Monday, December 17, 2007

How I Dealt with the Costs of Christmas

Christmas can be an expensive time of year. For me, I want to buy those close to me nice gifts. I like to show my love by buying them something that is really great and this usually means spending quite a bit of money. Unfortunately, I am not rich. I have quite a few family members that I will buy presents for this year. This list includes my mother, stepfather, father, stepmother, brother, sister, grandma and fiance. On my fiance's side we also have to get gifts for her two parents, her sister and future brother in law. This can get pretty expensive but I feel this year we did a good job keeping our costs low and still getting gifts that everyone will enjoy.

The first thing I did in preparation for the Christmas money spending season is that I opened up a money market account to specifically save for the holiday. I opened this account back in October with $50 and set up an automatic deposit of $25 every two weeks. Sometime in November I put another hundred in the account so that now I ended up with $275 saved up to spend on Christmas. This is an idea I would like to carry forward in the future with my fiance. Since we have the account set up, we will continue to put in $25 or so every couple weeks automatically throughout the year. This will help us cover all gift giving through the year and the big spending time of Christmas at year end. If there is anything left over we can spend that on ourselves or use for a different goal.

The next thing I did was set a budget. There are 8 people that I personally needed to get gifts for this year. This includes my side of the family and my fiance. I let her take care of her own side of the family but we used the same budget. We decided to spend a maximum of $50 per person. For my grandma we decided to spend $20 and for each other we decided on around $75.

Next came the spending. This year I asked everyone for ideas of what they wanted or needed for Christmas. This way I knew I wasn't wasting money on a gift that will just go in the closet and be forgotten about. Once I had a list I was easily able to find gifts for each person that were in my budget. I am very pleased with what I got everyone this year and don't feel like it is breaking my budget. My total Christmas budget amounted to $395 and I actually spent about $320. Because I prepared for these expenditures, I was able to use cash and take on no new debt. This is a big difference from a year ago when I racked up over $500 on the credit cards and really didn't have gifts that were any better then this year. I just had a debt cloud hanging over my head that was a big hassle to pay off.

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