Tuesday, December 2, 2008

Unplug the Christmas Machine, part 2

Another worksheet Kim had me fill out was about the amount of money spent at the holidays. At the top of the page, it said, "In addition to the obvious expenses of gift giving, there are many hidden costs to Christmas. This list will help bring them to your attention."

Here is the list, taken from our "textbook" for the week. (Kim asked me to place a check by all of the expenses that were part of our celebrations last year, so I did that here as an example.)

buying gifts X
craft supplies X
gift-wrapping expenses X
mailing gifts X
higher phone bills
extra dry cleaning
services such as housecleaning and carpet cleaning
higher food bills X
travel expenses X
loss of paid work hours
extra linens/bedding for company
higher entertainment costs X
tree and greenery
photo supplies and developing
more convenience meals during the holiday rush
Christmas cards X
postage stamps X
new holiday clothes
holiday tipping
donations to charities X

Whew--just reading that list can send us into a tizzy! It really is surprising how all these items add up.

Other questions to consider from the worksheet: What is your estimated total for holiday spending last year? Do you stick to a holiday budget? Is there clear communication between you and your spouse regarding holiday spending?

Thinking about these questions and our expenses and was another eye-opening exercise. It is accurate to say that many of the items on the above list are "hidden" costs of Christmas. I'm sure we can all find an area or two where we could cut back on our holiday spending.

Here are some ideas from the book on ways to save money on Christmas expenses: use cash instead of credit to pay for purchases; compare prices; buy or make inexpensive gifts (such as food items) and upgrade them with beautiful but simple packaging; consider the weight of an item if it needs to be shipped; buy wrapping and decorating supplies during post-Christmas sales to save for the next year.

The authors suggest keeping an expense log in which you record all money spent in the following categories: food, gifts, entertaining, travel, charity, family entertainment, decorations, and misc. This allows you to get a better picture of what you are actually spending, and will help you consider your budget for the following year.

Eric and I use the cash system all year long. Each month, we set aside a specified amount in various categories, including gifts and travel. Because we don't spend money each month on travel and gifts, these funds accrue throughout the year, so that by Christmastime, we don't feel the impact of spending in those areas. This also gives us a set budget for those categories, and since we use cash, we can see at a glance how much we have left to spend.

Interesting to note: According to a Gallup report, “Americans’ projected average Christmas spending this year, $616, is the lowest in Gallup’s 10-year history of tracking this question in its current format, and provides further evidence of the heavy toll the current economic turmoil is taking on America’s retailers.”

What are some of your ideas for cutting back on Christmas spending? Do you use a holiday budget?

photo credit to Shutterberry


Edi said...

We do not have a budget for Christmas - though we look at our overall financial situation quarterly and discuss areas that may have over (or under) spending.

Since I shop for gifts throughout the year - the spending for Christmas is spread over 12 months. One problem with that is my record keeping. I might forget that I already bought something for XYZ and buy something more. In most cases that is OK since I can just hold onto it for a birthday etc.

One way to cut back on spending is to just realize that you don't have to spend. Just b/c certain lists appear in magazines etc. that talk about giving a gift or special Christmas tip to: the mailman, your hairdresser, the sanitation man, your children's 4 teachers (plus room helpers), in addition to all the "obligatory" gifts for immediate and or extended family - it doesn't mean you HAVE to.

If you feel like you have to, and you don't have the money or the time or the desire - then where is the blessing in "it's more blessed to give than to receive"?

Some of the overwhelming-ness of Christmas is due to poor planning and doing too much.

Kendra said...

We are trying to keep it small this year. There is very little that we feel we actually need and we feel a bit guilty writing down a bunch of wants on a list.

Normally Marc and I get each other a few gifts - and do love to find special things for each other so it was hard to decide otherwise. Although it sounds like a lot, this year, we are going forgo giving "secret gifts" and get new bikes for us. We've been talking about doing this for a long time and it feels good to use Christmas money to do this (plus several gift cards we've saved up to a sporting goods store).

So are we cutting back? I'm not sure if the amount we spend will be less, but buying items that we would have bought come spring anyway saves money in the long run.

gail said...

we used to budget for Christmas when we had more money to spend. i would put on a huge open house party and it would cost alot! but oh so fun!!! good memories. i also used the cash system for many years for gifts and such. i'm getting back to it now.

this christmas will be very light in the budget. we are only doing stockings. we are doing minimal gifts for family. i'm going to have 2 couples over for dessert but have money in the grocery budget for that.

ask me in a couple years after mike graduates =) hee hee.

hugs, gail

Ginger said...

