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Paying Cash For Christmas Presents

Updated on November 10, 2007

Well, it is that time of year again. It is time for overspending and swiping plastic. The holidays are here and it is time to spend your money. Or spend money that isn't even yours - just to buy someone else a gift. Have you ever thought of paying CASH for Christmas presents? Shocking isn't it, but it can be done! You do not have to have a credit card to purchase Christmas presents.

Unfortunately most people do not plan ahead. When it comes to what to have for dinner, down to saving money for gifts, most people don't think about it until the last minute. We are a country that statistically doesn't save any money each year, but we don't have to be. The holidays come every single year; Christmas is always on the same day. Why does it catch people off guard? There are many ways to plan ahead and pay cash for Christmas - you can do it!

First, think about how much money you spent last year. Do you know? I guess it doesn't matter, but you need to actually think about how much you want to spend this year. You need some guidelines. What is an appropriate amount to spend on your son's teacher? How about your son, or mom, or brother? Thinking about it ahead of time and having a plan will prevent impulse purchases at the store that you can't afford.

Most people overspend on Christmas gifts. They overspend because they don't think it through before hand and they overspend because they are paying with a credit card, not with cash. Many studies have shown that people spend more money when they use a credit card to pay for things. Not only do they spend more upfront, but they pay even more money in interest come the New Year.

Using cash to pay for your gifts is really the only way to stick to your plan. Now how are you going to pay cash for Christmas? There are many ways actually and most involve planning ahead, however even starting in November you still have time to plan ahead. There is over a month left before Christmas, which generally means a few paychecks. You need to set aside money from each paycheck to purchase Christmas gifts. However much cash you can pull from your regular budget is how much you can spend on gifts this year. If you can find a way to generate some extra income between now and Christmas that will help increase the amount you can spend of gifts.

Saving all year long is the best way to pay cash for Christmas. There are a few ways to do this. I have a savings account that on paper I have broken down into several different areas. I have a section for Christmas and each month I put money into that account. This way I always have cash on hand to purchase Christmas gifts - even in June if I wanted to.

Many banks offer holiday savings accounts. You have money directly deposited into these accounts all year and in October they transfer the balance into your checking account for you to spend on gifts and the cycle starts all over.

You could also set aside cash throughout the year at home. One year I wrapped up a shoebox and cut a slit in the top. Throughout the year when I had extra money I would put some into the box. When it was time to buy gifts for Christmas I had over $200. I hadn't kept track of how much was in there and I didn't contribute regularly, but it really helped us to pay cash for all of our gifts that year.

Do you get paid every two weeks? If so, this means that twice a year you get three paychecks in a month. You could designate one of those extra checks to Christmas gifts. This way, you don't have to worry about saving all year, or accidentally spending that savings on something else. You would get a lump sum a month or so before Christmas to use on gifts.

Another thing I have done in the past is to set aside money from bonuses or extra jobs my husband has done. He taught summer school for years and would get large paychecks in July. It was very easy to move some of that pay into our Christmas section of the savings account. This worked well for us when we didn't have the extra money each month to contribute to this account.

To stay in control of your finances and not overspend on gifts at holiday time, paying cash for your Christmas gifts is the first step. If you haven't done this in the past, you will be amazed at how calm and peaceful your financial life will be in January when you don't have to worry about the credit card bills arriving in the mail. Plan ahead and do everything you can to pay cash only for your holiday gifts. It is worth it!


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    • profile image

      Susan M 

      9 years ago

      This was a great hub last year and even more relevant this year! I have always felt so badly for those who felt that they needed to go into debt in order to have a 'good' Christmas...We have eliminated a lot of gift giving with family and I make homemade treats for my co-workers and friends. I find that the fewer gifts we exchange the more memorable those we do receive become and we also have more time for family and favorite Christmas present is always a good book so that I can sit next to the fireplace and the Christmas tree and have a nice cup of coffee and relax!

    • RodneyGrubbs profile image


      9 years ago

      Making a Christmas list and sticking to it is a great way to stay on a budget through the Christmas season. Buying gifts throughout the year allows you to get really great gifts at really great prices.

    • profile image

      Marye Audet 

      11 years ago

      Great HHub! I start buying gifting in January or Feb, as I find them, wrapping them and coding them so snoopy kids can't figure out whose is whose. We aslo do a lot of homemade gifts.

    • Paul Edmondson profile image

      Paul Edmondson 

      11 years ago from Burlingame, CA

      I'm a big fan of a budget for holiday gifts and paying cash. Last year we purchased a gift for just one person, and it was one of the best holidays I can remember, even though there were less gifts.

    • jimmythejock profile image

      James Paterson 

      11 years ago from Scotland

      Paying with cash has an extra incentive, some stores will give a discount for cash as they dont lose 5% of the profit that most card companies charge them, if you have the guts, ask for a discount for cash, 8 out of 10 smaller retailers will be happy to oblige.....jimmy

    • profile image

      Melissa Garrett 

      11 years ago

      We were able to budget Christmas this year with "found" money. It's such a relief to know that the holidays are paid.

      I tend to buy a lot of gifts from my friends who sell handmade gifts on etsy. Not only do I feel great for supporting someone I know, I feel REALLY good that I am NOT supporting items from China. One of the only toy retailers I am supporting is, for which I have written reviews in the past. They are very selective about the toys they feature and have a wonderful site. *use my personal coupon code WOOLGATHERINGS for a 10% off discount.*

      Anyway, I also do the majority of my shopping online as it reduces those "impulse buys." Even though I have to use a credit card to pay, I know that I have that money in my bank account to pay off the balance.

      Since I've started working from home as a part-time freelance writer, any money that I bring in can be used for discretionary items - trips, holidays, anything extra.

      Money is SUCH a stress, and paying in cash feels so liberating!

      Melissa Garrett


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