Can you guess how much $$ you spend on gifts per year? How many gifts do you purchase outside of your own family and who are you giving them to? Teachers? Neighbors? Friends? Co-workers? There are endless ways to spend your money on gift giving and it’s costing us large sums of money. Let’s delve into ways that we can cut down or even eliminate these costs.
Years ago, when I was going over my end of the year spending habits, I discovered that my gift-giving category had the largest increase of all of my expenditures. Upon further review, this was because I had several friends who had recently had babies and I was attending a lot of baby showers in addition to birthday parties for more of those babies. These expenses were in addition to what we were already spending on our family and our close friends. So, this increase was driving up our expenses a lot more than expected. Luckily, there are a number of ways that you can reduce the amount spent on gifts for others.
BUY FOR LESS PEOPLE
How much do you typically spend on each person that you buy for? $15? $20? More? A lot of that depends on who they are to you. For a sibling, you likely spend more than for a friend. The most obvious way to reduce your annual expenditures for others is to decrease the amount of people you buy for. This may not be too hard for some to reduce this list, but if you are part of a large family, it may be much difficult. This is especially true if your family has a history where everyone buys gifts for everyone else.
This was not an issue for my immediate family, but with including my cousins, expenses had gotten rather large. Our solution was to draw names for the cousins. Even though there were only four cousins, three of us had spouses and we had routinely purchased gifts for all of the cousins and their spouses making it a total of seven gifts. You see how easily this could add up. Moving forward, we decided to only purchase one gift with a limit of $30 for one of the seven adults. This has made us all happy as well as our wallets.
Speak to your family to see if they are open to drawing names instead of buying for each person. Everyone would probably be happy with this situation, especially if the gifts have gotten extravagant over the years. Most people don’t enjoy spending excessive amounts on gift giving, but they’ve gotten themselves into a situation where they’ve exchanged gifts with someone for so long and would feel bad if they stopped now.
Another way to reduce the amount of people you buy for is to decrease the number of gifts that you exchange with friends. My family friends and our family agreed that with our growing families, the gift expenses were getting out of hand so we decided that we would just do greeting cards for the adults and maybe get together over dinner. Our second agreement was to only purchase gifts for the children until their 1st birthday. After that, we agreed there could be gifts, but only if they were homemade. It was a nice change and encouraged our children to do more crafts like making ornaments and to channel their inner Martha Stewart.
SPEND LESS MONEY
Even if it you are able to reduce the number of people you have to buy for, you can add additional savings by decreasing the amount that you spend on each person. For example, start by skimming $5-$10 off the amount that you normally spend. Keep in mind that you can accomplish this by buying the item on sale, discount, or with coupons. The slightly reduced amount of money buys similar gifts anyway, so it will generally not be missed or obvious that you are spending less. However, your wallet and your checking account will surely notice the difference.
Since there are such variations in prices across stores, sometimes you can easily pay less by simply shopping at another store. What if you can find the same thing at Marshall’s? Wouldn’t you prefer to buy it there? Find my blog “Clothing Hacks” (April 5, 2021) for a list of all types of places to find cheaper merchandise.
If you are a secret Santa or buy for a lot of young children, try shopping at the dollar store for merchandise and stocking stuffers. You can fill the stockings for the entire family for a reasonable amount. One thing that you MUST buy there is greeting cards. They are $.50-$1 each. I know right. You can’t beat those prices. They may not have a huge selection, but you can find some good ones. You can easily spend up to $10 on one greeting card and I think that’s just ridiculous. You may not find a card for everyone on your list at the dollar store (I usually do), but you should be able to find many. Even buying for part of your list can make a big difference in your savings. Before I hit the other stores, I always scour the Dollar Store to see what I can tick off my list first and then go from there.
SET A BUDGET
A budget may seem obvious and important to many of you, but some people tend to shop willy nilly without having a cap on the expenses for each person. Be honest with yourself (and your budget) on what you can actually afford and work around that.