I have always budgeted $200 for my son's Christmas presents. There were many years when I didn't need anywhere near that. Now he is into the game systems. His father moved back to Colorado 6 years ago and has given him nothing for Christmas since 2001. I guess I feel the need to make up for him. I have cut back on the food budget. I used to make candy for a lot of people, but it just got too expensive.

Mary said...

We have a budget for Christmas, and we do follow it. We also save up all year, but we do it in my bookkeeping software...we're all electronic over here. Ironically, with everyone else cutting back on spending this year, I lost the battle and had to agree to up it this year - but just for the kids. We only get the kids 3 gifts - one "big" and two smaller ones, then a few trinkets and notes in their stockings. I agreed to up our budget for the one big to $50 this year.

We keep costs down by making gifts - potholders or heating pads or bread mixes. We also keep the teacher gifts down by not contributing to the class gifts (they run $5-$10 contribution per kid around here!) and instead get a votive off the $1 shelf at Yankee candle and little notes from the kids that we put into a little booklet form.

Little things, but multiply it by 4 kids and it makes a big difference!

Ewokgirl said...

We're actually not cutting back. We've never gone overboard on Christmas spending, so there's not really any need to cut back. Besides, I'm big into bargain shopping, crafting, and buying things as I find them. I'm never overwhelmed in the gift department come December.

As for budgeting, I don't have a set budget for Christmas. I just pull a certain amount of cash out every pay period for gifts in general.

Christmas is costing us a tad more this year because with the Christmas program the youth are doing as a fundraiser, we're eating some of the costs ourselves, rather than asking for reimbursement from the church. The church very generously pays for Steven and me to go to camp each summer, as well as paying for all the other activities we do with the kids. (Church policy is to pay for the youth workers.) We figure the least we can do is not cut into the fundraising profits with some of the necessities. But if we couldn't afford to do this, we wouldn't.

milissa said...

I don't do budgets for the holidays...I'm sure I spend more than some...but this is an area I'm not willing to give up. For a couple reasons. For starters, my "love language" is gifts. So it's a big deal to me to buy gifts for my loved ones. My loved ones live far away. So I don't get to do much with them or for them throughout the year. Finally (and perhaps the most important factor) is my budget is not burdened by gift giving. I realize that I am very fortunate in this area. I work hard and am responsible with my earnings (Thanks Dave Ramsey!) So if I want to buy a gift for someone, I can. I'm sure if my budget was burdened with gift giving, I would be singing a different song.

There was a time I felt overwhelmed with gift giving. But through the years, I have significantly shortened my recipient list. Now, rather than buying for "everyone", I just buy for a few loved ones. I guess in that manner, I have cut my spending.

And one last point, not everyone's "love language" is gifts. "Words of Affirmation" people may enjoy a heartfelt note much more than a gift.

If you haven't read The 5 Love Languages by Gary Chapman, I highly recommend it. It's eye opening...you may be stressed about buying a gift for someone that would rather be appreciated in some other manner. As a "gifts" person, I'm all about the gifts and I'll buy for my loved ones if there is an occasion (big sibling gift, baby gift, birthday, graduation, holiday...) because it is the way I express my love and appreciation. But I realize this isn't the case for everyone...and it's something to consider...if the gift giving stresses you out...it may be more than the budget or perception of commercialism. Figuratively speaking, you may feel that you are being forced to speak a language other than your native tongue...and that can create anxiety.

milissa said...

I just realized that my comment may sound like I think YOU don't like the whole gift thing at all...and that's certainly not how I meant it. That comment was meant to be interpreted as very general...and for anyone that can identify with some of those points.

Angela - Life w/ Two Busy Boys said...

Great series!

mer@lifeat7000feet said...

Hi Carrie...another great post. We generally don't overspend.  We do set a budget to include things like gifts, wrapping, food, postage, cards, etc and we stick to it.  I've made a similar list over the years of expenses that "surprise".I also buy most of my wrapping supplies AFTER Christmas, and I rarely buy anything that isn't on sale.  We also draw names among the adults in the family and set a price limit on how much to spend.  PS--Surgery went well...my dad is still in ICU.