Thursday, December 20, 2012

How to Save Money on Gift Giving

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How to Save Money on Gift Giving
I’m a sucker for the holidays. Heading into the season last year, I was more determined than ever to make it count: It would be my first Christmas in our new home, and my first as a new mom. I could have rationalized why this was the year I should make a splash, despite all the spending restraint I had displayed during the rest of the year. Luckily, I remembered a simple mantra: The happiest people don’t have the best of everything; they make the best of everything.

Before I got financially responsible along with my circle of close friends (we eventually became the Smart Cookies), I would spend about $1,500 for holiday gifts—money I didn’t have. But last November, my husband and I set a gift budget of $250. Then we drew names with our family and friends, rather than having to buy for everyone—a stark contrast from past years spent frantically buying for a laundry list of people.
Use credit card points

In my family, I drew my dad’s name, and enjoyed deliberating over ideas. He’s a keen cook, and I’m proud to say I got him an incredible Japanese knife that he still talks about and uses almost daily. I got this for him through rewards points attached to my American Express charge card. Yes, there are downfalls to reward-heavy credit cards; I believe if you carry a balance on your credit card, the benefit of “earning points” does not compensate for the interest you’ll pay. However, it’s estimated more than two million Canadians have access to a card that offers a redeemable reward. So why not use them—wisely? My charge card has one of the best rewards programs I’ve seen. By charging most of my household expenses (gas, groceries, etc.) to it and paying it off monthly, I have some $500 worth of gifts I can redeem by the end of the year. This was how I was able to get my husband an iPad for free.

As for my circle of friends, I drew the name of one who loves unique jewellery. I found her a beautiful, custom-made necklace for $35 on etsy.com. The rest of my shopping was for my baby daughter, though I didn’t spend much on her—a cardboard box still keeps her entertained—and a few small items for colleagues and hosts.
Use online budgeting tools

When it comes to budgeting for the season, don’t bother creating spreadsheets you’ll never use again. But you should create a budget. Try an online tool; my husband and I monitor our spending through a free one at mint.com. It can aggregate all the cards and accounts you use, and categorize where your money is going.

Mint can also text and email you when your spending reaches its maximum in various categories. We were impressed at how helpful these were in keeping us to our $250 gift budget.
Create homemade gifts

This is a social season, and showing up empty-handed to a party just doesn’t feel right. My new go-to gift is a $9 bottle of Hardy’s Gew├╝rztraminer-Riesling, which I personalize by covering the label and writing on it a festive message—for example, “’Tis the Season for Riesling—Love, the Reiachs” (Reiach is my married name). I accompany this with some framed homemade art. I find images of vintage bicycles, Ferris wheels or birds online and print them onto a heavy paper stock.

I ended up spending just $230 on gifts, not $250. I felt less stressed, and more empowered and delighted by the memories we made than in years past. Here’s wishing you a memorable holiday season that is free of a spending hangover.
 
 
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