Thursday, December 20, 2012

Tips for Financially Responsible Gift Giving

Of the many ways to get into debt, gift-giving seems one of the most virtuous.  Generosity and thinking of others are positive things, so all too frequently we don't stop to think about whether or not we can actually afford to be so generous.

I'm not advocating turning into a stingy Scrooge when a gift-giving occasion comes around, though.  I think you can be financially responsible and still give special gifts.

Here's how.

1. Prepare by Saving

Sure, there are some gift-giving occasions that come up with no warning, but by and large, the number of gifts you'll need to buy each year is predictable.

Your children will have birthdays every year, Christmas comes every 365 days, and so do Mother's Day and Father's Day.

So, don't let these things catch you off guard!  You'll have to spend the money no matter what, so you might as well save for it ahead of time.  Set an estimated budget for your yearly gift-giving, divide it by 12, and deposit that amount into a savings account each month (An online savings account is perfect for this.)  Even if you don't manage to save your full goal amount each month, you'll at least have something socked away, and that'll help take the sting out of gift shopping.

2. Be Realistic

When we're thinking about giving gifts to the people we love, it's easy to shop based on the budget we'd like to have rather than on the budget we do have.

While it would be awesome to have a limitless gift budget, that's just not the reality for most of us.  And though you might not be thinking much about the reality of your budget when you buy that gift, reality will indeed hit when it's time to pay the bill.

When you're shopping, try to keep your head out of the clouds, and keep your gift spending in line with the reality of your financial situation.

(And do remember that people who really love you would most certainly not want you to go into debt to buy a gift for them!)

3. Focus on Meaning More than Money

Though almost no one would turn down a super expensive present, for most people, the most memorable gifts are the ones given with thought and care, even if those gifts weren't terribly expensive.

So, when your gift-giving budget is limited, focus on finding a meaningful gift, not an expensive gift.  Study your recipient.  Think about what they like to do, listen for clues when you talk with them, and keep an eye out when you're around them to see what items they might find useful or enjoyable.  And pay attention to whether or not they like to receive practical gifts, experiential gifts, or pampering gifts.

Give these tips a try this year! You'll be so much happier without gift-giving stress and your bank account will be happier too.

Kristen is a mom, wife, the face behind The Frugal Girl and a contributor to the CareOne Debt Relief Services blog.
This has been a sponsored post.

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