Are you saving for Christmas presents? It’s only six paychecks away!
Just few days ago, I was out for a walk at the mall. Yes, I’m one of those people who sometimes pointlessly walks around the mall for no good reason - I’m not there to buy anything, I was basically trying to kill an hour or two. I do like to check out certain stores from time to time without actually buying anything - Chapters for books, Apple store for iMacs, electronic stores for all the gizmos, and couple others. You never know when you discover a good book - and new iMac’s are shiny and pretty!
So, when I was walking through Sears, I couldn’t help but notice an open door into their warehouse - and what I’ve seen shocked me a bit. Their warehouse already had Christmas stuff piled up! After initial shock, I exchanged a few words with a clerk (after he made sure I’m fine since I was a bit pale), and he mentioned that Christmas stuff starts arriving just about now.
And that made me think about how we used to buy presents…
Buying presents at our house 3 years ago:
Three years ago, we did what most people do around Christmas - get stressed out about buying presents, spending too much money, and then paying off our credit cards well into February. My wife loves giving presents and is absolutely fantastic at finding something special for everybody. I on the the other hand wouldn’t voluntarily step into a mall around Christmas even if they were giving out free iMacs.
Typically, we would wait till December to even start thinking of presents, and that would translate into an obvious money problem - we wouldn’t have much left after all the expenses. Because of that, we’d be forced to put everything on credit cards which would guarantee no sleep for me until they are paid off - and it would cost us since it would be impossible to pay them off in one month. All of this would turn a pleasant process of buying presents into nerve wrecking mall trips and money-related bickering between me and my wife. Absolutely appalling, if you ask me.
Not to sound cliche, but there has to be a better way! And we found it.
Buying presents at our house NOW:
Step one: Make a rough list of all occasions throughout the year.
That includes birthday presents, Christmas presents, occasional visit presents, etc. for ourselves, my mom, my brother’s family, my wife’s family and a few of our friends.
Step two: Get a rough estimate on how much money this represents in total.
Some are small inexpensive presents, while birthday presents are usually a bit more expensive. Keep in mind any weddings coming up or special occasions. Leave some room for error too - add 20%.
(did you know an average American spends $646 on holiday gifts? Seems high to me!)
Step three: Open up a separate savings account linked to our debit card.
Every month transfer 1/12 of the figure from step 2 into this account automatically. This year it came to $130. Your figure might lower or higher - depends on number of people in your family and your standards which are always individual.
Step four: Enjoy stress-free saving for Christmas presents (and other occasions).
Buy presents with money in your savings account when the need arises.
Step five: Re-evaluate every year.
Sometimes the monthly transfer number needs to go up or down. I believe we started with $100, but brought it up to $130 last year.
What a big difference a little planning makes!
Now we’re never stressed out about buying presents because we always have access to money specifically saved for presents. Now my wife can freely buy presents when she sees a good one for somebody. It actually saves us money now since now she doesn’t wait till Christmas season to buy them - and can buy something that is on special at fraction of a price.
At the same time, the financial nerd in me is finally at peace - no longer I’m stressing out about spending large amount of money in short period of time and dealing with debt afterwards. No longer we’re paying interest on credit card purchases. No longer we’re bickering about gift buying during what supposed to be a family time. Life is good!
I strongly recommend this approach of saving for Christmas presents
Not only it will bring you fiscal peace around Christmas, but it will make your relationship stronger by avoiding unnecessary stress. Number one reason why couples fight in North America is fighting over money. One less reason to fight equals stronger marriage.
Think about it - if all the stores are preparing for Christmas well in advance, shouldn’t you preparing too? Good planning always makes life easier for everybody.
Now that Christmas is only six paychecks away, how about a little test drive? Instead of waiting till Christmas to worry about buying presents, how about saving for Christmas presents ahead of time this year? Figure out what you will be spending, divide this number by six, and put the money away - I promise you’ll feel more relaxed when the time comes! You can always go back to unstructured chaos of spending if you don’t like it!
- But what about buying presents for each other?
This is one of the drawbacks of this system - your spouse would be able to see what you buy him/her as a gift. We solved it rather simply - we basically tell each other when we’re buying presents for each other and promise not to look at online statements for a bit. Problem solved!