Christmas is in December

by Dave Ramsey, Money Matters |
Graphic by Joni B. Hannigan

NASHVILLE (Christian Examiner) -- It happens every year. I take calls on my radio show from people who forget that Christmas happens in December. There's no excuse for treating Christmas like an emergency, and I just reminded you of when it takes place, so you can't say you forgot this year. With a little planning, you can have the best Christmas and New Year's you've ever had.

Most Americans treat Christmas like it's an emergency and resort to credit cards to pay for gifts. Then, they wait in dread for the bills to come in January. This ruins both Christmas and New Year's, and it doesn't have to be this way.

Don't let it sneak up on you. Start planning as soon as possible by putting aside money each month to cover the cost of your gifts, extra food, travel and decorations. There's not a magic number for how much to save. If you want to give a lot, then you have to save a lot. Think about how much you want to spend, divide that by the number of paychecks you will receive from now until Christmas, and that's how much you need to save each pay period.

Do a Christmas budget. Make a list of everyone you are buying gifts for, and assign a dollar amount to every name. Then, total it at the bottom. You can also check out, a free online budgeting tool to help you stay on track. Mall and specialty stores have elaborate plans to get your money this time of year. So, you need a game plan for your shopping to keep you from overspending. There's no excuse for financing Christmas!

Pay cash. Put the total amount of cash from your budget in an envelope, and when the cash is gone, stop spending! It's as simple as that. This will help keep you on budget, because if you overspend on Aunt Sue it means Uncle Harry won't get a gift. Just stick to the plan, and make sure no one gets left out.

Don't buy yourself a gift! This is the season to give, not to receive ... from yourself. I know you think you're getting great bargains, but it's not about you. Resist the temptation, or plan ahead and put yourself on your Christmas budget.

It's okay if you're a little short on money. Stick to the cash-only plan anyway. Let's rediscover the meaning of Christmas. It's about more than decorations, the mall, the big dinner, and over-the-top gifts — those are the optional things we do to celebrate Christmas. You could always make gifts, give low-cost gifts, or even hand out gift certificates promising your time. Talk to your family about spending expectations. Draw names, set price limits or get creative.

Whatever you do, don't go into debt. It's not worth it! The kids won't remember the plastic toys you bought them, but they will remember the time you spent together as a family. If you take control of your finances and stick to your budget now, you'll be able to give much more in years to come!

*Dave Ramsey is America's trusted voice on money and business. He's authored five New York Times best-selling books: "Financial Peace," "More Than Enough," "The Total Money Makeover," "EntreLeadership" and "Smart Money Smart Kids." The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations. Follow him on Twitter at @DaveRamsey and at