A great Christmas gift doesn’t have to cost a lot of money. It’s easy to get swept up in buying craze of the season and feel pressured to fork over a lot of money for video games, fancy candy, hefty gift baskets, or the latest techie gadget, but for just a few dollars and with a bit of time you can make meaningful gifts that are sure to bring smiles. Try one or more of these ten ideas to accomplish your holiday gift giving frugally and thoughtfully.
1. Baking mix in a jar. Grab your favorite cookie, muffin, or quick bread recipe and get to work. Layer the dry ingredients in a glass jar and seal tightly. Tie a copy of the recipe to the jar. Voila! Baking mix in a jar: pretty, tasty, and made especially for someone you care about.
2. Knitted and crocheted winter gear. With Jack Frost nipping at our noses this time of year, no one can resist donning a hat or scarf, especially one handmade just for them. If you’ve got the skill, put it to work on a pair of mittens for a loved one or scarves for all your friends.
3. Homemade candies. Boxes of little candies like buckeyes, truffles, and fudge are irresistible. Especially when you put your homemade treats into cute, festive boxes and tie them up with ribbons.
4. Framed poetry. If you’ve got good handwriting you could try your hand at a bit of calligraphy for this project – copy a favorite poem onto some high-quality paper, dry, and frame. If your handwriting isn’t the best, you can get a similar effect by choosing a favorite font and printing the poem out instead.
5. Bath salts, fizzes, and bubbles. Don’t drop a ton of cash on fancy bath soaps, scented bubble bath, and bath bombs shaped like Christmas trees when you can make your own. For just a few dollars you can pick up a few items like Epsom salts, essential oils, castile soap, and plastic containers that you can easily turn into many homemade bath gifts.
6. Canned goods. Did you can tomato sauce in the summer? Apple butter in the fall? How about make some pickles? If you can your own foods this gift couldn’t be easier. Head to the pantry and pick out a few jars of your best stuff. Add fun labels to the jars and wrap them up. Your foodie friends will thank you.
7. Coupon booklets. If you haven’t got any cash, you can always give the gift of time. With some paper and markers, you can easily print up your own coupons that can be redeemed for your services like washing the dishes, proofreading documents, making dinner, or any skill you possess.
8. Photos. Whether you frame them, put them in a scrapbook, or make a collage, you can’t go wrong with a sweet photo gift. Tell someone you love them, miss them, or simply that you have fun with them by reminding them of a special memory.
9. Jewelry. Hit up a craft store for a basic jewelry making book and supplies. If this is already your hobby, great! If it’s something you’ve always wanted to do, now might be the time to try it. Simple necklaces and bracelets are the easiest to make, but earrings aren’t much harder for the more ambitious crafter.
10. Candles. Whether its gel candles in a wine glass or hand dipped wax candles you fancy, these are surprisingly easy to make. Look for instructions online or buy a candle making kit. You can even make pretty candles out of the ends of candles you have around the house (just be careful about mixing scents).
Bonus tip: Wrap your gifts in homemade wrapping paper. The easiest homemade wrapping paper is old newspaper, but you can get much more creative than that if you like. Just grab some brown grocery bags or a cheap roll of packing paper and some markers, crayons, or paint and decorate to your heart’s delight!
Many people spend thirty to forty percent of their income on transportation. This can put an enormous strain on your budget. But there are many ways to cut your costs.
Walk or bike. Sneakers and bicycles are much less expensive than cars—and most people already have them. Spending a few minutes to calculate distances in your neighborhood and consider whether you really need to drive to the grocery store, pharmacy, post office, bank, etc. can save you a bundle on gas because those little trips quickly add up. If you have a short commute, you can save a lot on gas and parking costs by walking or biking to work. You can also consider cutting out your trip to the gym or other exercise time in exchange for your new, healthy commute.
Public transportation. If you live in the city, it might make sense to sell your car and solely use public transportation like the bus and subway. But even if you keep your car, it is likely cheaper to commute to work with public transport. Some companies even offer incentives for employees who use the bus system or subway.
Carpool. If you have to use your car, consider ride sharing, especially for your daily commute. Drive into work with a co-worker or two and alternate which one of you drives. It will save wear and tear on your car and decrease gas costs for all involved.
Buy a used car. Cars lose value quickly starting from the moment you drive a new vehicle off the lot. But a slightly used car that is five years old or less—you’ll save a lot of money but still have a nearly new, reliable car to drive. You might even be able to invest in a type of car that you couldn’t afford new.
