By Sylvia Lim, CGA, CFP
John and Jeanette Clarke with their two children spent almost $800 last year on Christmas gifts. By the time the cost of all the festive foods and drinks was included, the price tag was even higher. To make things worst, when January rolled around with those ghastly credit card bills with huge balances, John and Jeanette’s financial hangover was in full bloom. They are usually good at paying their bills but it still took them 3 months to pay off the Christmas balance on their credit cards.
The pressure to keep up with the Joneses is an added stress this time of the year. Your kids want the latest gizmos, gadgets and trinkets with huge price tags that go with the must-haves of the season. When you think they just can’t do anything more with those toaster-broil-convection ovens, who would have thought they’d come up with a new and improved version that can also defrost and make brick oven pizzas. All with just a one button control!
So what can one do to curb those urges to spend this time of the year? The answer is to make a money pact with the family now to not spend frivolously for this holiday season. We all have the ability to be resourceful and creative when it’s crunch time and this season for many families, it’s down to basics to stretch that mighty dollar. Doing things yourself (DIY) for Christmas is not only money savvy, but it can also be fun and rewarding.
Here are some ideas for you and your family to consider.
- Set a budget for gifts. It can be $15 per child and $25 per teenager. For the adults, have everyone in the extended family agree on buying only for one person in the clan. Set a limit on how much to spend and have a name draw. Buy only for the person whose name is drawn.
- Spend only money you have set aside for the holidays. Put your credit cards on ice (literally in the freezer) and pay with cash to avoid impulse buying. When shopping online, be vigilant to stay on budget and do not overspend.
- Make homemade gifts. Make your own jams, marmalades, and chutneys. How about bath salts and soaps, or bottle your own dessert wines? Engage your kids and spouse’s help and make it a family affair. Delegate the tasks so everyone is involved. For example, one can print personalized bottle or bag labels while another wrap the baskets and/or bags of goodies. These gifts will be well remembered, inexpensive and everyone involved will get a great sense of personal satisfaction and accomplishment.
- A gift of time for your loved ones. Consider making your own gift certificates for babysitting time, elder-sitting session, spring cleaning and weekend date with mom.
- Be creative with gift wraps and tags. Do not buy wrapping paper. Instead use colourful comic papers, tea towels and even paper bags as wraps. Add and decorate packages with ribbons, popcorn strings and tree ornaments. Last year’s Christmas cards can be turned into unique gift tags. Engage your kids for this cutout task.
- Pot luck and BYOB is the way to go for Christmas dinners with large extended families. The adults attending can each contribute an appetizer, side dish, or dessert for the dinner. It makes for less work and more fun for the host/ess, who will have more time to enjoy the dinner and company.
- Be charitable and make a donation.
- Make an early RRSP contribution with the money you saved this Christmas and save even more on taxes.
The Clarkes just made a commitment to start their Christmas money plan now. They’re looking forward to a stress free, fun and family-oriented holiday season together. John & Jeanette also know that come January, they will have more money for their RRSP instead of a huge financial hangover.
Christmas is a time for family and spirituality. Make this season one that focuses on your loved ones instead of commodities. Avoid the malls and their frenzied, stressed-out shoppers. Do not give into the temptation of easy online shopping. Once you’ve mastered the art of DIY, you