A Properly Budgeted Christmas

When you don't budget for Christmas, how do you figure out how much you can spend?

Question: Dan in Ohio says he and his wife are still paying off debt, and didn’t budget for Christmas. He asks how much they should spend on family members. What does Dave recommend?

Dave’s Answer: Not budgeting for Christmas is probably not realistic if you want to stay married. You have to balance this out. The trick is you’re going to do a different kind of Christmas because you’re trying to get out of debt. If you have children, you certainly need to budget for them. We won’t get them $10,000 worth of stuff, but they can get something under the tree from Santa Claus.

You also need to budget a little something for each other. But you can have fun with that. You can give a coupon that says you’ll cook tacos three times next year—that’s part of your Christmas gift. Say you’ll do an act of kindness or service for them. Back rubs or something—you can do fun stuff like that and then get a little gift too.

But this idea that happiness comes in a box from the mall? I’ve been in the mall, and it’s not there. Happiness doesn’t have a little franchise store there between Gap and The Limited. Some of you think it’s in there because you’re looking for it, but it’s not there.

You can have a quality Christmas and not spend a lot of money, but you need to do something. You have to make it commensurate with your budget. If you’re making $200,000 and trying to get out of debt, that’s one thing. But if you’re making $20,000 a year and trying to get out of debt, that’s another thing.