Money Matters: Holiday Gift Giving

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Gift Purchasing Strategies

Layaway 

  • Many retailers have revived this blast from the past.  Not only is this a good way to budget appropriately, but this also keeps gifts out of your home and away from prying eyes.  Be sure to check the terms of agreement.  Some places may charge termination or re-stocking fees if you cancel your layaway.  Also be sure to understand the deadline for payments.  This method may take some managing, but it forces you to pay up front.  You’ll be glad you did that when your credit card bills come in January.

Handmade Gifts

  • Make a commitment to making your gifts from scratch.  The recipients are sure to love your gift no matter your level of talent.  Draw a picture, stitch a needlepoint, or bake some cookies.  You will have to invest some time, but you will save loads of cash.  The end result will be a gift that won’t be forgotten.

Smarty Pig

  • Use this valuable tool to save the money in advance.  This convenient web-based service allows you to set up goals for holiday giving (or anything for that matter) and make regular contributions until you reach your goal.  Although interest rates are low nationwide, they do still pay a competitive rate on your deposits. Upon achieving your goal, you can request the cash or transfer your savings to a gift card with participating retailers to get additional bonuses.  You can even have your money transferred to a debit card for easy shopping.  This is one program worth checking out.  Visit smartypig.com.

Budgeting envelopes

  • We have discussed these envelopes before.  Here is a template for a printable one we supplied.  These envelopes are wonderful for managing your weekly budget, but work great for the singular task of budgeting for holiday shopping, as well.  Make one for each recipient, or make one for each kid to manage their shopping “allowance”.  Withdraw the amount of cash you have budgeted for gifting and stop there. 

Make a game of it.

  • One box~ everyone gets one, very special box.  Everyone’s gifts to that person must fit within the  box.  You decide the size.
  • Name drawing~ Many large families do this to alleviate the financial burden of purchasing a gift for everyone.  Pick a name from the hat and a dollar limit.  Everyone gets one gift from someone in the group.

As a side note:  You’ll notice the obvious absence of purchasing on credit.  I understand that many will use this as their course of action.  I strongly advise against using this method unless you have set the money aside to pay off the balance from the purchases as soon as they appear on your statement.  Credit is a valuable tool, but must be used prudently.  Allowing balances to carry forward negates any discounts or deals you got while shopping in most cases.  Don’t pay credit companies extra for your gifts.