Challenge accepted: A credit card-free Christmas

If the sight of Christmas decorations and the blare of carols is causing you to break into a cold sweat just thinking about all the festive financials, take a deep breath.

Glen James, personal finance guru and host of popular personal finance podcast for millennials, My Millennial Money, shares his tips for a finance-friendly Christmas that will leave your credit card untouched.

Is it too late to save for Christmas this year?

Ideally, the more time you have to grow your savings for Christmas, the less broke you'll be when the day finally arrives, but every dollar counts! So, it's never too late to get started.

If you are on a weekly pay cycle, start putting a small amount away each pay into an account dedicated to your festive activities. For those who get paid monthly, you can still start this practice for summer holidays or New Year celebrations.

How much should I spend on gifts this year?

Figure out what you can afford per person, per gift, and stick to that number. Be real about what is "too much" to pay for a gift. The best gift does not have to be $100 – sometimes a $30 gift does the trick.

So often, we receive gifts we don't need, especially those cheap token gifts. Don't feel obligated to purchase gifts for everyone. Cut your gift list back to your inner circle, focus on quality time or even just give a COVID elbow, high five and a smile.

If your family usually does individual gifts, why not consider a 'Secret Santa' where family members exchange gifts anonymously, and each person only purchases one gift. It's important that the family agree upfront on a maximum spend per person that everyone is happy with.

Cash is tight this year, should I put Christmas on the credit card?

Many of us have experienced financial hardship this year, and a 'credit card Christmas' will only add to your stress when the bills roll in. Christmas 2020 is the ultimate year to take a stand and commit to not going into debt for gifts. No Christmas debt hangover ever again!

This doesn't mean you have to be stingy. Instead, be generous with your time by prioritising experiences and quality time with loved ones over expensive physical gifts.

After a year where we have been stuck inside and away from family and friends, we all need to enjoy whatever time we can together doing fun things! Some of the best experiences also don't cost much or any money.

Spend a day at the beach, invite friends over for a movie night, share a meal together. Or even bring back the old 'chore gift vouchers' for family members. Just keep it simple, fun, and thoughtful.

I am hosting Christmas this year – what can I do to reduce the cost of feeding my family?

Get the family onboard this year and ask them to bring their signature dish to help lighten the workload and financial cost of getting together. Whether they bring a plate, BYO drinks or even just some snacks to keep the troops full between meals, it will help to ensure there is plenty of Christmas cheer to go around – without putting you in the red.

The opinions expressed in this article are the opinions of the author(s) and not necessarily those of homeloans.com.au. The above is general commentary only and is not advice tailored to any individual's financial situation. We recommend seeking advice from an insurance or finance professional before implementing changes relating to your finances.