Giving Gifts without going Broke
By Keith Bunn Jr.
April 22, 2012
One of the ways people over spend is on gift giving. Christmas, birthdays, weddings, etc… any occasion where you have to give a gift or multiple gifts can be big budget busters. There is nothing wrong with giving a gift; in fact, giving is part of a healthy financial plan, unless you give more than you should.
A lot of times, people give more than they should just because they have big hearts and love to give to others, while other people give more than they should as a way to show others that they are doing well financially even when they’re not. In either case, over spending on gifts is a quick way to the poor house.
Julie and I are both big givers. We love the feeling we get when the person we gave a gift to, opens it up and we see the joy on their face. We also love the feeling we get when we randomly give a gift of money at a store or at a restaurant in the form of a big tip. But we have realized by being big givers, it has landed us many times not having the funds for the things that we need.
Knowing this about ourselves, we devised a plan so that we can keep giving without going broke. Julie and I sat down one day and thought up every occasion where we would have to give a gift of any kind. We broke them up in categories, placed names under each category and then put a dollar amount next to that name that we would spend either in a gift or give in cash. See the example below…
Once you figured out your categories and amounts, start saving for those amounts. Many banks and/or credit unions have special savings accounts that can help you with your saving and planning. The best time to do that is at the beginning of the year. Tally up all the dollar amounts and divide them by 12 months. Whatever number you get, that’s what you need to save each month for those categories. Now be realistic. Going overboard with your plan isn’t good either and you also have to think about these categories. You’re not going to have a wedding every month but you could have multiple birthdays in one month or a birthday next to a holiday like Christmas. Everybody’s plan is unique to them and once you have a plan in place and you follow it, you will be able to give without going broke.
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