Shop gas prices. While it doesn’t make sense to drive fifteen miles out of your way to save ten cents a gallon on gas, there are smart ways to save money in this department. Compare prices along routes you usually drive (your commute, trips to the grocery store, your kids school etc) and within a couple miles of your house. You can save money on gas without have to spend gas to do it. Also, keep your eye out for specials, coupons, and rewards cards for fuel.
This is part two of a four part series on holiday budgeting. Part 1, Eight Ways to Save Money for Christmas for tips on finding cash to fill out your budget.
The key to successful holiday spending debt-free is knowing how much you have to spend and carefully allocating those dollars to the things you most want to do or give. Use these four steps to plan an accurate, affordable, and pleasing holiday budget.
Step 1: Determine what you can afford to spend.
Look at how much you’ve saved for Christmas this year, the paychecks you will receive between now and 12/25, and the other bills you need to take care of. With all of this information in front of you, choose a number that is affordable and joyful. Double check to make sure that your budget balances and then move on to step two.
Step 2: Make a list of all the things you want to spend money on during the holiday season.
Try to think of all the things you might spend money on. Here is a list of common Christmas spending categories to get you started:
- Gifts and Cards
- Food (special meals at home as well as dining out)
- Decorations
- Charitable Giving
- Entertainment
Step 3: Divide your holiday budget up between those items.
For tips on how to divide your budget, let’s look at two categories: gifts and entertainment.
Gift Giving:
Make a list of all the people you want to buy gifts for and how many gifts you plan to give them. Then put a monetary amount next to each name. Add them all up. If you match or are under your total gift budget, great. Go shopping and take your list with you to remind yourself of your budget. Come in too high? Go back and figure out who you can spend a little less on. Remember, how much you spend doesn’t equate to how much you love someone.
Entertainment:
This category can encompass just about everything else you spend money on in December from food for a holiday party to going out to the movies with the kids while they’re off from school. Take your time and be realistic. You don’t want to under budget on this section. Give yourself enough wiggle room to do the things you really want to do. But also remember that some of the most fun things to do are free or cheap: play board games, bake cookies, sing Christmas carols, etc.
Step 4: Track your spending during the holidays and regularly check it against your budget. Adjust as necessary.
Use a tool like BudgetSimple to track your anticipated spending against your actual spending. Seeing the real numbers will help keep you on track and help you get back on budget if you splurge on something unexpected (which we all do).
Open your closet door. What do you see? A favorite dress, some nice shirts, your shoes, a few random items you shoved in there to get out of the way, and a few items that don’t really fit or you don’t really like but they’ve just been hanging there so long you’re used to them? That’s what my closet looks like anyway – or it did until I cleaned it out for cash.
If you have clothing that is still in good condition, but you just don’t wear, it’s the perfect candidate to take to a thrift store or clothing exchange. It’s easy enough to do: just find a store near you, pack up a box or bag of clothes, and take them to the store.
The store employees will go through what you brought and decide what they’ll take based on the needs of the shop. They’ll then make you an offer on what they’re interested in. Anything they don’t want is your responsibility once again as is anything they do want but you won’t give up for what they’re willing to pay.
You won’t get a lot of money for your old clothes, but it’s still a great way to earn a little extra pocket change from items that would otherwise be collecting dust and taking up space.
In addition to clothes, you can usually sell jewelry, shoes, purses, and other accessories.
Some thrift stores also offer a better value if you choose store credit instead of cash. This can be a great way to clean out your closet and refresh your wardrobe. Take a few things in, bring a couple things home, and spend little or no cash.
If you have friends of a similar size, you could also have a clothes and jewelry trading party. Ask everyone to clean out their closet and bring over their best unwanted threads, open a bottle of wine or two, and dig through the piles of clothes to find what you like. If not all the items find a home, you can still sell them to a thrift store or donate them after the party.
The best way to avoid those hefty January credit card bills, give the Christmas gifts you really want to give, and enjoy some of the fun (but sometimes costly) activities that happen in December, is to save for the Christmas season early. With a little discipline, by December, you can have a slush fund to draw from for holiday expenses.
But how do you do it? Try these eight tips.
1. Make a budget. Estimate how much you think you’ll spend in December. You can (and should) refine your budget once you know how much you’ve saved But think about your holiday budget now as well as your income and set yourself a reasonable savings goal. If you have a specific goal in mind, you’re more likely to work toward achieving it and implementing other saving strategies.
