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Ask Chuck: 3 Steps to Pay Off Christmas Debt

by Chuck Bentley January 4, 2019

Dear Chuck,

Well, we went a little crazy this Christmas…the kids all love their presents but my husband and I are realizing how much we really spent. Our credit card statement hasn’t come in yet but I know we are going to be in for a rude awakening. What can we do to start paying off our Christmas debt?

Starting 2019 Off the Wrong Way


Dear Starting,

You are finding yourself in the same position as many others that went overboard in December.

One Saturday in the weeks leading up to Christmas, my wife and I found ourselves in the local mall. Apparently, it was the busiest day of the entire year to be there. This is not a usual practice for us but we had to get a few things finished for the grandkids. While waiting for my wife to run into a children’s store, I sat in one of those recliners that require money for a back massage. Next to me was a young man in his twenties waiting as well. We struck up a conversation.

Me:  “What brings you to the mall today?”

Him: “My gal…my girlfriend…she wanted to do some shopping.”

Me:  “Are you excited about Christmas this year?”

Him: “Oh yeah! We are planning on a big-time Christmas!”

Me:  “Do you think you can pull it off without any debt?”

Him: “Ha! No way!”  

My informal survey is probably a typical scenario for most. The average American racked up $1,000 of debt because of Christmas. Paying the minimum payment on that balance will take the borrower an average of six years and cost around $500 in interest payments. That’s why Proverbs says the borrower is slave to the lender.

But don’t worry – there is hope and you can pay it off! It will take disciplined hands and a faithful heart but you can still have a bright financial future for 2019. Here are the three steps you need to take:

Step 1: Make a Budget

Debt is borrowing from tomorrow to pay for today. You’re experiencing what can quickly turn into crippling anxiety, fear, and stress caused by debt.

The best way to pay off your current debt and avoid it in the future is to make a budget. A budget empowers you to know exactly where your money is going and helps you reach your financial goals. When you use a budget, your money starts working for you, not the other way around. Contrary to popular opinion, it doesn’t limit your spending, it gives you freedom to spend…the right way.

Ask Chuck 3 steps to pay off christmas debt

The first step is to start tracking your spending. Of course you can identify the overspending that occurred over Christmas, but you may be surprised to see what you’re actually spending on other items throughout the year.

Tracking your spending will help you identify where you can cut back on spending in order to build margin for your finances and make extra payments toward getting out of debt.

This blog walks you through the steps to making a budget that works for you. You can also download the Easy Guide to a Budget You Love to get started.  

Step 2: SAVE $1,000

It may seem counterintuitive, but you have to save your way out of debt.

Think about it: most people get caught up in the debt trap because they don’t have cash to cover the purchase. Building an emergency savings will help you take a step away from the edge of the financial cliff and give you margin.

Until you have at least $1,000 saved in an emergency account, you’re still at risk to accumulate more debt. Work this goal into your budget. If it seems daunting or overwhelming, just think of it in small “chunks”. One thousand dollars is just ten hundred dollar bills.

It will likely require a lifestyle change but you can do it and it is worth it! Remember that this is all part of a journey of becoming a faithful steward.

Step 3: Snowball!   

Once you have a stable emergency savings account, it’s time to attack your debt! I have two main recommendations here:

  1. Use the debt snowball method. Using this method, you’ll organize your debts from smallest to largest balance first – this includes your credit card debt, car loans, student loans, etc.

Continue making minimum payments on all your debts and then put all extra cash you have towards paying off the smallest debt. Once it’s paid off, you “rollover” what you were spending on it to the next smallest debt, and so on. It’s proven to save you time and money. The debt avalanche method is similar and also effective.  We have a free debt snowball calculator you can use to get started!

  1. If you’re dealing with overwhelming credit card debt, Contact Christian Credit Counselors. They’ve been our trusted partners for years because they can help you pay off your debt the right way and prevent you from going into default.

Faithful Stewardship

I always say that if we only help people get out of debt, we have failed. Our finances are so intimately tied to our relationship with our Heavenly Father and there’s no way to separate them. Look at this season of your life as an opportunity to draw near to Him and learn what His word says about money. Invite the Lord into your finances by studying His principles and learning to use them as your guide.  

Ask Chuck paying off christmas debt 2

You could be completely debt-free and still miss the call God has on your life. Learn to be a faithful steward and allow Him to guide your life, not just your finances.  When our hearts are faithful to obey God and our hands are disciplined with managing well what He has provided, we are on the path to freedom and true riches.

As you start on this path in 2019, you will find that the Lord delights in easing our burdens and bringing us life to the full. Christmas is a wonderful time to celebrate His birth, to be generous with our loved ones and to enjoy the greatest birthday party in the history of the world, but we do not have to go into debt as a result. Set a goal not only to pay off your 2018 Christmas debt, but to pay cash for Christmas this coming December. Then it will truly be a much merrier Christmas.  


Originally published on the Christian Post, January 4, 2019

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