I have mentioned once or twice before about how we have a debt-free Christmas despite the fact that we really go over the top for our kids' gifts. A few of you emailed me to ask how in the world we do that and if we have an unlimited income.

Our Household Finances

We most definitely do not have an unlimited income! Between Joe's and my salaries and my blogging income, we are firmly in the middle class.

We keep a small amount of money in a bunch of savings accounts for various expenses - car repairs (our newest car is a 2009 Saturn Vue), vacations and travel, educational expenses (we homeschool our kids), medical expenses (I have several chronic conditions and also require a handful of daily vitamins because of my gastric sleeve surgery in 2017), and quarterly expenses like our trash and sewer bills. If we had more money, I would like to start savings accounts for home repairs, too, but we just haven't been able to make that happen to this point.

We have an embarrassingly meager emergency fund (less than $1,000) for expenses that don't fit into the above categories, but God has blessed us beyond measure to this point because - with two major exceptions - we have had enough money in each account for any expense that popped up.

The exceptions:

• A $6,000 car repair - We ended up wiping out all our other accounts to total $3,000 and had to borrow $3,000 from a family member to do this. It was still cheaper than buying a new car.
• A $1,200 car repair - This one wasn't an emergency, just something that needed to be done soon, so we were able to put a little extra aside each pay to save faster than we had been. We were able to make the repair with the savings in the car repair account plus the extra amount in 2 months.

You may have noticed that I haven't mentioned anything about credit cards. That's because we don't have any credit cards. 

I am an overspender, and I have been an overspender for as long as I can remember. When I had credit cards, I used them freely and ran up tens of thousands of dollars in bills.

When we got out from under all those bills, we closed all the accounts. It's much safer for me to have no credit cards than to keep one just in case.

We don't have any credit cards for emergencies because I can always find an emergency. We did have a situation recently where we needed to rent a car and couldn't because we didn't have a credit card, but for the most part, having none is really fine. We aren't missing out.

How to Have a Debt-Free Christmas - 9 Tips for Avoiding Credit Cards this Year

Set up a savings account for holidays & birthdays

My first and most important tip is to set up a separate bank account where you will save for holidays and birthdays. We bank with a local credit union for most things, but we have about a dozen online savings accounts set up with Capital One 360. (This is not a sponsored post; I'm just sharing what I've found helpful.)

The only bad thing about Capital One 360 is that it takes 2 full business days for funds to transfer to the credit union account, but I have made that work. It's good in some ways because I can't just spend money; I have to plan 2 days in advance in order for the cash to be in my checking account. On the flip side, if I want to buy something and don't have the money, I have to wait 2 whole days to get it. That's a decent amount of pondering time to decide whether the expense is really a wise one.

We do a lot of presents throughout the year for Joe and me, for the kids, and for extended family, and I use the money in the holidays & birthdays account for all of them: birthday gifts and parties, Easter baskets, Christmas presents, Mother's Day and Father's Day gifts, Valentine's Day gifts, etc.

My Automatic Savings Plan

My next big tip, and perhaps even more important than having the savings account, is putting money into it. As soon as I set up my savings account, I set up an automatic savings plan.

My Capital One 360 accounts' automatic savings plans transfer money from our household checking account (where our paychecks are direct deposited every other Friday) to all the different savings accounts. $200 per paycheck goes to the medical account (switching this over to my HSA for next year), $160 per paycheck goes to the education account, $100 goes to the car repairs account, and so on. One of those auto deductions goes to my holidays and birthdays account. I think it's $100 per paycheck, but the amount isn't all that important.

What is important is that my automatic savings plans deduct money from my checking account the Monday after payday every single time with no thought or action from me. The money comes in on Friday, we feel rich for a couple of days, and then the money goes out on Monday, leaving us just what we need to get by for the next two weeks.

I will be honest and admit that I have had a few transactions declined for insufficient funds because I take so much out for savings, but those declined transactions and the harried hustle to cover them using money from our emergency fund is worth it to me. Our savings accounts, earmarked for specific purposes, build up quickly, paycheck after paycheck, and I don't have to worry about where the money is going to come from to fix the heat in my car, pay for Grace's braces, or to have a debt-free Christmas.

A Christmas plan

Everyone says you're supposed to make a Christmas budget and detail out exactly what you're going to spend, when, and on whom. I think that's a great idea, but I don't generally do it in that much detail.

What I do is plan out (in my bullet journal) what I want to buy for each person, and I add that up and make sure I have enough in my holidays and birthdays account.

Here's where I probably deviate from a lot of other people:

If I don't have enough money in my account to cover the gifts I want to buy, I don't cut the gift list. I figure out how to earn the extra money.

I make more money, which I can generally do by seeking out blog sponsors or projects or, on one occasion, thoughtfully dipping into a different account.

Gifts at Christmas are very important to me. You could probably make a case for their being too important to me, but this is my choice.

How to earn extra money

If you don't have a blog or side business, you may be wondering how you could make some extra money. Here are my favorite ways:

Rakuten

Rakuten is a recent addition for me. It's a new form of ebates if you've ever heard of that. Basically, they pay you cash back for every online purchase that you make. Generally it's between 1% and 5%, but I got 22.5% on my Kiwi Co purchase this year. It adds up quickly. If you use the referral link here, you will get a $40 bonus right off the bat (after your first $40 purchase), so that will give you a big head start. My next Rakuten payout will be over $450, and I can tell you that it works!

