever need it.

Simplifying complicated matters.

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