Every Christmas that I’ve been out on my own (every year since 2001), Christmas has been a struggle for me financially. Not necessarily because of the decorating, which I don’t do much of, or the holiday parties, which I’ve never really been invited to, but because I love giving gifts.
I love the creativity involved in making or finding the perfect thing for each of the people I care about and seeing the delight on their face (or, more and more, in their voice) as they open it. Getting gifts is nice too, of course; I’ve got a materialistic streak like anyone else, but the biggest thrill for me is giving.
Over the years, the circle of people I care about has expanded. Immediate family and best friends grew when I entered high school. College added more good friends to the mix, and marriage added a whole new layer to “immediate family.” When we moved out to Colorado, my “family” grew because we now live so much closer to my aunts, uncles, cousins and grandmothers.
Am I obligated to give each of these people gifts for Christmas? No, of course not. I know that they would understand fully if I didn’t (or couldn’t).
Do I want to give each of them a gift for Christmas? Yes, yes I do.
You can see how Christmas could be challenging financially. Even if I only spend $10 on each person, that adds up to more than $300, not including shipping.
One of the key tenets of “frugal living” is to spend wisely on the things you care about, and spend as minimally as possible on the things that don’t matter to you.
Christmas gift giving matters to me, so I spend on it, every year.
Christmas Savings? What a Novel Concept!
A few years ago, when I started to dive into the wide world of personal finance advice, I came across the concept of setting a budget for Christmas spending the year before, and saving a little bit toward that goal each month.
For many of you, this is going to seem like common sense, but it was something I had never considered.
I knew that saving up for bigger purchases was a good idea (like the $100 pair of rollerblades I bought myself when I was 12) and I knew that saving was a good idea (“Save 10% of everything you earn” my mom always told me). But somehow the idea of saving up for Christmas had never really sunk in.
If at first you don’t succeed…
The first year I tried to save for Christmas, I ended up with $50 in my savings account by December 1st, and ended up spending every extra penny we made during November and December to fulfill my idea of what Christmas giving should be.
The second year, I saved almost $200 toward Christmas, which was better but still wasn’t enough and we ended up not being able to buy gifts for anyone but the people we lived closest to (my in-laws) and my sisters.
Last year, the third year, we spent all of our savings moving across the country and ended up putting half of our Christmas spending on a credit card. Bad, bad plan, as it took us two months to pay it off again, which was two months more of paying off credit card debt in general.
After dealing with that credit hangover, I vowed never again to do any Christmas spending on a credit card. The “unlimited” nature of credit and my desire to give leads to very bad things (read: more credit card debt).
This year, we finally did it
This year, I set up an automatic savings plan of $30 a month into “Miscellaneous Savings.” Any windfall we received we divided thusly: 10% for each of our “Fun Money” accounts, 40% to debt repayment, and 50% to Miscellaneous Savings.
Over the course of the year, we’ve used that Miscellaneous savings for Birthday presents, a nice dinner out every other month or so, and to help with moving into our new condo. I’ve done my best to replenish it as soon as I can, considering any spending out of it a “loan” to myself.
Therefore, come December 1, 2011, we had almost $700 saved in that account. I made a list of all of the people to whom I wanted to give gifts, and how much we could spend on each of them based on our savings and the travel we were going to do.
And now, it’s December 14th, and all of my Christmas shopping is done. I have two hand-made presents to finish, and everything I’ve ordered should arrive today or tomorrow. Just in time for me to wrap it all and ship it off on Saturday. (I do not relish the thought of that line, but that’s what Angry Birds is for, right?)
The best part? We didn’t spend a dime on a credit card.
I feel like I’ve crossed a threshold in adulthood, or savings prowess, or something. I feel savvy and accomplished that I made a plan, set a goal, and stuck to it.
The Spending Hangover (Buyer’s Remorse?)
Despite the fact that we budgeted and saved for Christmas spending, and then spent only what we had saved on Christmas presents, I still feel a sense of loss when I look at my empty savings account. Because the truth is, no matter how much I like giving, I really don’t like spending money. I’d much rather it hang out in my accounting, offering me a sense of pride and security.
I didn’t think I would have a spending hangover having avoided credit card debt. And the remorse I feel this year is not as bad as it was last year, when I realized what sort of bills we were facing in January and February, but it’s still there.
The biggest reason it our empty savings account makes me sad is that we sat down the other day to talk about what travel we might be doing in 2012, and the first trip is in mid-May, for a wedding and my brother-in-law’s graduation celebration. Tickets are (at the moment) around $300 each, plus the cost of gifts, and possibly renting a car.
True, there are five months between now and May, which could be plenty of time to save, except that plane tickets will have to be bought in advance, and I’m starting back to school in January. I’m not saying that it’s not possible to save enough to take our May trip, just that it makes me a little sad that we’re now starting from scratch, savings-wise.
What’s the Solution?
I’m not sure, to be honest. I thought if I saved money for the purpose of buying Christmas presents, I’d be okay with it when I spent that money. And I am; I’m glad we bought what we did for the people we care about. But there’s still this nagging sense of loss.
I think the best way to counter act that next year is to save a little bit more, and leave some of it in the account at the end of the Holiday Season. I felt fine with my Christmas spending until I transferred the last dollar out of the savings account.
So that’s my plan.
I don’t know how much we’ll be able to save yet. We still have to sit down and really talk about our goals (financial and otherwise), and we don’t usually do that until after the first of the year. So we’ll see, but I now have a plan to combat this sense of loss and remorse after Christmas. I’ll let you know how it works out.
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