Maximizing Christmas...

I know it is barely Halloween, but once the candy has been collected people's minds turn to Christmas. My thought is, with a bit of forethought and proactive discussion, one can truly make Christmas work without blowing your budget or increasing debt by reducing your expenditures and planning what gifts you will receive.

Yes, I am sure this post will be rubbing some people the wrong way, but the fact is many people like help with their Christmas shopping, and just because it is better to give than receive really doesn't mean that you won't be receiving in reality. Taking advantage of this fact could help with your debt issues.

Giving - I love Christmas! My favorite part is shopping (especially for kids), but let's be honest this racks up huge dollars. If you have the guts to be honest with your family and friends, let them know of your position and let them know you will need to scale back this year. If your family is receptive, some scale back options could be; pulling names to reduce the amount of gifts to buy, setting spending limits, agreeing to only homemade gifts (needs some creativity, but can be huge savings while still being thoughtful), or maybe do some volunteering as a family instead of gifts.

Receiving - Here is the touchy part. No one should ever expect gifts, or be able to dictate what people buy them, but sometimes providing some input could help you out instead of getting yet another reindeer sweatshirt. If people ask for your input, give it!! I can guarantee that almost everyone you know and love would rather spend money on something you really want then to find out that you don't really like their gifts. If they haven't asked for input, be up front and make suggestions, just remember they may not necessarily follow your suggestions, and if you have asked to scale back Christmas (as in above) don't expect much in return (if anything).

However, if you have a project you are working on and can't really afford, your kids need items for school or new clothes, or there are things that you need from around the home, why not take advantage of this opportunity to keep your life at an even keel and avoid further debt.

Here are some tips to make it easy on everyone:

Know your audience: I don't know your Grandma, but you do. Make sure you know if they would be receptive to "suggestions." Sometimes you just have to deal with a new pair of footie pyjamas because the tradition is more important to that person. Some people may also be offended by you making suggestions on your own gifts. Determine whether your audience will be more welcoming to more generalized comments (ie. they think they came up with the idea themselves) or more directed conversation.

Know their limit: Granted circumstances change from year to year, but we can generally gauge what people's spending limits are based on the gifts we have received in the past. Obviously, don't ask for a new water heater from Auntie Beatrice if she generally only spends $25. Make suggestions based on the limit, or indicate that contributing towards a bigger project may be the most beneficial for your life right now.

Remember that you may not be the only one in financial crisis: Just because your parents normally drop a mint on you at Christmas time does not mean that they can or are willing to do it every year. The economy is rocky and their retirement may not be as stable as once thought. Bear in mind that they may be pinching those pennnies just as hard as you are, even if it doesn't show.

Remember and Communicate your reasons: Don't forget why you are trying to plan your Christmas- Debt. This is not a kid in the candy store type mission, it is to try and keep your life in order. Be honest with your family and friends and they will be far more likely to be receptive then coming off like a greedy little child.

Good luck! I'm asking for drywall this year.

Christmas in September...

My budget got a nice little reprieve this week My husband's family has decided to draw names for the kids for Christmas, which now means that instead of the regular eight children (not including my own) that I have to buy for, I now only have to shop for two! Plus, they decided to put a cap on the present cost to make it "fair." WooooooHooooo!

Don't get me wrong I LOVE Christmas! And this is actually a little bit upsetting, as Christmas shopping, especially for children, is probably the best part. Every year my husband and I go to Toys R Us and spend hours trying out all the toys and deciding what to buy. It really makes you never want to grow up (if you ever really do).

However, this is a nice break on my tight budget. Plus, the money I save can go on my debt, or to the unexpected Christmas expenses that always seem to creep up, no matter how prepared you think you are!!

Beware - Month 1 credit card bills are coming!!

The gift budget...

I love to give presents, thus no surprise I LOVE Christmas!!! My big problem with Christmas is that I spend far too much money, charge it because I don't have the cash, and am always in a huge rush to get my shopping done so sometimes gifts are not as thoughtful as they could be.

To combat my Christmas issue (and other gift giving times of year) I implemented the "gift budget" this year. To make the gift budget, I used Excel but you could take any sheet of paper (old napkin, whatever). Write down who you need to buy for this year including birthdays, christmas gifts etc. Don't forget your own kids, spouse or parents. Put an amount that you think is reasonable to spend for each person. Add a buffer for weddings, housewarmings, babies, and bridal showers that just spring up (I budget 3 of each) or ones you already know about in the year. Add up the amount you intend to spend in the year, divide by 12 and include this amount in your household budget for the year. If it doesn't fit in your budget you need to pare down on your gift buying intentions.

How the system works:

Having the money when you need it: You will actually be saving for the holidays and other events before they happen. No charging.

Being cognizant of your spending and on what: Having the budget has helped with not only decreasing what I spend on gifts, but I have actually had more thoughtful gifts because I know I have the money to buy them whenever I see something I like (and I think about it every month), as opposed to rushing out the day of and buying the first thing I can find (regardless of cost).

"Budget Wins": In some cases (more and more frequently as you get into the idea), you will be able to come in under budget for items on your gift list. I call them "Budget Wins." You have a few choices in this matter. a.) Do nothing and keep the extra money in the account for overages (see below); b.) reduce your payment next month by the amount of the win freeing up some cash flow; c.) reduce your payment in December. This one is really nice, since if you keep "winning" in your little budget game you may not have to make a payment at all in December making the holidays much easier. See tomorrows post for easy ways to make "wins" in your gift budget.

Overages: Sometimes $20 is just not enough to get that china cat you know that Grandma will love, this is where your decision making comes in. You can either a.) use up your existing "budget wins" if you have decided to not adjust your payments or pay the difference from your own spending money. This may make you think twice about the gift.

Getting Better: Make sure you note on your budget what you actually spent on a gift to identify wins and overages. In the following year you can tweak your gift budget to be more accurate.

Miscellaneous Items: I mentioned slotting in money for random (or planned) weddings, babies, etc. If some of these events don't seem to be occurring, (ie. it's mid October with no pending babies on the horizon, reduce your payments in upcoming months (or December) to offset the lack of need.

Stats - no change