Debt Free Christmas

(This post may contain affiliate links. Please read my disclosures for more information.)


According to CNBC, 28% of shoppers are still in debt from last Christmas! What I want to know is whether those shoppers have a plan in place so they can do better this year. I’m sure they long for the peace and joy of a debt-free Christmas.

Christmas can be tough on your budget, especially when your income is lacking.

Trust me, I know all about tiny incomes and frugal budgets. We spent many years WAY below poverty level when my husband and I were both college students, and my husband just worked a part-time internship with lousy pay. Between my two babies and school, I couldn’t work at all.

BUT, there is good news! With a little bit of advance planning, you can rock that frugal Christmas budget.

If you’ll apply just a few of these suggestions now, you can actually pay cash for your Christmas outright. You can have a fantastic, debt-free Christmas! Think about how great that will feel in January!


Here are my best tips for a Debt Free Christmas:

1. Plan ahead and start saving NOW for Christmas.

You want me to start thinking about Christmas already? Yes! The only time better than now is last month. Like maybe even January, immediately following the previous holiday season. If you save all year, Christmas won’t hit your pocketbook very hard at all.

The easiest way to save money is to cut out frivolous spending. Start by cutting out small luxuries you’ll hardly miss, like restaurant meals, pedicures, and the gym membership you never use. All of those things are pretty easy to do at home, and can save you hundreds each month.

You could also downgrade services you pay for monthly, like your mobile phone plan, cable, or anything else that you pay monthly. Downgrading one service at a savings of just $20 a month can get you some nice cash for the Christmas shopping season. Downgrade several services and you could save $100 a month!

Get in the habit of paying yourself first. Set aside money for savings out of each paycheck, just as you would pay any other bill, before you start spending. Check your financial institution for a dedicated savings account — they usually have a pretty high APY. That way your money is working for you (you are paid interest) instead of for someone else (you are paying interest).

Save in advance, spend less, and only purchase what you can afford to pay cash for so you won’t have any debt after Christmas. Even if you have to cut back on gifts, what you do buy will mean more. Then start next year right, with zero debt, and start putting away money in January for the next Christmas.

2. Set a Christmas budget, then make your gift list.

A budget will be your most useful tool for helping you to stay out of debt. Sit down well before Christmas and hash out a Christmas budget you can afford. Be sure to include Christmas decor and food, as well as gifts. I personally like to do this early in the year, so I can shop sales all year round.

I make a list of all the people I’m buying for in a google spreadsheet, along with the amount budgeted to each, and list potential gift ideas beneath their names. As I purchase gifts, I check them off on my spreadsheet.

With eight kids of my own, plus our large extended family, this helps me stay organized, so I don’t buy duplicate gifts. It sounds silly, I know, but I have accidentally purchased duplicates before, since I buy all year round, and I barely remember what happened last week, let alone 8 months ago.

A list helps me to remember all the people I need to buy for, and it helps me to be more thoughtful and deliberate about gifts. It stinks to realize on Christmas Eve that I’ve forgotten someone, or that I have a really expensive gift for one child, but not the rest. Kids do notice and keep track of those things. There is nothing like accidentally overspending on one person to make me feel the need to spend that same amount on everyone else, which quickly obliterates my frugal Christmas budget.

Another perk of a well-planned list and budget is that it makes Christmas shopping easy!

3. Shop for Christmas all year long.

Once your list is prepared (hopefully well before Christmas), begin watching for sales. Since you know what you’re looking for, you can keep your eyes open for sales on sporting equipment, shoes and clothing, housewares and other fun sales all year round.

Some of my favorite types of things to buy after Christmas are wrapping paper, bows, ribbon, gift tags, stockings, Christmas lights, and Christmas decor. I’ve found fantastic Christmas items for up to 90% off on the clearance racks a couple of weeks after Christmas.

I don’t really enjoy Christmas shopping. Throughout December, I try not to even do very much grocery shopping because the stores are so chaotic. I do enjoy driving past Walmart, Target and the mall, where every parking spot is filled, and knowing that my shopping is already complete and that I saved myself a whole lot of headache, time and money by getting it done early.

I don’t even have to go inside those crazy places, and I can instead spend my time making memories with my little people.

4. Give handmade Christmas gifts.

If you are a crafty person, handmade gifts are an AMAZING way to stay within your budget. The best part about making a giving those gifts is that your loved ones really appreciate the thought that went into the gift. Sharing your talents, whether culinary, artistic or myriad others, is like sharing a bit of yourself.

Handmade gifts have become my kids’ favorite part of our holidays. If you need ideas for handmade gifts that will be loved and appreciated, check out the fabulous ideas on this Handmade Gifts Pinterest Board.

I’ve found that the love and care that go into our handmade gifts also help us to feel the spirit of Christmas better, as we more eagerly anticipate giving. One year, with a brand new baby, I didn’t have the time or energy to make any of our gifts, and the whole season just felt blah. I wasn’t excited for Christmas morning because all of our gifts had come from the store.

