Many families have told me about their “Christmas Simplification Plan”  – limiting their gifts to three per person. We told the Kay family babes years ago that if three gifts was good enough for baby Jesus, then three gifts is good enough for them. This tradition has kept the focus of the season where it belongs and it’s kept us out of debt too.

Listen to what Sandy from Colorado writes:

“I wanted to try your Christmas simplification plan with the three gifts but didn’t know how our family would take it. But our finances really needed it. It seems like it takes forever to pay off the credit card bills from Christmas. We explained the idea to the kids and they seemed to understand. They even made a game of trying to pick three simple gifts they really wanted.

Well, it worked beautifully! We had told the kids they might not get everything on their list and we found clearance items, like you said, that weren’t on the list but the kids liked even better than the things that were on the list. For the first time in seven years, we don’t have credit bills to pay off from Christmas. The emphasis was on the reason for the season and we don’t have the headaches of bills to pay. Why didn’t we start this years ago? Thank you, Ellie Kay, for your work in this area.”

Sandy is so right when she says that it seems to take forever to pay credit card bills. The average American family spends until May of the following year paying off Christmas debt. That doesn’t leave much time to save for vacations or to service other debt, does it?

Here are some tips to help your Christmas stay focused and on budget:

• Document your purchases
  There’s nothing like buying Christmas paper to wrap those presents early, only to discover a month later that you have tons of paper you bought at the end-of-season clearance last year and forgot about it. Or you get a good deal on gifts for teachers and then realize you bought those earlier in the year and forgot where you put them. Write down your purchases—and where you stashed them—on a piece of paper and tape it to next year’s December calendar page.

• Kids need to save too!
  Part of teaching your children about money is helping them to plan ahead and as they get older, pay for their gifts. We give our younger children a certain amount to spend, and then when they are around eight years old, we match them dollar for dollar on what they’ve saved to spend. By the time they are twelve, they are buying their own gifts with their money. Encourage the children to get odd jobs in the summer to save for Christmas. At age thirteen, Daniel not only earned enough money to open a mutual fund over the course of a year, but he also pays for quality gifts, pays his tithe, and takes pride in his ability to manage money.

• Start early
  In February, make a tentative gift-shopping list so you can watch for sales during the year. If you decide on an entirely homemade holiday, make it a family project to begin those handcrafted decorations and gifts in the summer.

• Jams and jellies
  By preparing your jams and jellies when the fruit is in season, you can save a lot of money. Present your homemade gifts in interesting baskets, boxes, tins, or other containers you’ve found at garage sales or on clearance shelves.

• Decorate early
  If you decorate the day after Thanksgiving, you not only avoid being out on the busiest shopping day of the year, but you’ll save money too. By organizing all the Christmas decorations, you’ll discover which items you need and which ones you do not need. Then you can look for those lights that are on sale to replace the ones that didn’t survive the year. You also won’t duplicate items that you bought on clearance the previous year. With your home decorated so festively, you’ll also be less inclined to impulse-buy holiday decorations.

• Bartering moms
  Kathie Peel and Judie Byrd, in their book, A Mother’s Manual for Holiday Survival, advise planning a “mother’s trade-out week.” During the week before Christmas five moms will each plan an activity for all the kids that will last about four to five hours. So each mom gets four days off that week and entertains the kids one day. In Kathie and Judie’s example, one mom had a kids’ cooking day, another did holiday crafts, and another mom took the kids to the dollar theater. Sounds like a legitimate trade-off to me!

• Wrap as you buy
  But don’t forget to label whom each gift is for. You may want to keep a master list of the gifts, listing the contents and numbering them as you buy them.

• Sharing Christmas
  Sometimes the gift of time is the greatest gift of all during the holidays. There are a number of ways you can brighten the holidays of those around you and share the season. We like to visit nursing homes and just spend time with the residents, talking and sharing. If you know of an elderly neighbor or friend who rarely gets to decorate for the holidays, why not help them set up a tree and lights? Then after the season is over, help them put the decorations away.Invite a single parent and his or her family over for the holiday dinner—these can be the hardest times of the year for people who go it alone, and the warmth of another family is usually welcomed.One of the traditions on military bases is a holiday cookie drive. Last year, we collected 120,000 cookies and distributed them to police officers, fire fighters, and others who worked the holiday shift. Your family could take a basket of goodies to your local fire fighters or police officers on duty. I know they would enjoy those treats on Christmas Eve! We even bake cookies for the mail carriers and sanitation workers. We place these in easy to carry plastic bags and include a can of soda.

• Emergency gift closet
  You may want to have extra gifts on hand in case an unexpected guest turns up with a present in hand. These can appeal to a broad range of tastes. Some ideas are holiday CDs, classic holiday videos such as It’s a Wonderful Life or White Christmas, and holiday fashion accessories, including cuff links, earrings, socks, and scarves—everyone loves to wear their holiday duds.

• Financial help
  One last idea is to give an anonymous gift of money to someone who desperately needs it. You could write a check to your local church and ask them to pass the money along to the family, or you could buy a money order to mail to the family. While you might include a card or message, don’t sign it. Remember that the One who sees these acts of love done in secret will one day reward you openly.

Seize the day,
Seize whatever you can,
For time slips away
Just like hourglass sand.
Seize the day and pray
For grace from God’s hand,
Then nothing will stand in your way,
Seize the day.
–Carolyn Arends, songwriter and musician

Excerpted from: How to Save Money Every Day Copyright © 2001, Ellie Kay. Used by permission. Unauthorized duplication prohibited.

Ba-humbug! Getting through the holiday blues
Why carols? Learn the meaning behind popular Christmas carols