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    • « Stagflation: A Rant | Home | Guard Yourself Against Rogue Debt Collectors from CNN.com »

    Budget for Gifts

    By Molly's Brother | March 3, 2008

    We are at a point in the year when it is nice to remind ourselves of our financial goals. Only a scant three months ago, we were all drowning in the holiday stress–the pressure to attend parties and to buy gift for loved ones. At this point in the calendar–in between holidays–remember to budget for gifts.

    A PERSONAL STORY

    I have often written about the strength of budgeting for gifts. I have done it myself for the past two years to some degree (in all honesty, i never budget enough!). Around Christmas, a friend was talking to his aunt about his about spending during the holidays. Her reply was, “I don’t get stressed. I have a holiday slush fund.”

    He discussed this with her for a couple more minutes and discovered that she puts 10% of her paycheck away for a holiday slush fund. Ten-percent of her earnings every two weeks. By the end of the year, she admitted, that she has more than enough money to buy gifts for her children and loved ones.

    MAKE GIFTS A LINE-ITEM ON YOUR BUDGET

    There is a lesson here. Maybe it is not feasible to put away 10% of your weekly earnings towards gifts. But by planning for gifts, a couple of things happen: 1. You end up spending less (and keep your credit card use to a minimum); 2. You end up being more intentional with your gift-giving.

    Figure out how much money you can budget each month on gift-giving. Valentine’s Day has passed. While Christmas is 9 months away, surely there are birthdays and anniversaries between now and then. Budgeting for gifts is one way to limit your spending.

    Topics: Personal Finance |

    2 Responses to “Budget for Gifts”

    1. Mark Says:
      March 3rd, 2008 at 6:49 pm

      This is a lesson that everyone should HEAR! Once I started budgeting for gifts, not only did I actually HAVE the money to spend…but, as you say, I ended up spending less (because I put more time into THINKING about the gift).

    2. Molly's Brother Says:
      March 17th, 2008 at 7:28 am

      Mark–

      Thanks for the comment. I definitely think it is something that can be helpful. I am glad it worked for you!

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