CNBC reports that 28% of credit card users are still paying off last year’s holiday debt, that 86% of millennials overspend during the holiday season, and that the majority of Americans feel pressure to overspend on those they love during the holiday season. Terms like “debt,” “overspending,” and “pressure” imply that these statistics tell a negative story about the average consumer's decisions during this time of year. While it is unwise to spend above your budget or take on debt for gifts, I believe it also reveals a broader societal or moral pressure to purchase extravagant gifts for the most important people in our lives. This is a valiant aim, but, as with most things in life, there is a cost, and I would argue that it is too great for most people. This willingness to sacrifice to be generous demonstrates love and kindness, two fruits of the Spirit. However, another fruit of the spirit is self-control, and striking a balance between the emotional pull of giving and the reality of debt/overspending is how true financial peace and generosity can be cultivated.

On Paper On Purpose

Dave Ramsey often says, “Christmas is not an emergency – it comes every year.” Though obvious at its core, this statement is meant to affect a change in behavior. Saving for Christmas in December can start in January’s budget. Budgeting isn’t about limiting joy; it’s about planning for it. Starting at the new year, decide, either by yourself or with your spouse, how much total money you want to spend on Christmas gifts, and then divide that total by 12 (months in the year). Your first number might not make sense in your monthly budget on the first try. Slide the scale and find the number you can afford.

This number should be all-inclusive. It accounts for gifts, postage, wrapping paper, and all the purchases that come with your fantastic gift ideas. Once we have our total, comes the part that is easier if you are single and more complicated if you are married. List all the people you want to buy a gift for. Mothers, fathers, children, grandchildren, and whoever else you desire to bless with a gift. Even more challenging is to give each person a dollar amount to spend on themselves. Once all is said and done, the total of all persons’ numbers should equal your agreed-upon total.

How Debt Affects This Plan

If you are in debt, your budget is already severely limited by the minimum payments on your credit cards, auto loans, and other outstanding debts. How, then, do you act generously in this reality? This is an answer each person must make for their own household. The sting of debt becomes particularly apparent during the holidays. We yearn to bless our loved ones, but in the same vein, dig ourselves a bigger hole when we spend money we don’t have or allocate dollars towards others that would have otherwise been paid on debt principal. Some common solutions, not in any order, are:

-        Buy no gifts. This is for those who are extremely committed to escaping the clutches of debt. This is challenging for most because it feels selfish. I would argue that this method seems selfish in the short term but opens the door to extreme generosity when you are free from debt later.

-        Cheap/Free Homemade Gifts. Perhaps you know how to crochet and have a lot of yarn on hand. Maybe you have the ability to whittle or have always wanted to learn. Perhaps you have the artistic ability to draw or paint. There are many creative, personal, DIY gift options. Remember, thoughtful does not always mean expensive. Maybe host Christmas at your house and feed everyone for $100 as a gift. The possibilities are endless.

Of course, there are many combinations of the above options. Shorten your list of people to buy for and spend less on those you choose to buy for. Only buy for your household and find DIYs for everyone else. Whatever decision you and your spouse reach, make sure it’s intentional and mutually agreed upon.

Guard Your Heart and Your Wallet

The societal and moral pressure will feel heavy during the Christmas season. There may be people who shame you or be confused by your dramatic choices. Keep the Faith in God (which is what Christmas is truly about) and, in the process, pay off debt through the snowball method. Matthew 6: 19-21 states, “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.  But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” Shut out the criticisms of this world and look to the affirmations of the King of Kings.

Avoid tempting holiday deals, “buy now, pay later” scams, and other marketing ploys. Trust the plan you made and pay cash. Then, once the holiday passes, plan ahead again for next year. Take the lessons you learned from this year and aim to be more generous next year once your debt is gone. Incorporate the Christmas sinking fund and make next year completely stress-free.

Wrap Up (Pun Intended)

How we spend our money reflects our priorities. I would argue that we all want our families to have valuable memories of family time and fun traditions rather than some flashy gift. Generosity is not measured by price tags but by how we treat others and how we spend our time. Finally, Christmas is about the birth of our savior, Jesus Christ, not the gifts that take attention away from him. If you find yourself in the midst of holiday stress and need to create a budget, reach out to one of our financial coaches. God bless and Merry Christmas.