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Back when I wrote my post: Getting What You Want (Anti-Consumerism) I mentioned that my sister, Courtney, was my financial adviser and she's so money savvy that she can squeeze quarters out of pennies.
After that initial post, a few people wrote in asking if Courtney could guest blog -- offering some of her sage financial wisdom... well Herbies, you're in luck! Courtney's going to start guest blogging on Happy Herbivore and today is her first "financial lesson."
People tend to forget about saving money during the holidays. No matter which holiday it is you celebrate, does it really need to be a spending free for all? No, and nor should it be if you want to maintain a healthy financial situation year round. There are many ways to save money during the holidays -- here's how:
1. Determine significance, don't spend on the small stuff.
Determine what is significant for your family and spend on that, but scrimp on everything else.
For example, my family likes to take a family holiday picture on our stairwell each year, so we always made sure the stairwell was well decorated and festive.
Did we also need to decorate the hallway with lights that use electricity that we had to pay for? Not really; we could decorate it without the lights, or not decorate it all and just focus on the stairwell, because it's the stairwell, not the hallway, that's significant to us.
2. Cut back on twinkle lights, decorate without electricity.
Those small lights are a hidden (but big!) expense most of us don't realize. Multiply the watts times the number of hours it will be on, times your cost of electricity (this can be found on your bill) and be shocked at how much you can save by decorating without lights.
Also, beware that most electricity companies will charge a higher amount if you go over a certain limit. For example, my cost per kilowatts of electricity goes up significantly if I use over 1000 kilowatts in any given month. Lights make it easy to go over the limit and they cause a surge in my charges, too.
For example, to decorate a 6-foot tree, I'll need about 18 sets of 100 lights (this may sound like a lot, but it's really not). Assuming the lights are the same wattage, and I have the tree up from Dec 1 to Dec 30th, and run it for 5 hours a day, my electricity bill will go up at least $12. If I were to put lights on the stairwell and hallway, my bill will go up another $12. That's not even including hanging lights on the outside of the house or putting electric candles in my windows.
Buy a smaller tree, scrimp on indoor decorations, and reduce or eliminate outdoor lights to save. As much as I love seeing my house decorated at Christmas -- The $24 to $60 in savings is far more attractive to me. That's half my grocery bill!
3. Give the gift of love -- not retail pressure.
Gifts are usually the biggest money eaters. One way to save some money on gifts is to create a budget before you start shopping. What are you comfortable with spending total on all the gifts? Is it $50? Maybe $150? You need to know this before you go out, so you can determine how much to spend on each gift. Say you have a budget of $100 and three kids to buy for - two older kids and an infant.You probably only need to spend about $15-20 on the infant, whereas for the older kids you could spend about $40 each. If you know this before you walk into the store, you can avoid even thinking about that $65 toy.
Also think about the gifts you are buying and the necessity of them. Will your 5 year old nephew really enjoy the $50 fancy electronic toy or would he be just as happy with $20 worth of puzzles and games?
I have an 8yo and a 3yo nephew, and their favorite toys (the ones they play with the most), are the less expensive ones.
Another way to save some money on gifts is to add onto toys a child already has. For example, if you know that the child you are buying for already has a train set, you could buy extra tracks or other pieces rather than an entire new toy.
There is no right amount that you need or have to spend on another person for a gift -- retail stores, commercials and consumerism would like you to think differently, but don't be bullied and buy into their pressure.
More money spent does not equal more love.
4. Give practical gifts.
I've always been a fan of giving practical gifts. For example, on my 18th birthday, I received a lot of gifts. Some of which I remember, like the stuffed animal my boyfriend gave me or the candle holders my sister gave me, but the gift I still have (and use) today is a tool box with screwdrivers that my best friend gave me.
Knowing that I was going off to college soon after my birthday, this was the most practical gift I have ever gotten. I keep all my tools in it and have added to it over the years.
Do you have someone to shop for who recently moved out or just had a baby? Could there be a more practical gift that they may need and will always treasure? Usually these types of gifts are cheaper than the high tech gadgets and will likely be used more often.
5. Homemade Gifts.
I know some people frown upon this idea, but I can't think of anything better to receive -- a gift from the heart (not the wallet) that took your time, energy and two hands! Even kids like homemade gifts!
For example, my 6 year old niece wanted to learn how to cook, so I made a jar with flour, sugar, and a other ingredients to make cookies. All my niece had to do was mix it together and put it in the oven. Even her mother came back to me later saying she liked the gift too because it gave them an opportunity to spend some quality time together. I could have just as easily bought my niece a little play oven that came with pre-made mixes, but my homemade gift seemed more heartfelt (and it was cheaper).
(HH butting in here too-- when I was still in law school and could barely afford to live, I only gave out cookies on year, and they were all anyone could talk about! $20 spent on 15 gifts!)
Conclusion: Don't feel obligated to "keep up with the Jones'". No matter what religion you follow or what holidays you celebrate, spending and buying and gift giving is not what they are about. Winter holidays are about spending quality time with family and friends, and showing your appreciation and love for them. Thankfully, those beautiful gifts are all free.