As I mentioned in my recent post about love, gift giving is my love language. I show my love by sending the most thoughtful gifts to those I love. I must say I’m quite good at it.
But there’s just one little problem.
Things can get, well, a little out of hand.
It’s so easy to get caught up with the gift-giving spirit of the season, and the catchy Christmas carols don’t exactly help…Santa honey one thing I really do need, the deed to a platinum mine…or I want a hippopotamus for Christmas…or all I want for Christmas is my two front teeth…or all I want for Christmas is you…
You get the idea. Whether it’s your Instagram feed or your friends or the displays at the store, everywhere you look, you are prompted to want something or buy something. Charge it and pay for it later.
I’m not saying gifts are bad. But really, do your loved ones and friends want you to blow out your budget on things you can’t afford? Probably not.
This year, make a plan and stick to it. My friend and financial sherpa Peggy Doviak, whose book has been helping the Chairman and I get a handle on our finances, shares a few ideas on how to make this the best Christmas ever without breaking the bank.
We had such a great response from Peggy’s last post on planning for retirement, I wanted to bringing her back to shower us all with her bright, shining financial wisdom.
Here’s what she had to say.
The Best Christmas Ever
Do the upcoming holidays fill you with joy or dread? Are you already wearing cozy holiday sweaters, drinking hot cocoa, and watching Hallmark movies? Or do you find yourself wondering whether Scrooge was right, and we really should be boiling people in their own plum pudding?
I think money is one of the leading causes of holiday stress for people. We want to create the perfect event, and we try not to think of the bill that will arrive in the mail around January 15th. Well, here’s the good news—it’s possible to have a great holiday season and stay out of debt. Planning ahead, being willing to spend hours rather than dollars, and knowing how to say “no” can help you have a wonderful, prosperous December.
To help you in 2019, I want you to pay attention to what you spend this year. Then, I want you to take that amount of money and divide it by 10. If you can save that much from January to October next year, by November your budget is ready to go! If you can’t save that much, you’re probably spending too much on gifts!
Additionally, consider using layaway. This service had almost completely disappeared; however, it’s returning to many stores, I suspect as a result of competition from online sales. Layaway gives you the opportunity to pay for gifts before you give them rather than paying off credit cards afterwards. Both saving a gift account and layaway are great strategies for future years.
But what about today? Begin by looking for coupons, as they’re a great way to save money. Stores frequently issue pages of discounts because they know that many go unused. And yet recently, a large department store ran into financial trouble shortly after it quit issuing coupons. The big bosses decided that people would rather have the discounts built into the prices, but the idea backfired. People stopped shopping in the store because there were no longer coupons. So, the store brought them back. I guess we worry more about getting 15% off than we care how much we have left to pay!
By making a shopping plan, you will solve the biggest cause of holiday overspending—last-minute, panicked buying. The frazzled shopper trying to tackle the gift list on Christmas Eve makes a funny movie, but in reality you are likely to spend too much because you don’t have the time to do any comparison shopping. When you’re rushed, if you see what you’re looking for, you buy the item on the spot. If you can’t find it, you buy two or three other things as replacements. And the budget goes out the window! Instead, plan your holiday shopping in advance.
Before you buy anyone—especially your children or grandchildren—a gift, ask them what they really want. You may be surprised by the answer. Additionally, when they ask for a gift you don’t mind purchasing and could genuinely afford, tell them to remind you about it later. Wait and see if the latest irreplaceable item is a frequent request. Although there is no guarantee that asking their opinion or delaying the purchase will lead to their enjoying the gift, if they show continued interest, the odds go way up!
What do you do if you really can’t afford the gift your children or grandchildren want? Although I think stressing young family members with financial situations they cannot control is unfair, you can tell them that you can’t afford to spend that much money on the gift right now. Very likely, they don’t understand the financial impact of their request. Try to explain the cost of the item in terms they will understand, like the cost of a fast food meal, a gallon of gas, or a cell phone bill. They don’t have a financial context, so you need to provide one for them.