2. Set aside a percentage of each paycheck. Create a Christmas fund and pay it like you would a bill. When your paycheck comes in set aside a percentage of the money (whatever number is joyful and doable for you) for Christmas. The sooner you do this, the more money you can earmark for December. But even if you only have a few paychecks between now and 12/25, you can still save a good amount of money.
3. Work a little overtime. If you have a job where you can put in a few extra hours of work, do it. You’d be surprised how much you can earn by picking up an extra shift each week or getting to work half an hour early a few times a week. Just make sure to put all that overtime cash into your Christmas fund!
4. Pick up a second job. Lots of places need holiday help, so why not offer to be that help? You can earn a few extra bucks and maybe you’ll be lucky enough to work at a store where you can snag an employee discount.
5. Cut your discretionary spending. Do you usually stop for a latte on your way to work every morning? Consider bringing your coffee from home and putting the cash you would have spent on a latte into your holiday savings. Take a look at where your money goes and consider what items you could do without in November so that you can splurge on gifts and entertainment in December.
6. Earn and redeem reward points. Reward programs are everywhere these days. Most major retail stores have them. If you have a credit card or checking account, you’re probably already signed up for a bank reward program. Additionally, independent rewards programs like Swagbucks and MyPoints let you earn points by doing things you already do and then you can convert those points to gift cards or rewards. The key to these programs is paying attention. You might think your bank rewards program has nothing to offer you because you already have a DVD player or the other household items you can earn, but most programs now offer gift cards or will even deposit a money directly into your checking account when you reach a certain number of points.
7. Clip coupons. Start combing ads now for holiday items. This is especially useful for keeping your grocery costs down in December. Coupons for items like butter, chocolate chips, spices, and sugar appear this time of year. For every coupon you clip, that’s fifty cents or a dollar (or more) you didn’t have to save.
8. Sell stuff. Do a little autumn cleaning. Go through your closets, shelves, and cupboards and take your items to consignment shops. You’ll clear out a little space in your house and earn a little mad money for the holidays.
With credit cards accepted almost everywhere these days, it’s easy to just pay with plastic and never exchange bills and coins. Just swipe, sign, and go. You don’t even have to think about it.
But that’s the problem.
With the ease of swipe and go transactions, it’s easy to spend a lot of money without giving it a second thought. Imagine: Four dollars for a latte, fifteen for lunch, seven for an after work martini, and what the heck, another seven for a martini since you’re not driving. Add it up: thirty-three dollars just disappeared on just an average workday and your wallet isn’t any lighter than it was this morning.
What if you’d had to pay for each purchase with cash? And what if you knew that the cash in your wallet was your entire allowance for discretionary/fun/impulse purchases for the week?
Maybe you’d spend two dollars and get a regular coffee with cream and sugar or (even better for your budget) bring coffee from home. Maybe you’d pack your lunch more days during the week. Maybe you’d skip the second martini or keep a sharper eye for happy hour deals.
Why does this work? Because you have to think about it. The act of taking cash out of your wallet and watching the number of bills in your wallet dwindle forces you to think about the value of each dollar. How do you feel when you pass that ten-dollar bill across the bar and put three dollars back in your wallet (or two if you’re nice and tip the bartender)?
Plus, when the cash is gone, it’s gone. If you’re in line on Friday morning to get your latte and you only have three dollars in your wallet but the latte costs four, what do you do? It’s a make or break moment for your budget. You can grab the two-dollar coffee, skip the coffee altogether, or pull out your credit/debit card and pay for the latte. But if you pick the credit/debit card option, you’ll know as you sign your name that you just busted your budget for the week. Was the latte worth it?
It might not be easy to adhere to at first. But cash doesn’t lie. It’s in your wallet or it isn’t. You can’t overdraw from something that isn’t there. Try it for a week: Go to the ATM, take out your allotted amount for fun purchases, and see how it goes. Do you feel differently about your spending?
Personal connection: You can do this in more categories than discretionary spending. You could live your whole life with cash. But I’ve found a cash-only fun budget (eating at restaurants, going to the movies, impulsive latte buying etc.) to be easy to maintain because I can still use my debit card for groceries and large purchases (so I can still earn the reward points with my debit card program) and write a check for my rent, but I can’t mindlessly pay for an ice cream cone – I have to decide if I really want it and check to see if I have enough cash.
