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
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