by Jenna Pope

Created on: January 28, 2010

It’s important to start budgeting for gift giving so that you aren’t hit with the expense all at once.  But how do you do that? 

How We Do It:

I’m the one who budgets the gift giving in our family.  My husband would be just as happy to give everyone in the family a nice little card for Christmas and let that be it.  But, I came from a family where Christmas, Birthday, Valentine’s Day, and Anniversary presents were very important.  Missing one of these occasions constituted sacrilege.

After we were married, the gift-giving issue would emerge whenever there was an upcoming birthday or holiday that involved the giving of a present.  After awhile, we developed a gift-savings account and came to a compromise on how much money we would put away for gifts.

The Every Other Friday Deduction:

On payday, every other week, I deposit $25.00 of my salary into a savings account at a different bank than the one where we have our other accounts.  This makes it a little more difficult for either of us to access the money.  I do the deposit religiously.  Then, when there is a birthday, I look for a gift in the $30.00 range.  For Christmas, I spend $50.00 per person in our immediate family and $15.00 per person in our extended family, nieces, nephews, etc. 

Take Advantage of Extra Paydays a Couple of Times a Year:

For someone whose payday is every other week, there are always a couple of extra paydays a year, where you get paid three times in a month, a couple of times a year.  Some people, who use that extra payday to catch up on extra bills, like yearly car insurance, etc., can use a portion of that check to replenish their gift-fund savings a couple of times a year - painlessly.

The Christmas Club / Holiday Savings Account:

Banks also offer a Christmas Club or Holiday Savings Account, where a certain amount is deducted from your paycheck each payday.   Then in November, the money becomes available to you.  Sometimes these accounts pay a slightly higher rate of interest.  The advantage to this type of account is that you can’t take the money out until the following November – without penalty.  This motivates you to keep the savings intact. 

No Money for Presents:

My mother-in-law had a very workable gift-savings solution.  Her husband was in charge of the family finances, and like my husband and I, she and her husband bantered about the same gift-giving issue.  My father-in-law was a very strict budgeter and found no way to establish a gift savings.  My mother-in-law didn’t work, and it was hard enough just making ends meet on one salary, let alone buy everyone gifts.

So Grandma got a job in retail that started in November and ended in January.  This was how she afforded the presents that she gave us, her other children and her friends.  This solution worked perfectly for them.

No matter what your situation, the most important aspect of spending money on gifts is to communicate about it and consider all of your options.  There’s usually a way to be able to afford gifts to family and friends, if you plan ahead and start saving early.  Soon you’ll have worked out the perfect plan for you.

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