The holidays are upon us. For those of us feeling a financial pinch, this can be a time of stress and worry rather than one of happiness and caring. We hope that this article will remind you how to do more with less and how to stick to a budget for gift-giving.
As for the shopping public, one of the greatest stresses for Americans during the holiday season is gift-giving. Finding just the right gift for every person on your list can be overwhelming, especially if your list is long. Just like the advice you receive for how to enjoy the holidays — to eat, drink, and be merry (without overdoing it and indulging) — we encourage you to avoid overdoing it when giving gifts as well. If you go to a holiday party, this means limiting your alcohol intake, eating a half rather than a whole portion of pecan pie, and laying off the eggnog. The same applies to giving gifts; We encourage you, again, to not overdo it.
What does that mean? It means to follow a few simple rules. And by this, we mean to really follow the rules!
Rules for a holiday spending budget:
1. Set some expectations - Setting expectations means that you need to be realistic about your finances and what you can afford to spend to accomplish your goals. You've heard it before: it's the thought that counts. So think about how to use your money wisely in a way that you can have the greatest return.
2. Set your limits - No one wants to hear the word "budget" when it comes time to holiday shopping. Nevertheless, if you are in a financial crunch, this is exactly what you need to do. For example, even though I tell my mother-in-law not to get me anything, she still manages to find a gift (or several) that I really need or want. Usually, this consists of either one reasonably-priced gift or several smaller ones. Regardless of what gifts I receive from her, they are always within a certain dollar limit. My in-laws set a budget of X dollars for each of their kids, Y amount for each of their kids' spouses, and Z amount for each grandchild. She solicits suggestions from other family members and stays within her budget for each recipient. It's a good system: she starts planning before Thanksgiving and searches for sales and bargains throughout the next month or so. All of her family members understand her budget and know that what they receive will fall within that price range. Again, here is an example of setting expectations, but in this instance, the recipients get the message and knows your limits.
3. Get organized - Establish your list of recipients and the amount of money you can afford to spend on each person. Remember, this does not mean charging everything to your credit card that you cannot pay off when it is due in January. Just as you need to live within your means the other 11 months of the year, this too should be a plan that takes into account the amount of money you have saved or have on-hand that you can use for your gifts.
4. Resist the urge! - We all just want everyone to be happy during the holiday season. In order to make that happen, we sometimes think that giving the ultimate gift is what will do it. It won’t. Come down from that ledge, and it is a ledge, because if you fall into the mindset of going all out, you will find yourself in a large hole when your bills are due. Of course your little niece Suzy would be thrilled to get the latest and greatest doll, cell phone, or running shoes, but that will not be in the cards if you stick to the simple rules of your budget. Most people who understand the value of a dollar, and perhaps have some indication of your situation or the economy, should be grateful for whatever gift you get them.
5. Get creative - A nice moderately-priced bottle of wine, a framed drawing that Timmy painted in Kindergarten, or a double batch of your fantastic snickerdoodle cookies would surely bring a smile to most loved ones' faces. As an alternative, some other type of "sweat equity" gift can mean just as much something from a department store. This might include a hand-made certificate for free babysitting or cat-sitting services, yard work, and similar tasks that might ease another's burden. Don't you think Uncle Carl would prefer a home-cooked dinner prepared by you over a box of candy or another pair of black socks?
6. Tally up all the costs - If you need to travel this holiday season, take that into account as you make your budget. If you are spending $1500 to fly the family to Aunt Clara's, no one would expect you to also spend a few hundred dollars on gifts for her and her family. Well, almost no one. If Aunt Clara and the gang feel short-changed when you fail to arrive with several steamer trunks full of surprises, it just may be your last holiday trip to her place.
Remember, this is the season of giving — not the season of spending, as most merchants would have you believe.
Set your expectations and your budget, get creative, don't overdo it, and be merry.