Hey, you.  I have a little secret to share.

Christmas was on December 25th this past year.

Word on the street is . . . it will be on December 25th this year, and the next, and the next, and the next  . . .

You know what else?  Your kids’ birthdays are on the same day each year. Valentine’s Day is always February 14th, Mother’s Day is always in May, and Father’s Day is always in June.

These events should not be surprises where you are suddenly scrambling for money to buy a gift for your loved ones—or worse—you go into debt because you didn’t plan ahead.

As I type this, it is June 25th—Christmas is exactly six months away.  You have roughly 183 days to plan for the biggest holiday of the year.  You should also plan for every other occasion for which you might purchase a gift.  Never again be that person who says, “Things are just too tight around this time of year . . .”  I was that person who used to utter such words—who didn’t budget for gifts and had to dig under the couch cushions come December.  That way of living is stressful and zero fun.  I finally got smart and figured out how to never worry about any gift-giving throughout the entire year.

Here is my super easy guide to help you have a stress-free gift-giving experience.

1. MAKE A LIST

Sit down and make a list of every person you anticipate giving a gift to for any occasion from January 1st-December 31st—even if it’s just a small $5 gift you give to some of your co-workers.  Those add up and must be included.

Here’s a sample list for you:

• Birthdays and Christmas {see the next list}
• Your wedding anniversary
• Parents’ anniversary
• Birthday parties your kids will attend {I estimate each of my kids attend seven a year}
• Weddings {I estimate we attend three weddings a year}
• Bridal showers
• Baby showers
• Engagement parties
• Valentine’s Day
• Easter
• Teacher Appreciation Day
• Nurse’s Day
• Administrative Assistant’s Day
• Graduation parties {I estimate at least five a year for us}
• Mother’s Day
• Father’s Day
• Grandparent’s Day
• Boss’s Day
• Sweetest Day {do people really observe this one?}
• Halloween
• Thanksgiving

Make a separate list of every single person you typically buy a birthday and/or Christmas present for.  Here’s another list to spark some ideas for you:

• Spouse
• Kids
• Parents
• Grandparents
• Nieces/Nephews
• Aunts/Uncles
• Siblings
• Cousins
• Co-workers
• Teachers
• Friends
• Pastor/mentor
• Doctor
• Mail carrier
• Hair dresser
• Neighbors
• Child care provider

#2 SET A LIMIT

Now that you have your entire list made, decide how much you plan to spend on each person for each occasion.  It’s important that you plan this NOW so that you don’t go overboard when you see something that you really want to purchase.  If you have decided ahead of time that you will only spend $50 on your cousin’s wedding gift, but you see something you know she’d love for $500, it’s easier to turn away because you have established that it’s not in your budget. If you do want to spend more for a special reason, look at suggestion #4.

Setting a limit is especially important if you have “multiples” in a situation.  For example, we have five kids.  I make a point to spend the exact same amount on each child for Christmas so that it’s fair. Spend the same on your own mother and mother-in-law for Mother’s Day, etc.

#3 ADD, DIVIDE, SAVE

Now that you’ve decided what you plan to spend on each person for each occasion, add it all up and divide by 12.

You now have your monthly budget for gifts.  

See?  It’s really so simple.

I suggest setting up a separate checking or savings account just for this. Every month I have my bank automatically transfer funds into my “gifts” account.  Whenever I need to purchase a gift, it comes out of there and I have the money for it.  No more scrambling.   You may also want to add an additional $20/month or so just in case you forgot someone or a friend suddenly decides to have a ginormous celebration for their dog’s 12th birthday. {Please don’t invite me to a party like that, btw}.

If your monthly amount is too much for you to afford, then you’re going to have to go back and reevaluate what you plan to spend on each person, or sadly, scratch some people off the list.  Sorry.  Life’s hard.

If you can’t afford the monthly costs of gifts throughout the entire year, how are you going to afford it all come December?  

Or what are you going to do when you have an influx of events? {Four of my nieces and nephews have a birthday in July alone.}

Maybe you work a seasonal job during the holidays or typically get a bonus around December.  That’s great, but I wouldn’t count on that to be my only means of Christmas spending.  What if you got laid off or Bath & Body Works is no longer hiring extra help? You’re now screwed and Christmas is just weeks away.  Not to mention, you still have other gifts throughout the year to purchase and budget for.

#4 SPECIAL OCCASIONS

Momentous occasions are bound to happen . . . your daughter’s sweet 16, your son graduates from college, your parents celebrate their 50th wedding anniversary.  You’re probably going to drop a little more cash on these special events than usual.  When you make your lists and set your spending limits, consider if you have a one of these coming up in the near future and plan accordingly.

Many times, these events call for separate planning and budgeting.  If you plan to help your child with buying a car when they turn 16, that will require a few years of planning for most people.  My husband and I celebrated our 10th anniversary last year.  Instead of gifts, we decided to take the entire family to Disney.  We planned for over three years for that trip so we could pay cash for everything.  This really had nothing to do with our gift budget.

If you’d like to really set a serious budget for all areas of your money, I highly recommend www.everydollar.com.  It’s FREE and the best budgeting tool out there.

I’d love to hear your questions or your own tips about budgeting for gifts.  Please leave them in the comments.

Happy Gift Giving!

Love,