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Watch Now: Reset your money in 2021.

Getting Out of Debt? 5 Conversations to Have Before Christmas Gets Here

This is the year you finally decided to get out of debt. Way to go!

But wait—what about Christmas? It takes the average person anywhere from a few months to a few years to get out of debt. If you’re serious about changing your family tree, your Christmas might need a few tweaks here and there. But don’t worry—you can still enjoy a Merry Christmas without having to break your budget.

Giving is some of the most fun you can have with money! You’re supposed to enjoy giving, but how can you enjoy it when you’re racking up debt? Fortunately, you don’t need a maxed-out credit card to celebrate the spirit of the season. Christmastime is all about spending time together with the ones you love and not comparing your experience to a picture-perfect Christmas on social media. Real life is filled with messy tinsel and homemade handprint ornaments, after all.

How to Have a Christmas of Contentment

Get on the same page with your spouse

Before you do anything else, make a big pot of coffee and sit down with your spouse. Get on the same page about how you want Christmas to look this year. Remember, you need to take control of your money together. This is a team effort that will only work if you’re both on the same page.

Talk about what things you want to commit your time to (like volunteering in your community or the company Christmas party) and the things you don’t want to spend your time doing (like keeping up with the Joneses and being pressured to host and cook Christmas dinner for 40 people).

Then, discuss what your Christmas budget will be this year. You still have time to start a Christmas fund! Figure out what your total Christmas budget is this year, and then set aside a little bit from each paycheck. Our free EveryDollar budgeting tool can help make this easy for you.

Get creative with the gifts you exchange with each other. Maybe you save for a nice date night with your sweetheart instead of traditional presents. What about giving the gift of no debt at Christmas time? Just make sure your goals are achievable.

And as you talk, unleash your creativity but rein in your spending. Remember, this year isn’t about going overboard with the debt and outdoing your neighbor’s Christmas light display—it’s about sticking to the budget and getting out of debt as fast as possible.

Give the kids a heads up

After you’ve talked through the Christmas budget together, call in the kids and explain how Christmas might look a little different this year. This shouldn’t be a doom-and-gloom lecture—just let them know you’ll be focusing on giving them a few quality gifts rather than a room filled with junky items they won’t play with.

This is also a great way to start the discussion about the importance of giving to others and learning how to be content. Remind your kids what the Christmas season is all about, and start thinking about what the family can do for others.

Some parents buy gifts "from the kids" to give to friends or family. This year, let the kids put in some DIY work and make those gifts instead of buying them. Most grandparents would rather have a homemade gift instead of a toaster oven from Junior that Mom and Dad paid for.

Get creative at the family get together

There are plenty of alternative ways to give gifts to one another. Suggest drawing names of fellow family members instead of buying something for every person in the family. That way, you get to focus on giving one person a special and personal gift. Just be sure to switch up names each year!

Or go the creative route and give each family member a Christmas ornament of something that reminds you of them. You can find inexpensive ornaments on eBay or even make your own for just a few dollars. Get the kids involved and you’ll have memories for years to come!

If it’s your turn to host Christmas dinner this year, make it a potluck. Tell everyone you’ll make the main course, but let them bring the family favorite side dishes like mashed potatoes and green bean casserole. This will relieve some of the stress, pressure and cost that comes with being the host with the most.

Remember, some of your family members will not understand why you want to get out of debt. That’s okay! Just focus on having a good time with them and don’t let anything petty get in the way of having a merry Christmas.

Keep it budget friendly with your buds

You always do a gift exchange with your closest friends. And it’s usually somewhere fancy. This year, scale back the cost while still keeping the fun factor.

You can meet up at someone’s house and enjoy a potluck-style meal together, but you won’t be buying $15 appetizers or $30 knickknacks this time around. Everyone needs a few laughs during the holidays, so why not do a hilarious white elephant gift exchange? Have everyone bring a gag gift they already have laying around the house. The memories made will last longer than any extravagant, frou-frou gift anyway.

They’ll probably love the idea. But if a friend still wants to bless you with a store-bought item, just say thanks and accept it with a grateful heart. Don’t let guilt steal your gratitude.

Give yourself a pep talk

This is simple, but important. Be sure to give yourself a little pep talk throughout the Christmas season. Reassure yourself that you’re accomplishing something bigger for your family. Remember how rewarding it will feel to enjoy Christmas without the burden of using a credit card to fund your fun. If you buy a gift for someone else, but have to use a credit card to do it, you’re just gifting yourself debt. There’s no need for that!

Be proud of yourself for taking this huge step in the right direction. And don’t give up just because the holidays come calling. It’s time to tell your money who’s boss.

You’re working hard to change your family’s financial future! Now how about a little extra fun this season? Enter to win an all-expenses paid trip to Boston for you and a guest—including VIP passes to Dave Ramsey's life-changing Smart Conference!