Let’s go over the steps to do this.
· Set a dollar amount to spend for the year and then break it down per holiday and event.
· Make a list of everyone that you need to purchase for throughout the entire year. Christmas, birthdays, Easter Baskets, holidays, etc. Literally list them all out. The first time you do this, it can be time consuming, but in future years, very easy to edit and adjust going forward each year.
· Calculate and set out the amount available to spend on each person per event.
(Simplified) Example: The amount that I can spend on gifts for the entire year is $2,500. That includes the holidays of Valentine’s Day, Easter, Mother’s Day, Father’s Day, 8 birthdays, and Christmas (Personalize the holidays for your family). Being that Christmas is a much larger event where I’ll be purchasing for more people, that will get the majority of the annual budget. Play around with the amounts that you spend on each category to figure the best mix.
$1,750-Christmas
$450-Birthdays
$100-Valentine’s Day
$100-Easter
$50-Mother’s Day
$50-Father’s Day
**Let’s breakdown the category of Easter for easy reference and understanding. I have three children so I want to split the $100 between them for their Easter baskets, cards, and treats for my husband and I. You can see how detailed this can become for Christmas.
So, how do you know how much to budget for the year? Should you just pick a random number out of the air? Nope! The amount will vary depending on the amount of people that you have to purchase for, your income, and how many events that you purchase items for. A good place to start is 1-5% of your net salary. Obviously, you can spend less, but try not to spend more. You may have to wiggle with it for a few years before you find the sweet spot that works for you, your family, and your bottom line.
GIFT OF SERVICE
The next topic we’ll discuss is giving the gift of service. Doing this will typically add little or no expense to your budget and can mean so much more to the recipient than a store-bought gift. The gift of service can be anything that can help the other person. Some examples might include making meals, babysitting, house cleaning, errands, pet sitting, or yard work. These are things that take your time (and maybe some food purchasing), but are so much more special and helpful.
When we had young children, my husband and I gave a family friend a night of babysitting so she and her husband could go out on a date. She had no family in town and they only had that luxury when relatives were visiting. Our children were the same age so it was easy to offer. If you have a friend who works long hours (and you don’t), you could offer to bring a meal over once a month for a year. My mom does this for her sister. She cooks her favorite meals. You have endless options, so use your imagination.
ASK YOUR FAMILY
We all know that we have both purchased and received gifts that didn’t quite hit the mark. How great would it be if we could avoid that from the start? It would be pretty amazing, in my opinion. I know that every family does it differently. Some give their family members detailed lists of items that they want and others just let it be and hope. While growing up, I spent an amazing amount of time going through the Sears and JCPenney Catalog circling things prior to Christmas. My mom tried to purchase things (not everything) from our lists because she wanted to give us items that would be loved and appreciated. I still think this is the most practical system even today.
You may be able to save a lot of time, energy, and money by purchasing what you know the recipient actually wants. I’m not saying that you can’t throw some surprise items in there, but my personal recommendation is to stay mostly focused on what they state they will enjoy. In addition to actual items that they want, you may want to ask them if they would prefer alternatives to gifts. Many older people are trying to get rid of things and don’t really want more gifts and “things” in their life and home. Grandma may have all of the sweaters and kitchen supplies she needs, but would love for you to come over for dinner or help her clean out the garage. Or maybe even the family could come together to buy a year of housecleaning for her. Young families may appreciate babysitting gifts and your teens might just want to go on an alone outing with a parent or relative. Your family may even be willing to forgo actual gifts entirely and decide on a family picnic or potluck barbecue. The important thing to remember is that instead of spending a lot of money on something that the recipient may not even want, it’s a better idea to connect with them to find out what they would appreciate and enjoy.
Buying gifts can be an expensive endeavor, but it doesn’t have to leave you defeated and broke. If you follow these gift giving hacks, you’ll come out of the situation with more sanity and dollars in your bank account. Never lose sight of what your goal is and what to do to get there. What is the first hack that you’re going to try?
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