5. Keep Christmas simple.

One way to simplify is by giving fewer gifts. If you have a large extended family, set up a gift exchange in lieu of giving each person a gift. Someone draws names out of a hat, so each person involved just gives and receives one gift. We do this at my family Christmas Eve party, and it’s become a fun tradition that we all look forward to.

We do our gift exchange a little different. We call it ‘Dirty Santa’ and we place all of our gifts on the table in the center of the room. We then draw numbers. Number 1 goes first, chooses a gift from the table, and opens it. Number 2 can choose a new gift, or take the gift from number 1. Each gift can only be ‘taken’ 3 times. We usually get a lot of stealing and even more laughs and fun.

You can also give fewer gifts to your children. You’ve probably seen Dudley’s birthday scene from Harry Potter. It kind of makes me sick to my stomach to watch how piggish and ungrateful he is about his gigantic table full of birthday gifts.

A few years ago, a friend shared with me the 4-gift rule: something you want, something you need, something to wear and something to read. We use that rule (mostly) and we also try to make sure that one of the gifts is a shared, family experience, like ski lessons for everyone, or season tickets to the symphony or theater. Experiences have been our families most meaningful and memorable gifts, and they don’t clutter my house or end up at Goodwill or the dump.

We all want our families to really remember the reason for Christmas anyway, and that shines through best when we keep everything else simple.

6. Use rebate and coupon apps to save money.

If you haven’t yet started using rebate and coupon apps, you’re missing out on a lot of free money! These apps are super easy to use and pay you cash back for things you were going to buy anyway. It’s a no brainer!

Ibotta is a free, easy-to-use app that allows users to easily earn cash back on purchases made both in-store and online. It’s the third most used shopping app, right behind Amazon and Ebay. Ibotta users receive cash back on products and services from both online and in-store retailers.

Get a $10 bonus just for signing up with Ibotta through this link.

Ebates is another cashback website that offers different products and partnerships from Ibotta. Between these two apps, you can save money on pretty much everything you buy! I tend to purchase more groceries using Ibotta, and clothing, housewares, and electronics through Ebates.

Sign up for Ebates through this link and get a $10 bonus.

7. Increase your income with a side hustle.

Just think of all the time you waste in waiting rooms, lines, and during your kids’ soccer games. I like to put all of that normally wasted time to good use earning money by taking surveys or performing other online tasks. I use several different survey sites, so I always have a couple of surveys waiting for me. The more you join, the more opportunities you’ll have to earn. Several of them pay with gift cards, which I like to save up and use as gifts. Others pay with cash, once you meet their minimum threshold. Use the links below to get free bonuses for signing up!







8. Start a blog to make extra Christmas money.

How to Start a BlogAs a homeschooling mom of eight, I needed a way to make good money (not just chump change) from home, with flexible hours. I started my blog and never looked back. Blogging is fun, flexible, creative, challenging and the sky is the limit as far as income is concerned. I highly recommend it to all of my friends!

If you’ve been thinking of starting a blog of your own, check out How to Start a Blog in Less Than 15 Minutes! Honestly, it will take you less than 15 minutes to get a blog of your own up and running, plus the investment is tiny. Web hosting will cost you less than $3 a month, and you can get a free domain with the purchase of hosting.

Now blogging isn’t quick money. You won’t have Christmas paid for next week or even next month with blogging. It takes a couple of months to work up to making a significant amount, but it’s sure great once you get going, and it’s long-term income, so it can pay for many Christmases to come!

Related Reading: How to Start a Blog in Less Than 15 Minutes

9. Teach English With VIPKids for extra holiday cash.

Make money from home; work at homeVIPKids: I have four good friends who teach with VIPkids, an online teaching service that connects teachers and young students in China with a fully immersive English education. Teachers earn up to $22 per hour and work from home, according to your own schedule. My friends love teaching for VIP Kids!

The only drawback is that most of the hours are either late at night or early in the morning because you’re working on China time. You also have to have a decent internet connection. I looked into this very seriously about a year ago, but my internet connection (VOIP is all that’s available because we live in the boonies) is too slow.

To become a teacher, you need to have a bachelors degree or be a junior or senior in college. Course materials and lesson plans are provided for you. If you like teaching kids, this just might be the career you were looking for!

10. Use a cash back credit card and save up your rewards to pay for Christmas.

***Note: This only works if you pay your balance in full each month, otherwise you will pay tons more in interest than you will earn in cash back. 

We opened our Discover card way back in college, and still use it as one of our primary cards. Most purchases only earn 1% cash back, but Discover offers 5% cash back on revolving categories. I think the category is currently home improvement stores, but often around Christmas the category will be amazon and other online shopping retailers.

We primarily use the Discover to pay only for things that fall in the bonus category. We also use a couple of airline miles cards, and I’ve sort of learned how to alternate all of the cards to get the most bang for my buck. I use one credit card to pay for groceries, because it gives us 5 miles for every dollar spent. I use a different card to pay for gas, for the same reason.

We put everything we can, from utilities to farming supplies, on our credit card in order to maximize our rewards. We travel frequently for free with all of our miles.

