Christmas is less than two months away. If you haven’t already started, the time for budgeting and planning is now. I know some people don’t want to even think about Christmas until December, but you need to plan ahead to keep from overspending on gifts.
Two months is a decent amount of time, but honestly I like to have a whole year to save money and start thinking about my gift budget. That means that we start planning for Christmas in January. You may not have done any planning so far, but that’s OK. There is still time for you to organize and create a manageable budget.
Make Your Christmas List and Check It Twice
The first thing to do is create a list of all of your gift recipients. It may include lots of people or it may be a small list. The amount of people doesn’t really matter. At this point you are trying to think of everyone you want to give a gift.
Our list always includes immediate family and some extended family, teachers, work gift exchange for Mike and one or two Angel tree gifts at the church. I usually will add one or two “mystery” people to the list. The “mystery” people are my gift cushion so that if I forget someone when making my list there is still a line item for them in my budget.
Set Price Limits
Once you have made your list of gift recipients and double checked it, you need to decide on pricing. You have two options. You can decide how much you want to spend total on Christmas gifts and divvy that up between your recipients. The other option is to assign a dollar amount to each person on your list. You may find that trying to divide up a total amount doesn’t leave enough for each person on your list. On the flip side assigning dollar amounts to each person could result in spending more total than you would want. Either option works, but you may need to make some adjustments.
When we create our Christmas gift budget we assign a dollar amount to each person. We have a dollar amount for nieces and nephews, a different amount for our kids, another amount for our parents and another amount for our siblings. This may seem confusing, but is actually really easy. The relationship to us determines the price range of their gift. I know this may seem cold and calculating, but it’s a very organized way for us to plan our budget. We still find great gifts regardless of the amount of money we spend on each person.
Trim the Fat
Now you have your list and your dollar amount, but things aren’t adding up. No matter how you crunch the numbers there either isn’t enough budgeted money to go around or you are planning to spend more than you would like. Now is the time to take a hard look at your list and decide if you really need to get gifts for everyone on your list. If you have a large extended family or a big group of friends getting a gift for every person can really add up.
Come up with some alternatives. There are nine kids in Mike’s family and four of his siblings are married. That is a lot of gifts if we gave something to each sibling and spouse, so instead we do a gift exchange. The cousins also do a gift exchange. In my experience most people are very receptive to a gift exchange. They are in the same boat as you and are probably trying to make Christmas more affordable.
Another option would be to go out to eat or to see a movie with a group of people. In most cases spending time together creating memories is just as enjoyable as a gift. Why not go out to eat with those people and enjoy their company as well as a meal?
If you are giving gifts out of obligation you need to have a serious talk with your spouse or yourself. Why do you feel obligated to give a gift? If it’s because that person always gives you a gift, then maybe you can suggest lunch or a movie. If it’s your 90 year old Great Aunt Tillie who always sends you a Christmas card, but you haven’t seen her since you were a kid, you may be able to send a homemade gift, or something created by your kids. In that instance it really is the thought that counts.
Now that you have your list and dollar amount, you need to organize. You need to create a master list or grab the free printable list below and fill it out. In years past, I would have my list of people and dollar amounts on little notebook pages and items purchased and prices. There would be lots of crossing out with pen and new amounts entered and cross checking with piles of receipts. It was long and tedious and only I knew my system. If Mike was purchasing gifts, he still needed to check with me for all information. I couldn’t just hand him the list to go shopping. Mostly because it was multiple pages of crossed out chicken scratch that probably only made sense to me. It worked, but was time consuming for me.
Enter the Gift Master List. This list has everything in one place. I have created a space for each person, the dollar amount, gift idea, actual gift purchased, gift receipt, due date, gift wrapped, gift ship by date, order confirmation number and website, and estimated delivery date & tracking number. Now if Mike will be doing some of the shopping all I have to do is hand him the master list. He will have everything he needs to make some purchases. This will take some of the pressure off of me. Now I won’t be the only one who knows what is going on.
Or even better, copy this Google Sheet to your Drive and share it with your spouse.