Additionally, explain to them that your family is prosperous because you love and care for each other, but there are other people who have more money than you do. This is a great lesson for them because regardless of their financial status, someone else will always have more money.
If you can help your children and grandchildren learn not to keep up with the Joneses, that’s a gift that will last their entire lives. Too many people suffer severe financial setbacks just because they think they need to own a certain set of possessions to match their perceived status. Although they know it’s silly, it still impacts their choices. Help the young people in your life avoid this trap.
Handmade with Love
All this advice seems to cover buying presents, which really shouldn’t be the focus of the holiday season. Consider making the items you give, instead. Homemade gifts and holiday crafts really are the best. The one thing people crave these days is more time, and when you give a gift that took time to create, people cherish your effort. You might also save money. Some festive tins and a little colorful plastic wrap set off homemade cookies to perfection. Just today, I received an advertisement for cookie baskets. The cookies were very cute, but they cost $9 apiece! The homemade version of this is exponentially cheaper and probably even tastier.
If you love crafts, make a lovely gift that your recipient can use during the year. There are many resources available to help with projects like this. Here’s an idea—why not make a beautiful Valentine’s or spring project and give it as a present. I always love receiving Christmas crafts around the holidays, but I’m always disappointed that I can’t use them until the next year.
Hi, it’s Marie again. Listen closely. This is important.
If you’re anything like me, “crafting sticker shock” might be holding you back from going bonkers on handmade gifts.
Your Instagram feed is full of luxurious yarn, cheerful fabric, colorful thread, vibrant quilts. But the price of all those materials, PLUS the patterns, PLUS the online courses to learn the techniques, seems pretty expensive for “just” a hobby.
Well, I found the solution: the Handmade With Love Super Bundle is back for a super short, 2-day sale and then it’s gone for good! Here’s the deal: you get 200+ digital projects, patterns, courses, and step-by-step tutorials, all for the sweet price of $29.97!! (If you had to buy it all separately, it’s worth over $1000!). Remember, this deal expires tomorrow at midnight!
Look at all of the fun things you get, just in time for those homemade holiday gifts or a new hobby for the new year!
The Best Gift of All
Remember also that not all gifts come in boxes. The holidays are the perfect time for your family traditions. I know December can begin to feel like a sprint to the finish line, but being together is often the greatest gift. If your family really doesn’t have any traditions, this is a great year to start them. Maybe you want to look at Christmas lights or go ice skating. Maybe everyone gathers at the table and makes cookies. Encourage every family member to share the one thing they would like to do during the holiday season. Then, put those events on the calendar. I know, you’re telling me that you don’t even have time to eat dinner together. Well, that might be a great place to start! Order a pizza, or better yet, make one yourself. I can almost guarantee that years from now, those nights will be what everyone talks about.
In addition to learning the value of family, take the holidays as an opportunity to teach your children and grandchildren to be generous to others. This time of year is a great opportunity to stuff stockings for Secret Santa programs or feed the homeless at a shelter. But don’t stop there. All of us are less generous once the new year begins and our daily lives crowd our thoughts. Feed the hungry in January, too. Further, help your children find opportunities to volunteer—maybe cleaning up a neighborhood park or helping build homes for a local shelter. Yes, these activities look great on college entrance forms, but help your children see the value of giving without expecting anything in return.
The holidays shouldn’t be stressful. Put on a pot of coffee, then over that steaming cup, create a plan to make this year the best ever. And with just a little thought and creativity, you’ll have the best January, too, when no big bills arrive.
ABOUT THE AUTHOR
CERTIFIED FINANCIAL PLANNERTMpractitioner, Peggy Doviak, knows how stressful money can be. Her fifteen years as a financial planner and a national speaker to both financial professionals and consumers have convinced her that most people fear their money. That’s why she wrote 52 Weeks to Prosperity – Ask Peggy Doviak: What Your Accountant, Banker, Broker & Financial Adviser Might Not Tell You. In it, she addresses 52 financial planning topics to enable individuals to become comfortable with the vocabulary and issues of their financial lives, so they can participate in the planning process with a professional. Learn more about Peggy on her website, www.peggydoviak.com.