I also like to cash in my Discover cash back reward just once a year and use it toward Christmas or a fun vacation, and if you’re strategic about how you use it, you can save up a really sizable chunk of change. We average about $900 a year cash back reward from our Discover card, plus hundreds of thousands of miles from our other credit cards.



I hope you’ve found a few new ideas to implement before the holidays arrive.  Each of these suggestions is pretty simple on its own, but when you combine them all you’ve got some powerful tools to help you fund your Christmas season.

I know it’s several months away, but the earlier you start, the better off you’ll be. Try these out and you will be amazed at how fast these add up to extra spending money for the season!

Make the commitment, do the work, and give yourself the gift of a debt-free Christmas and financial peace this year! I’m betting that it will feel so great, you’ll want to make it a lifelong habit!





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  1. I totally agree with you on everything. I have even done most of these tips. Thank you for a great reminder to be more wise on spending!

    D,xo || from

    1. Amy Saunders says:

      Good for you! I hope you’ll continue!

  2. I love this… but I have to say 2 things aren’t the greatest … #1 is I love the idea of creating a budget and start saving now but it just never works for me. I just have to plan then buy, bulk budgeting (this paycheck we’ll buy… lol). Also starting a blog to get extra money before Christmas … we all know it doesn’t go that easily for most. If it did for you (less than 3 months) Please tell me your secret! 🙂

    1. Amy Saunders says:

      That’s great — everyone budgets their own way! You’ve found something (bulk budgeting) that works for you! And I know what you mean about blogging. I only made about $100 a month (by creating sponsored posts) until 6 months in, when I finally started making a decent amount from affiliates, and then was able to apply to mediavine and start making decent advertising revenue. So you’re right that it’s not immediate Christmas money, but it can absolutely be more long-term Christmas money, especially for people who think of their budgets that way. I plan for Christmas and holidays, birthdays and vacations all year long, and my blogging money, even though my blog is only about 9 months old, is really helping to boost that budget category, which is why I included it. It’s not immediate money, and it’s not easy money, but it’s great money for a SAHM with limited time!

  3. These are definitely great tips! I buy throughout the year as well, and thankfully have never gone into debt for Christmas gifts. We follow the “three gift” rule in our immediate family. Something you want, need, and wear or read for each member. We tell our extended family to run their gift ideas for our son (and soon to be daughter due in December) by us so that we can approve it. We like gifts to be meaningful and/or useful and not something we want to just get used up and given away in our next toy purge. This has worked well for us so far! 🙂

    1. Amy Saunders says:

      I like that you have your family run gifts by you for approval. It sometimes feels like our toy room gets SO full and as I’m purging I swear that I didn’t buy most of the gifts in it!

  4. All great ideas. For a few years, I did really well with buying gifts throughout the year. I haven’t done that this year, but I DO want to start looking now.


    1. Amy Saunders says:

      Now is a great time! The earlier the better, in my opinion, so the holidays can feel relaxed and fun instead of stressed and busy. Have fun!

  5. Madison at The Weaver Fam says:

    These are all such great tips! This year is our daughters first Christmas and I know as she gets older the Christmas bill will keep getting higher. Trying to keep Christmas as budget friendly as possible!

    1. Amy Saunders says:

      Yes, kids definitely get more expensive as they get older!

  6. Shopping all year long is so important! You can find amazing deals in the off season.

    1. Amy Saunders says:

      I agree! I do practically all of my shopping year round so that I’m pretty much done with Christmas by October and I can just enjoy the holiday season stress-free.

  7. This is such excellent advice, because paying off Christmas debts – or debts related to paying for gifts and NOT paying bills – causes regrets and takes away from the joy of Christmas. I especially like the first five steps , and out of those, I make a lot of gifts every year, and I think setting the budget and THEN shopping is especially smart.

    1. Amy Saunders says:

      We make lots of homemade gifts, too — and have fun doing so!

  8. These are great tips! Last year I paid for half my Christmas gifts with gift cards earned completing surveys. It was a great feeling.

    1. Amy Saunders says:

      I agree, it is a great feeling! I think I would dislike Christmas altogether if it resulted in a mountain of debt.

  9. Amber Stanfield says:

    I love the idea about getting the kids something that they can experience rather than just gifts. This is such a great idea and is really a gift for the whole family if everyone gets the same gift.

    1. Amy Saunders says:

      Experiences are usually our families favorite Christmas gifts. Last year we bought everyone skis and ski lessons, and now they can’t wait for it to snow! And the best thing about experiences is that they don’t clutter up my house!

  10. I am definitely gonna check out the Ibotta app! Great post!

    1. Amy Saunders says:

      I love easy apps that save me money!

  11. Oh my goodness did I ever need this!! I am THE biggest procrastinator when it comes to Christmas and then I find myself stressed out!! We just yesterday entered into contract to buy a house and we close on Nov 2nd so I am going to use this info because it is so close to Christmas and putting money into a house is going to make things tight!! Thank you for this!!!

    1. Amy Saunders says:

      Congratulations on your new house! That is so exciting!And good luck with your debt-free Christmas!

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