Here’s a real quick and simple budget tip: Don’t Buy Books. Ever.
Somewhere I’m sure my 5th grade teacher is crying at this advice. Books are amazing you say! Let me be clear, I’m not advocating you stop reading, only that there is no reason to own a book in any form, ever.
Most people I know, readers or not, buy books new. Either on a whim at Barnes and Noble, or every time they want to read something they buy it from Amazon. There are three reasons I typically hear from people when I ask them why they bought a book:
- It’s a new release!
- I often reread books
- I buy books in case someone wants to borrow one
- It takes me a while to read a book
- I’m building my library (you know the one we’ll all have one day with a fireplace and oak desk?)
I’ll address each of these points and why the whole concept is terrible for your budget. First, I think most people don’t realize how incredibly convenient your library is. You’ve probably been in there a few times, saw some old dusty books (not the latest fiction), and maybe even been hit with some fines for being late. For whatever reason, people are not big fans of the library. But the library is actually pretty awesome. First, it’s free!!!! Ok, well you get what you pay for right? In this case, no!
Point 1 – New Releases. Every major metro area has a library system that’s complete enough that you can go to their website, put a book on hold, request it be shipped to your local library. This means, if you can wait even just one week, your new release will magically show up at your local library free of charge! Sometimes there is a little longer wait for new releases, but luckily there is surely something else you can read in the meantime from their other 1 million books.
Point 2 – Rereading. That’s great that you are rereading a book, but once again, it’s a minor inconvenience to go to the library to get it again! Saving tons of money (and becoming rich) is essentially not paying others for small inconveniences.
Point 3 – Buying on the intention of lending – This is a great noble cause. How often do you actually end up lending these books out though? Pretty often? Well, even then, your recommendation is probably just as useful as physically having the actual book. Let that person go to the library or spend the money to buy the book, don’t take that on yourself (if they buy it, you can re-read it too!)
Point 4 – It takes me too long to read a book. Everyone has different reading speeds, but most libraries let you renew for at least 2 months. If you’re not reading a book in two months, you probably don’t like the book enough, and that’s all the more reason you should be happy you didn’t buy it.
Point 5 – Building a Library. Honestly, I think this is the secret reason most people buy books. TV and Movies have been showing us these full complete libraries with a roaring fire for years. This all came from the fact that the Internet and Library system didn’t use to exist in the 19th century. Rich people literally had to own their own libraries, and so they did. This is completely unnecessary these days, and frankly modern books just don’t look as pretty when they fill up the room as old books did. This also REALLY increases moving costs and pain, and uses up storage. If one day you actually do have this dream library and it just needs books to decorate it, you can probably fill the entire thing from book giveaways and yard sales for under $200 (about the cost of 10 new books).
If you learn the joy of reading for entertainment, and the convenience of using a library, you’ll save hundreds and thousands of dollars a year on entertainment. Most libraries also have magazines and movies, if you want to save on a few more entertainment expenses while you’re there.
People keep referencing the “kitchen table” budgeting that our country needs to do to stop deficit spending. In that vein, I decided to see what the Federal budget that was just passed would look like in BudgetSimple:
As you can see, the Government is doing pretty decent in terms of income (all numbers in BILLIONS). They are making almost a trillion dollars in income by taxing the population. They get another 200 billion from taxing corporations. The remaining 1 trillion comes mostly from the money you (and your employer) pay in social security taxes, medicare taxes, etc… and some bits come from customs duties.
However, as great as having an income of 2.2 trillion dollars sounds, BudgetSimple let’s us know we are not spending our money in a responsible way exactly
You can see, the US Government needs to cut spending by 1.6 TRILLION dollars to make it’s budget balanced. Think about that next time you are over budget!
Despite all the talk about entitlement programs causing our debt, you can see the biggest line item is defense spending (Security) at $908,000,000,000. The good news is the TARP program that bailed out banks is actually making us $28 billion this year!
Ooops.
Yesterday the new iPhone companion app for BudgetSimple became available on the AppStore. This fairly basic first version will allow you to enter your income and expenses on the go. We’ve already started on version 2.0 and also have an Android app in development. Please let us know what features you would like to see the most!
We launched the BudgetSimple forums today. If you need assistance with BudgetSimple, have questions or want to share your own budgeting stories, head on over and join the conversation!
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