Show Me the Money
You have your Gift Master List in hand, but how are you going to pay for everything. Ideally you would have a Christmas gift line item in your personal escrow account. Mike and I put a little money away each month toward Christmas, so that once October rolls around and I want to start shopping the money is there. If you don’t have a Christmas nest egg you need to look at your finances. First things first, figure out how many paychecks you have between now and Christmas. Decide how much of each paycheck can go toward Christmas shopping. You may get paid weekly, monthly, bi-monthly or commission, whichever it is commit a portion of each pay to gift purchases.
If you don’t have enough from each pay check to cover gifts you need to see what things you can go without for a few weeks to save some money to put towards gifts. Eating out, a bottle of wine, or new shoes are extras. Those types of things can be put on hold to afford gifts. Maybe you could try a no spend month for November and only purchase the bare essentials to free up cash for gifts.
Still not enough money? Perhaps it’s time to reevaluate your priorities in terms of gift giving. You may need to cut people from your list, lower your budget for each person or consider giving some homemade gifts. Do not, I repeat do not, go into credit card debt to give Christmas gifts. I guarantee that every reasonable adult would rather not get anything from you than have you accrue debt just to get them a gift. I can’t say the same for kids, mostly because they don’t necessarily understand what debt is. If you need to cut other people from your list or lower your budget for certain people to give your kids the Christmas you want to give them then go for it.
If your kids have been conditioned to expect lots of presents with a hefty price tag then you will need to start reversing that mind set. I wouldn’t suggest drastic changes this year if you haven’t at all prepared them. A small cut back in gifts or budget will help your wallet and your kids won’t feel like they have been deprived. It is all what you make of it. You can make it an amazing Christmas with whatever gifts you give them. Of course Santa plays a role here and in our house if our kids say they are going to ask Santa for something we say that’s fine, but Santa will ask us if it’s OK to bring that gift.
Also try to explain the true meaning of Christmas. Whether you are religious or not, the holiday means more than just getting lots of gifts. In our house Christmas is the celebration of the birth of Christ. Our kids refer to it as Jesus’ birthday and know the reason that we give gifts on Christmas is to celebrate the gift of Christ. Whenever they start getting caught up in Commercial Christmas we remind them why we are celebrating in the first place. This brings them back to reality and helps them to be truly grateful for the gifts that they receive.
If you are going to cut back on gifts for your kids make sure you relay the message to other family members. It can create confusion for your kids if they get more gifts from Great Aunt Tillie than they do from their parents and Santa.
You figured everything out. Your list is made and your wallet is bursting with cash. Time to get shopping! Take your Master Gift List, however many pages it is, and attach it to a manila envelope. You can either take the whole envelope and list with you when you shop or just make a smaller list to carry with you and leave the envelope at home. Ideally you will have an electronic version of the list, but the envelope is needed for the receipts.
Make a few purchases and always ask for gift receipts, gift boxes if free, and always accept the complimentary gift wrap when offered. When you get home stash purchases and then sit down with receipts and Master Gift List envelope. Use your receipts to record all necessary information on the list and deposit gift receipts into the envelope. Keep regular receipts separate to record purchases in your check book. Place them in the envelope if you feel it is necessary to hold onto the regular receipt as well. We don’t get gift receipts for our kids’ gifts, so we always hold onto the regular receipt.
Always fill out the master list after shopping for gifts. At a quick glance you will know who you have shopped for and how much money you have spent. You won’t need to check multiple lists and shuffle through a pile of receipts. Multiple people can do the Christmas shopping without confusion as long as they know the system. When it is time to wrap the gifts you will have all the gift receipts in one place, preferably labeled with the recipient’s name, and you will know which gifts are needed before December 25, such as teacher gifts.
The weeks leading up to Christmas will be organized and result in less stress. You will know and be able to stick to your budget, because you are organized. In January after the dust settles and the bills start rolling in Christmas gifts will not be one of the bills. You won’t be paying for last Christmas in January along with credit card interest. Instead, you will be saving for next Christmas and earning interest (because you set up your personal escrow account, right?).
Imagine that feeling of no Christmas debt and actually getting ahead. Christmas is that much more enjoyable when you are prepared and know you have the money to afford it.
What do you think of the Master Gift List? How do you plan and track your Christmas budget?