Friday, November 21, 2008

Saving Money During the Holidays


Tip #31- Saving Money During the Holidays. The holidays - Christmas, Hanukkah, Birthdays, Mother's Day, Anniversaries, etc. should not make you go broke. Let me repeat that. They should not make you go broke. First of all, there should be a line item in your budget for gifts. Figure out how much you would like to spend all year long on gifts including birthdays and Christmas and any extra special events that normally come up in the course of a year - new baby, wedding, anniversary celebration, graduations, etc. Then divide that number by 12 and that should be your monthly gift budget. If you only have $50 per month to spend on gifts then all gifts throughout the year should not total more than $600. Stick to it. I don't care if the neighbor down the street is getting a Coach Bag Mother's Day. If it will take half of your gifts' budget, then don't ask your husband for one.

To make it easier to see what you have, you can set up a "Gifts" enevelope in which you deposit your monthly gifts budget amount into. Then as a holiday approaches, you take the money you need out of the envelope. Make sure you leave enough in there for end-of-the-year holidays.

Speaking of end-of-the-year holidays, it is easy for gift-giving to get out of control that time of year. The advertisements are non-stop, the sales are great, and people are constantly asking what you want for Christmas. Try to cut down on the madness!

--Do a holiday exchange with family members by picking a name out of the hat so you are not buying a present for every person in your extended family.
--If you are a mom or a dad, cut down on the number of presents you buy. Buy one big one and a few little ones.
--Save things as you buy them throughout the year and give as gifts for the holidays or birthdays.
--Shop at yard sales and thrift stores. There are many unopened and unused things to be found at these places. Even some pre-owned toys are in good enough condition to give to your children. --Buy some practical things that you would have bought anyway. No child wants 5 pair of pajamas for Christmas. But a few toys along with necessary items such as cute pajamas or a hat work fine.
--Know how much you will spend in advance and stick to it. If you plan on spending $100 per child, then don't go beyond that limit.
--Keep a big box of things you've bought on clearance all year long. When holidays roll around, shop from that box.
--Make a gift - a box of homemade cookies are a treat for someone who doesn't have time to bake. Canned jams and jellies are unique and appreciated. If you can knit or crochet or paint, then use those skills to make gifts.

There is no reason that holidays should become a gift buying extravaganza. After all, the holidays are not about gifts. They are for celebrating the person, the religious event, or special lifecycle moments. Those are what make the holidays special.

In Real Life (IRL) - We have a budget of $100 per month for gifts. Which sounds like a lot. But it really isn't. We have 5 people in our family with 5 birthdays. We celebrate our anniversary, Valentine's Day, Mother's Day, and Father's Day, as well as Hanukkah and Passover. We also have aunts and uncles, cousins, and grandparents. The big gifts are for birthdays and Hanukkah. We spend about $100 per child for Hanukkah. For birthdays we spend about $25 for each of the children. For cousins, we give $25 each for birthdays and Hanukkah. That's $250 for both birthdays and Hanukkah. As a family we have agreed that adults don't exchange presents for birthdays and Hanukkah. So my sister and I don't exchange gifts, but we buy gifts for her children valued at $25 each. For holidays such as Valentine's Day, Mother's Day, or Father's day, we spend very little. I might find a book at a yard sale that my husband likes. So the cost may only be $1. I'm not a big fan of cut flowers so I tell my husband to forgo the flowers. He usually will buy me some chocolate instead. And since I like Hershey's over Godiva, his presents to me don't usually cost more than $5. For our anniversary, we don't usually exchange presents. We usually do a special dinner or evening out. That's part of our eating out or entertainment budget. So all told, we spend about $700 per year on regular holidays.

There are inevitably special holidays or events that crop up throughout the year such as new babies or special anniversaries. This past year we had my husband's mother's 80th birthday, my niece's graduation, and a friend's son Bar Mitzvah. The remaining $300 is for these types of events. My mother-in-law got a sterling silver bracelet with her grandchildren's birthstones on it for her birthday at a cost of about $50 plus a special dinner at a restaurant. My niece got money put into her account to the tune of $100 plus a special picture for college that I found at a thrift store. And the Bar Mitzvah boy got a gift of $118 plus a small present that we found inexpensively. So we were pretty close to the $300 that we budgeted. Of course happy events are sometimes hard to know in advance. And our budget is just a guide. We actually spent $80 for my daughter's birthday present this year, which was a keyboard for her to use for piano lessons. It was something we'd been wanting to buy anyway, so it was in our budget. For Hanukkah she wants an American Girl doll. I convinced her that she needed to get rid of some older toys that she doesn't play with anymore if she were to get it. We were lucky two-fold: the toy I sold for her got over $100 on ebay and I bought a Kit doll on Craigslist for $60. (They are $90 new). So overall, we have stuck pretty close to our gift budget this year.

It's amazing how quickly gifts throughout the year can add up, so it's very important to budget for these. And even more important to stick to the budget. Happy Holidays everyone!

No comments: