My perspective about money has changed a lot in the last three years. I’ve come from a bad place financially to where we are now - debt free and living on one income. That’s why I recently asked you this question on Facebook:

When it comes to the holidays, what are your top questions or problems?

Thank you to those that responded – you know who you are! To respect your privacy, I deleted your initial questions from the fan page before this post published.

No surprise, a lot of the questions centered around gift giving and spending money. It was interesting to read them with my newfound frugal perspective – it took my entire adult life to gain it, so if you can garner some financial wisdom from this blog post, consider yourself far more brilliant than me.

Here is my experience with making tough money decisions during Christmas. Several years ago, we realized we had to cut our kids’ typical Christmas spending amount in half and buy nothing for ourselves. That wasn’t easy. Did the kids notice? Actually, yes, they did. Was it hard to spend half as much money on them? Yes. Did we all have a happy, memorable Christmas? Absolutely.

If you decide not to read any further, my main message is this:

Whatever you do, DO NOT go further into debt just to keep up with a status quo this Christmas.

Shop mindfully. Live within your means. Say no with grace. Write your own debt free Christmas story. Okay?

Now, on to your questions:

How much money should I allot for gifts?

As much money as your budget can allow without going into debt. Simple, yes, but sometimes hard to do. Please, please please do not accept what the rest of society may tell you. Going into debt doesn’t have to be the norm.

How much money do you have set aside for Christmas? If the answer is $20 dollars, then you have $20 dollars to spend on Christmas gifts. If the answer is $200 dollars, then you have $200 to spend, and so on. That response might be annoying you, but I’m saying it because I really believe in making smart, unpopular money choices.

With the budget set, follow these steps

• Create a gift list and assign each person a spending amount.
• In the next column write down an idea for a cool gift.
• Finally, withdraw cash from the bank and go shopping. This guarantees you won’t spend more money than you have.
• Leave your credit and debit cards at home. Better yet, if you have a credit card, cancel it and cut it up. I’ve lived for years without one. You won’t miss it.

How much should we spend on family we rarely see?

Again, the main thing to figure out is how much money you can spend without going into debt. I would follow that up by asking: How much money do you want to spend on family you rarely see?

If your answer is zero dollars, that doesn’t make you a bad person. Just do it – you have my permission! Don’t worry about what other people will think and focus on enjoying the holiday season with those that matter most.

How can I get my extended family to cut down on the gift-giving?

Come right out and ask them. Explain why. Say something like, “We’re trying to watch our spending this Christmas. What would you think about skipping gifts this year, or lowering the spending level?” If that doesn’t work, here are some more ideas:

• Give the gift of experience. Is there something you can do as a family – like attend a concert, spend the weekend at a hotel or go skiing – instead of exchanging material gifts?
• Suggest a homemade gift exchange. Bake cookies, make lotion, knit something.
• Recycle, reuse – Try a white elephant gift exchange. You’ll laugh a lot.
• Ask them to donate the money they would have spent on a gift for you to your favorite charity.
• Ask them to use the money to fund a future visit. To me, time with family is truly the best gift!
• Give them something digital that could change their life. Like Leo’s new ebook Focus, Katie’s 7-Week Life Cleanse (the first chapter is completely free!) or Smalltopia: A Practical Guide to Working for Yourself .

How do I choose which charities – and potlucks! – to give to at work without everyone noticing I’m not giving to all of them?

Coming from office life, I know how this feels. It seemed like there was always a birthday, charitable cause or going away party in the office, followed by an envelope demanding a cash donation. From my experience, here’s what you need to do. It’s something I’ve done many times, for many good reasons:

• Take the envelope.
• Do not put any money into it.
• Pass it to the next person without an explanation.

That’s it! It may sound hard, but trust me, when you have a good reason, it’s not. You don’t have to be snarky about it. Simply be kind, be honest and most importantly, be realistic. At times, getting your finances in order takes guts, but no one else is going to do it for you. As you make the hard choices, it gets easier and easier to make more.

I know the pressure is on to spend, spend, spend, even right now, very early in the season. My advice is: Don’t give in.

Remember and remind those you love: The best parts of the season have nothing to do with getting or giving gifts. Spend time together, do something fun and don’t go into debt. That’s what I really want for Christmas.

Do you have anymore holiday questions? Please leave them in the comments below.

If you liked this post, please share it on Facebook and Twitter. Thank you so much!

Photo by Patrick Q