Swagbucks

Swagbucks is a search engine and a lot more. They provide all different kinds of things you can do – links to click, games to play, surveys to complete, videos to watch, and more. You get SB for everything you do. I don't generally spend time trying to earn SB, but I do use their search engine exclusively, so I get SB for some of my searches. If Rakuten doesn't have a cash back offer for a store, I shop through Swagbucks links, and I get SB back for my purchases. Then, I am able to spend my SB for Amazon gift cards. I make a few hundred dollars a year in Amazon cards from SB, and I save them for Christmas presents.

Ibotta

After Amazon and Ebay, Ibotta is the third most used shopping app on mobile devices in the US. So what's all the fuss about? When you register through this link, you will get a $10 bonus after your first purchase. Then you can make purchases through the app and also use coupons in the app to get cash back on your groceries. You select the stores you frequently shop at, and then you select the offers you want to receive. Then, when you buy those things, you scan the QR or barcode on the receipt and get paid. It's super easy and you can make a lot of money. My sister had over $60 in her account when she told me about it a few months ago. You can cash out to Paypal at $20.

Using the savings account

If an expense is small, and it can be covered easily in my household budget without tapping into my savings accounts, then I don't transfer the money. This generally applies to purchases under $20.

For anything over $20, I keep a running count on my budget spreadsheet, and I make a transfer once a week. (You can only make 6 transfers per month per account, so I can't transfer money whenever I think of it.)

Stay out of the stores

I try to stay out of the stores, period, not just at Christmas time. I am impulsive, and being in the store and faced with all those amazing things leads me to make purchases that are not in my plan.

I do almost all of my shopping online, usually on Amazon but also on Etsy where possible.

Coupons & sales

I make a calendar on Shutterfly and give that to everyone in the family every year. I started doing this in the late 1990's and have not missed a year ever.

Calendars are not exactly inexpensive, running around $25 each, but I wait for the Buy One Calendar, Get One Free sale at Shutterfly around the first of December, and that's when I make my big purchase. They come out to around $13 each plus shipping, and everyone loves receiving them in addition to whatever else we might give.

I do watch for specials on Amazon, Walmart.com, and other sites, especially around Black Friday and Cyber Monday, but I try not to buy anything that's not on my plan. Sometimes I am able to stick to my plan, and sometimes I am not, so I generally don't look too hard for deals.

Homemade gifts

I have found over the years that homemade gifts are much cheaper than commercial gifts, so we try to come up with nice gifts that can be made ourselves. The key is that the homemade gifts have to be amazing, interesting, and desirable to the recipient.

The year my niece got an Easy Bake Oven, I made her a cookbook of recipes to use with it. She treasured that cookbook. I've crocheted blankets; we've made jams, jellies, and butters.

I've also received quite a few homemade gifts, including soups in a jar and homemade brownie mixes, and I have loved every one.

I think homemade gifts are the best gifts for adults, so I make whatever I can. (I say for adults because my kids still want their gimmicky toys with certain labels on them.) You can check out the ultimate list of amazing homemade gifts over here.

On starting early

Because I love to shop and especially to Christmas shop, I start early, usually in September or October. If I'm not "almost done" by November 1, I feel rushed and behind.

This is a great plan if you have any amount of discipline.

I do not.

So generally what I do is buy everything I want to buy in September and October, claim to be done, and then succumb to impulse buys for all of November and part of December, going way overboard and causing my husband to have go crazy with every new purchase.

This is not a plan I would recommend. It doesn't make any sense at all, especially in light of a debt-free Christmas.

Yet, I do it year after year, and I cannot seem to stop. We all have issues, and this is mine.

Plan to make sacrifices

You can probably predict what I'm about to say here. You will most likely have to make sacrifices in order to have a debt-free Christmas.

When I make sacrifices, it's usually sacrificing grocery or gas money for gifts, but I know that's not the right choice for most people (and maybe not the right choice for me either).

Last year, Allie asked for a Just Like Me American Girl doll that cost $200. It was the only thing she asked for, and I felt, for many reasons, that if she didn't get it, she would be very disappointed. Not getting that doll would have overshadowed the rest of Christmas for her, so I bought the doll even though I only had about $400 in the holidays and birthdays account at the time because I had gone overboard on Christmas gifts while we were on our December cruise.

We ended up scrimping on our household budget (clothing, gas, groceries, and eating out) to buy the gifts I wanted to buy, and it was difficult.

But I was glad we did it when Christmas morning rolled around, and Allie got the doll she wanted.

And I was even more glad we did it when January rolled around and we had zero credit card bills to pay.

It is entirely possible to do Christmas without using a credit card or going into debt. We do it every year, and you can too. Maybe this year is out of reach for you because you haven't been saving all year, but if you start now (or in January), you will most certainly be able to go debt-free for Christmas 2019.

Have you ever had a debt-free Christmas? Are you going to shoot for it next year?