Our strategies will ease financial stress
at gift giving time. What, no gift budget?
Here's how to create and manage one.
Holiday shopping used to leave me flat broke until April. Then, no matter how carefully I shopped, Mother’s Day gifts in May would leave me scratching for Father's Day funds in June.
I finally vowed to develop a year-round gift budget and keep control of it. Through trial and error, I found some really effective strategies. My daughter Diane and various friends have tried them, and now they're believers too!
Here are the Top 3. They’re not difficult, and there’s nothing particularly original - or magic - about them. But all three sure work!
Spread Your Holiday Gift Shopping Over the Whole Year
If you purchase holiday gifts one or two at a time, your pocketbook won't be plagued by that all-too-familiar flu$hing sound in December.
- Take advantage of sale prices year round: February white sales, spring clearance sales, back-to-school sales, and so on. Is your sister’s birthday in July? Keep it in mind when you check out the January sales.
- When November rolls around, take stock of the holiday gifts you’ve accumulated during the year. If you’ve purchased gifts for half the people on your list, you can probably finish your shopping on half the gift budget you usually need in December.
- Spend a few extra minutes looking around, whenever and whatever store you're in. Do you see a perfect gift for your brother, or your mother-in-law, and is it priced right? Grab it!
- When you travel, check out shops that carry regional specialties and locally crafted items. You will probably find an unusual gift idea that's perfect for someone on your list.
Year-round gift shopping relieves holiday stress, and you'll be pleased at the savings you realize by shopping seasonal sales. As a bonus, you'll save time by making fewer shopping trips and avoiding crowded stores and parking lots at holiday time.
A tip to remember: inexpensive gift ideas can be the basis for elegant gifts! With a little imagination, there's no need to deplete your gift budget - even for the most special person on your list.
Affordable Gift Ideas will help get your creative thinking on a roll.
Your Monthly Cash Flow May Provide a Bonus
Most bills are due monthly… rent or mortgage, utilities, credit cards, so it makes sense to budget on a monthly basis. For purchases that occur more often - like food, gasoline or transit fare, and pocket money - you might spend 1/4 of your monthly budget for these items each week (or 1/2 every two weeks). But the budget still revolves around the big-ticket monthly bills.
People who are paid weekly can make a monthly budget based on four paychecks, or 48 per year. However, you receive 52 paychecks each year - that's four EXTRA paychecks - one every three months.
People paid bi-weekly can make a monthly budget based on two paychecks per month, or 24 each year. However, you receive 26 paychecks each year - two EXTRA paychecks that occur approximately 6 months apart: one in the spring/summer, the other in the fall/winter.
These "EXTRA PAYCHECKS" are OUTSIDE of the
regular monthly budget. They need to cover only
WEEKLY expenses (food, gasoline or transit fare, etc.).
The rest is gravy...
Voila! - Funds for a Gift Budget!
Managing your gift budget:
You can open a special savings account for your gift budget, or keep the cash in a cookie jar. Or, as I do, you can leave a gift fund in your checking account, but hide it away so you won’t be tempted to spend it on something else. Important: separate your gift funds from your checkbook balance!
It may seem quaint in the age of electronic banking and online bill paying, but it's still very useful to keep an old-fashioned, pen-and-paper checkbook register. For one thing, it's easier to "hide" special funds where you won't see (or spend) them. Here’s how:
- Important: Keep your checkbook up to date! Between monthly bank statements, pay attention only to the balance in your checkbook and ignore the balance or "available funds" shown by the bank on ATM machines/receipts or online.
- Set up a "Gift Budget" record on the back page of the check register. Deduct Gift money from checkbook balance, and enter it on the Gifts page. Now your gift funds won't be included in your visible checkbook balance (and spent by mistake).
- When it's time to purchase a gift, transfer the appropriate amount back to the regular page before withdrawing cash or writing a check for the gift. This keeps the check/ATM transaction record in order. If you withdraw cash for a gift, keep it separate from your other cash.
- To reconcile monthly bank statements and checkbook register, treat the Gift Budget balance as an outstanding check.
Again, be careful when banking online or at an ATM! Your "available funds" appear temptingly large because they include your gift fund. Resist the temptation!
If you open a savings account for your Gift funds, you may wish to link it to your checking account so you can easily transfer funds in. But remember, it's just as easy to transfer funds out, so take only what you need FOR GIFTS.
One way or another, I strongly recommend that you separate your Gift Budget from your other funds, so it will be intact when your next gift occasion rolls around.
Now, here's the best strategy of all!
Do You Save Pocket Change? This works better!
Try saving $5 bills. You heard me! This is the best way ever to accumulate some meaningful savings and really beef up your gift budget. You will be truly astonished at how little you miss a $5 bill, and how fast they pile up. I started doing this when my income was very, very small, and I can assure you it works even on the tightest budget.
Here’s WHY it works:
- Saving $1 bills is like saving pennies – too much bulk for the paltry amount that accumulates. (Besides, I tried saving $1s but kept needing them for school lunch money, highway tolls, etc.)
- Putting aside $10 bills makes too big a dent in your pocket money.
- For items costing under $5 you can usually come up with a few $1s and pocket change to avoid spending your $5 bill.
- Before you break a $10 or $20 bill for something costing under $5, you may think twice about whether you really want the item all that much (this alone helps your overall budget!).
- If you DO decide to break the larger bill, you’ll probably get a $5 bill in change, which you can stash away without much missing it. This could easily happen a few times every week!
Here's HOW it works:
- Sock the $5 bill away in a different pocket or section of your handbag and pretend that you spent it in the transaction. Do not put it back with your other bills! After you have done this for a few weeks, you’ll find yourself separating $5 bills automatically – you’ll sort of mentally disqualify them as cash!
- When you get home put your $5 bills away in a safe, inconvenient place of their own (out of sight, out of mind!). One of those boxes that checks come in is perfect and will hold $1000 if held together with a fat elastic band.
- Band your $5s together when you’ve accumulated $100 (it takes only 20, so it happens sooner than you think!), to keep your stash tidy. If you like, you can deposit them in a savings account or add them to a gift fund hidden in your checkbook.
If you make this strategy a habit,
you'll save a few hundred dollars or more
over the course of a year!
top of: Gift Budget Strategies
Logo photo by Jane M. Sawyer, courtesy of morguefile.com
Other graphics courtesy of Microsoft.