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Your Holiday Present
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The Screaming Capitalist
Calgary-based Financial Advisor, Kevin Cork, provides basic financial planning information for Canadians combined with optimism and scepticism that he calls "scoptimism."

By Kevin Cork  | Wednesday, December 07, 2005

Financial survival tips for Christmas

Commercialism runs rampant this time of year and while this type of consumerism is good for the economy and makes all those malls seem like THE place to be it also usually means that January and February –when the bills start arriving-can be pretty tight financially. This is made worse by the fact that some many people wait until then to do their RRSP contribution as well.

One of the best solutuions for not spending too much at Christmas is to create a list of gift, budget for it and then go back to the list and CHECK IT TWICE! Then, take out, in cash, the money you need for these gifts, leave the credit card and debit card at home-I’m not kidding- and go buy what you need. Any desire to spend on an extra gift gets effectively squelched when you face the prospect of getting back in the car, leaving the parking lot, fighting traffic home, getting the credit card and coming all the way back.

And, do NOT shop for everything on the 23 rd or the 24 th. You will be harassed, rushed and you will spend more just to get it over with. If you must shop late, do it on the Boxing Day sales on the 26 th. Either you will have a lot fewer friends and relatives to buy for since you showed up empty handed on the 25 th OR you can be hyper-organized and pick up gifts for Christmas 2006!

(MY birthday, btw, is on the 27 th of December and I think one of the latent motivations I felt to become a financial planner was created when I would spend hours figuring out whether all my “combined” gifts were worth more than the separate birthday/Christmas gifts my sister-born in July-received.)

Creating a budget for your presents is however, merely a band-aid solution to the financial apocalypse that is holiday gift spending. A surer solution is, to a greater or lesser extent, to change the rules. It’s a little late in the year to be suggesting anything too radical but here are some things you can propose to your family for next year. It requires the family to agree as a group and that can cause stress, but properly broached and accepted with the right attitude, it can be a tremendous way to reduce the financial burden.

Listed in order of increasingly radical solutions:

Place a limit on what can be spent on family gifts.

If you say no more than $20 per gift per person or family gift, you can keep things simple. Further, finding funky gifts cheap can be lots of fun.

Practical Gifts

My wife and I each year give ourselves tender, romantic thoughtful gifts each year. Like last year, for example when we gave each other the new dishwasher. Then on Christmas day we each get some tiny little thing.

For large families, limit gifts to say three each, randomly assigned.

You all choose three names out of a hat and then have to buy only those three gifts. This can be done with or without a price ceiling.

Buy charity gifts.

One year, my mother-in-law suggested everyone bought wind up toys as gifts. Everyone got gifts to open, a vote was cast on the best one and that person boxed them all up and took them to a women’s shelter.

Have a true “no money” Christmas

This theme is not about making arts and crafty bird feeders from margarine containers or brewing biodiesel from deep fryer grease. My mother in law also suggested this one based on a couple of premises:

  • The extended family, what with re-marriages and cousins etc ran up to nearly 50 people.
  • All the adults, by and large, have all the stuff they want.

In the fall a few years ago, she proposed, well, decreed really, that the coming Christmas was to be a No Money Christmas, ie. No money could be spent on buying Christmas gifts. The idea was to be the most creative and clever and all the gifts were slowly opened one at a time and commented on and critiqued harshly and cleverly. It worked out very well because there was still turkey, games, drinks and old movies. That first year I received some pictures of sport cars, private jets and an island resort, things that my brother in law WOULD have bought for me if allowed to spend money, a music CD from the sister in law (it was the 11 th CD of her joining the CD club, ordering 10 and getting the 11 th one free) and the winter gloves I had left there two weeks previous. It was hilarious and such a huge hit that it now happens every year. In fact the kids, who still get “real” gifts, now look forward to the time when they are big enough to be included with the adults and cease to receive real presents.

If this sort of strategy is a radical change for your own family, then you should approach it cautiously. As a way of introducing the subject you could announce that you want all of the presents you receive to be under $20. This will probably lead to other family members seizing on the same idea and hopefully seeing it mushroom. Christmas time should be about holidays, parties, friends and family and food. Not bills.

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