One of the reasons that Americans have runaway credit card debt is because of Christmas shopping. Each year, we as a country spend way beyond our means to get our loved ones that "perfect" gift. I remember the first year my sister was married she and her husband actually took out a loan in order to buy everyone in our family (and we have a large family) a Christmas gift. When the next Christmas rolled along, they were still paying for the Christmas presents they purchased the previous year. That's insane!

My wife and I figured there was certainly a better way to celebrate Christmas than going deep into debt. In fact, our very first Christmas together we limited ourselves to one gift each...and it couldn't cost any more than $20. Our reasoning was that we already purchased what we really needed during the rest of the year, so why should Christmas be a license to go crazy and spend a ton of money we didn't have? Besides, we were broke, so that's all we could afford. We certainly didn't spend beyond our means that year.

Since then, we set a budget for each Christmas. Once we hit that dollar amount, we're done Christmas shopping, no matter how many gifts are under the tree. These are a few ways we keep Christmas costs under control and celebrate a very frugal holiday:

1. Set a budget for Christmas shopping, and stick to it!

2. Shop around for your holiday meal, just like you would for presents. Ham is usually pretty cheap this time of year, but you can still get good deals on turkey. One year, I received a duck as my Christmas bonus at work, and that was our Christmas meal. Yes, you read that right. A duck was my Christmas bonus.

3. Only buy gifts for immediate family (those that live in your home). If you are visiting relatives for the holiday, consider a name swap, secret Santa or just buy a small gift for the kids.

4. If you really want to watch your spending, you could also set a spending limit PER GIFT, and limit the number of gifts.

5. Once you set your spending budget, pay for everything in cash. NO CREDIT CARDS, and certainly don't take out a loan to buy Christmas presents. I still can't believe my sister did that.

6. Send Christmas cards and family photos to your extended family. I suppose you could send the good ol' family newsletter, too...or you could just make a phone call on Christmas day, which I think is better (I get unlimited long distance).

7. Remember, nobody is going to love you less because you didn't buy a specific Christmas gift. I can't even remember what I got last Christmas. Really.

8. Focus on what Christmas is REALLY all about (it's not the presents).

9. If you're crafty, try making a few gifts yourself. Gifts don't have to be purchased at a store. My grandmother used to make her own Christmas ornaments, and she gave them each year as gifts. I still have a few on my tree this year, and some of them are more than 30 years old. Now, THAT'S the gift that keeps on giving!

The one thing that my family splurges on each year is our tradition of seeing a movie on Christmas day. We started this back when it was just my wife and I and we had nothing else to do that day, and we noticed the movie theater was open. We weren't the only ones there. Christmas is a HUGE day for movies. We have been going every Christmas since then, and we usually see a family movie. This year, it's going to be National Treasure II. It beats sitting around the house and watching It's a Wonderful Life for the 378th time.


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