6 Ways to Keep Your Holiday Gift Giving Costs Reasonable

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The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans, where she shares her family’s journey to healthier living and paying down debt.
When my husband and I were first married, we had very little extra money.  That first Christmas, we budgeted carefully and only spent the little money we had set aside for gifts.  When we arrived at my mom’s house, we saw that she had many, many gifts for us.  And, we felt bad, so December 24, we were out frantically shopping to buy her some more gifts.  We spent $150 more that day, and when you don’t have any spare money, that is a lot.

I still remember frantically trying to raise money when the credit card bill came in by selling books on half.com and trying to find some extra jobs.  It took us until March to pay off those presents we hadn’t planned for.
Needless to say – we never did that again.
If you’re looking to keep your holiday gift spending reasonable, there are several steps you can take, now, so you aren’t paying off the presents several months after Christmas is over.

1.  Tell your family your situation.  If money is tight for you this year, give your family and friends an early warning that the Christmas gifts may be a bit sparse this year.  Chances are, most people would rather you be honest (and stay out of debt) rather than spend money you don’t have.

2.  Raise money before you spend it.  Last year, Financial Samurai challenged himself to make money for the holidays before he spent it.  Several hours of work paid for every gift on his list.  He did it through lining up a few advertising deals for his blog, but there are many ways you can do this–get an extra job, donate plasma for a few weeks, sell stuff around the house that you don’t need on Craigslist or eBay.  My husband and I recently sold stuff we didn’t need, and in two weeks, we made $475.  That would be plenty for Christmas gifts.

3.  Make homemade gifts.  I am continually impressed by the homemade gifts that The Prudent Homemaker is making.  If you have to get gifts for children, you may be inspired by her gift a day series.  Pinterest is another great place to find homemade gift ideas as are frugal mom blogs.  You can make something like a scarf or make cookies or fudge or give soup kits or even make muffin tin crayons from old crayons you have lying around.

4.  Draw names.  Don’t feel the need to buy gifts for everyone.  If you have a close circle of friends, maybe this year you can draw names and only buy a gift for one person instead of all of your friends.

5.  Cash out rewards points.  If you get credit card reward points, consider cashing them out.  I cash out 5,000 reward points from my credit card every year to get my mom a $50 Red Lobster gift cards.  It is one of her favorite gifts because she goes there so frequently, and it doesn’t cost me any money.  If you are planning to do this, do so sooner rather than later to give time for shipping.

6.  Check out Craigslist and eBay.  You may feel a bit funny about buying presents on Craigslist and eBay, but you can find good stuff.  We had a brand new suitcase that had never been used that we didn’t need.  We sold it on Craigslist for $20 to a woman who was going to give it to her mother as a Christmas present since she would be traveling abroad in February.  By checking Craigslist, she easily saved herself $50 to $70 on a new, large suitcase.
The holidays can be a joyous time, but don’t make them any more stressful on yourself by feeling the need to overspend.  There are plenty of ways you can spread holiday cheer without regretting it for months after Christmas.
How about you all? What are your favorite strategies for keeping holiday spending in check?


Share your experiences by commenting below!

    ***Photo courtesy of http://www.flickr.com/photos/luminarie/2179728755/sizes/l/in/photostream/

    Comments

    1. John S @ Frugal Rules says:

      Good tips. I remember being in a very similar situation when we were first married. After a few years we started budgeting the amount we were able to spend. We end up pulling the cash out each month so when it comes time to shop we have the money we need and don't overspend.

    2. John–I used to love Christmas Clubs for just this reason. You were encouraged to save all year long. We all know the holidays are coming, but far too people plan for the expense.
      My recent post Flash Savings Update, Week #3

    3. Shannon-ReadyForZero says:

      I think communicating with your family about what you can afford is a great start. Typically people understand and that allows you to enjoy the holidays stress-free. I've also found great success on inexpensive, custom gifts from Etsy. These have even been some of my loved ones' favorite gifts!
      My recent post Dealing with Debt as a Couple

    4. Shannon–Etsy is a great idea!
      My recent post Flash Savings Update, Week #3

    5. Lou Rodriguez says:

      Great advice Jacob. I would add one more to that list; shop frugally. There is nothing wrong with going to Goodwill and making a smart second-hand purchase throughout the entire year, let alone Christmas. It has become a big part of our family shopping experience :)
      My recent post Top 10 Reasons Why Credit Is Not Your Friend

    6. Lou–good tip. I do sometimes shop at Goodwill and garage sales. The key is to know whether your gift receiver appreciates “recycled” gifts. Some people don't mind, and others get offended.
      My recent post Goals Update – November, 2012

    7. Whether you can afford it or not doesn't need to be the reason to cut back. Choose to opt out of all non-essential gift exchanges. Before you debate how to save in advance or shop for deals, start by reducing the gift count. We used to buy for all our adult siblings and their spouses, plus aunts and uncles. Now, we buy for the kids, make a donation on behalf of our elderly parents (who don't need or want anything), and for everyone else over 18 their name goes into a draw so everyone only buys for one other person. We've also set limits on the gift value ($15 for one side of the family, $25 for the other). Suddenly we went from ~15 gifts to 2 on each side. Huge money and stress reduction.

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