Thanks for leaving such a great comment. I like what you and your family has done and I love how the focus is on family rather than who got the best or the most gifts. I really have a problem with what Christmas has become in the states. They’re already talking about Black Friday and November has yet to begin!! It drives me crazy!

sadly, I think the present buying has become more about the person buying the gift rather than the person receiving the gift. I remember reading an article earlier this year about Mother’s Day that claimed people in one country loved their mothers more because they spent more on them for Mother’s Day. That is just sick if you ask me! I bet the same mindset is alive and well during Christmas. We generally buy for our parents and the kids in the family and never plan to spend thousands on Christmas no matter how wealthy we become down the road.

Thanks for stopping by!

Your challenge is a great idea; so many people get into debt at Christmas and, as many of your readers have said, Christmas comes every year; thus it’s not an emergency and certainly not an unforeseen one.

I’d never thought of it in this “debt-free Christmas” way but my kids and I decided a few years ago that having fun at Christmas did not depend on spending loads of money. We knew that gift buying is a large part of the Christmas budget; in fact when my girls were small their mother and I spent “loadsa money” on their gifts every year. Now that the girls are older (in their 20s) and wiser, they know as well as I do that spending big bucks on gifts is not the way to go.

So we adopted an idea that I got from my friend Jenny (she was the text editor of my book “Back to the Black: how to become debt-free and stay that way”, so she knows about thrifty living) Her idea: to put a cash limit per person on gift spending.

That first year, we set a spending limit of £10 (about $15) per person. Guess what? It was such a lot of fun, and produced such a lot of creativity, that the following year we cut the limit to £5 per person: “the £5 challenge”.

Sometimes we make gifts; or we recycle unwanted gifts from the previous Xmas, which of course counts as zero spend, or we buy from charity shops or the “pound-stores” that have become so widespread through this recession. And the bonus: if you give somebody a gift that they don’t need or don’t want, it doesn’t matter, because it cost peanuts.

This will be the fifth year of our £5 challenge and I still treasure some of those cheapie gifts that I got three or four years ago!

For some time my girls have spent Christmas Day with my (ex-)wife and they come to me on the 26th. That’s called Boxing Day here in the UK (and in Canada and Australia too, I believe). So, because they have a second Christmas on Boxing Day, they started calling it “Boxmas”. Then, because of the £5 challenge, it became “Budget Boxmas”. I cook us a great meal (well, we think it’s great anyway) and we sing our favourite songs, play silly games, and have a wonderful time without spending a shedload of cash.

Your thread has clearly produced a large following of people who want to have a debt-free Christmas; maybe our gift spending limit would be one way to help them achieve it.

Financial guru Alvin Hall (you probably know of him, as he’s American but he’s high-profile on British TV) is also very aware of the debt problems that can be caused by excessive Christmas gift buying. In a UK TV programme, he interviewed a couple who had a combined income of about £70,000 (over $100,000) but were deep in debt; at the time I think they were about £60,000 “in the red”. He found that part of the problem was that they spent thousands on Christmas gifts every year; not just for family and friends, but even for neighbours too; they’d start buying in October.

So Hall filmed private interviews with the couple’s sons and asked “what’s the best thing about Christmas?” Their answers included going to church on Christmas Night; Christmas dinner; being with family, singing Christmas carols.

“So what about all the gifts your mum gives you?”

“Well, they’re nice too.”

Then in January he interviewed some of the friends and neighbours who’d received gifts from the generous couple, and asked if they could remember what they’d received. Nobody could remember.

Needless to say, Alvin filmed those interviews too and played them all back to the heavily-indebted couple. You might call that a low blow, or a cheap shot as I think you say over there in the States, but the message got home. Whether they changed their behaviour long-term, I don’t know; but it surely impressed me.

Finally: one of my girls is now a qualified doctor and earns a good salary, so she doesn’t really NEED to be thrifty, but that doesn’t matter; she doesn’t want to change what has become a virtuous circle. So for me and my girls the £5 challenge has been the recipe for not only a debt-free Christmas but a fun Christmas too.

Here is a new peppy 1-minute video I made giving people advice on the responsible use of debit, ATM and credit cards.

“Card Tricks Revealed: How Not To Burn Money”
http://www.youtube.com/watch?v=rKRHiA0tYCc

1- Reduce our family debt by $12000
2- Not incur any MORE debt!