Overspending will kill your Christmas cheer


“Christmas is the season when you buy this year’s gifts with next year’s money.”


With the holidays nearly upon us, I was thinking about all the good memories I have about Christmas and the good feelings associated with the holidays. As a child, seeing all the gifts under the tree created such a powerful anticipation for the day we would open them. As I grew older, I started to understand how expensive the holidays were for my parents and how burdensome it was for them to pay for our gifts for months and years afterward. It was difficult to see the tension it caused in their marriage, which spilled over to us kids.

As a parent now, I understand the temptation to buy our children everything they want for Christmas. I desire to create for them the same anticipation I enjoyed as a child. I have found myself buying for the moment and not thinking of the pain associated with paying off the debt down the road, or even computing how long it will take to pay it off.

Debt enslaves us and takes away our freedom. For example, consider the long-term consequences of racking up $5,000 in credit card debt:

It takes a very, very long time to pay off your credit card debt if you only pay the minimum. Most card issuers set your minimum payment at 4% of your debt – so a $5,000 credit card balance with an 18% interest rate would start out with a $200 monthly payment. But if you only make that minimum payment, it will take 12.5 years to pay off your credit card debt, during which time you’ll pay the card company a total of $2,916 in interest – more than half the cost of the whole loan in interest payments (read more).

[pullquote]Being free of debt feels like Christmas every day.[/pullquote]I would suggest that being free of debt feels like Christmas every day. Little compares to the feeling of being self-reliant and managing one’s personal finances responsibly.

These principles also apply to government. As responsible citizens, we owe it to our families and fellow citizens, now and in the future, to keep our government fiscally responsible – which means spending public resources carefully and avoiding debt.

Here is a great video that explains how to stay out of debt:

Let’s all do our best to stay out of debt this holiday season and enjoy the freedom that comes with it!