With the holidays fast approaching, people are about to amp up spending. We give gifts for a few reasons. First, it feels great to give gifts to the people we love. We see the smiles on their faces when they open their presents and we know that we put those smiles there. But giving gifts has also become expected in our culture. Often we don’t buy gifts for the joy of giving something to a loved one, we buy them because we feel obligated to, because we’re afraid that not giving a gift will reflect poorly on us. And boy are there a lot of occasions where gift-giving has become obligatory. Christmas, birthdays, weddings, anniversaries, and graduations to name a few. But what do you do when you’re practicing a frugal lifestyle, or worse, trying to get out of debt? It’s my personal belief that if you’re in debt, you shouldn’t be giving anything more than a card, but I know very few people would heed that advice, so let’s try for some more practical advice.
After the jump, some occasion-specific tactics for gifting on a budget.
If your family or a group of friends usually exchanges gifts for Christmas, suggest doing Secret Santa. In a large group, you can save tons of money just buying a gift for one person instead of buying gifts for everyone. You can take it a step further by putting a cap on how much the gift can cost.
If you have a talent for baking, a tin of cookies is always an acceptable gift. In fact, it’s an acceptable gift for nearly any occasion on this list. If you don’t have a talent for baking, you probably know someone who does who would be happy to whip up a tin of cookies for the cost of the ingredients plus a few bucks.
You probably can’t swing a tin of cookies as a wedding gift, but you can certainly offer your talents as a wedding gift. If you’re a baker, you could offer to make a cake (even if you can’t do a wedding cake, a lot of people have a second cake, or a “groom’s cake” nowadays). If you’re a great photographer, you could offer to take the engagement photos. If you have a knack for design, you could create the centerpieces. My fiance and I are thinking of asking one of our friends to choreograph our first dance for us since we want to do something special.
If you’re already spending money on travel to get to the wedding, you can politely tell the bride and groom that you don’t have it in your budget to also get them a gift. Most brides and grooms should be understanding of this. But don’t forget to get them a card!
You and your partner should be on the same page when it comes to finances, and anniversary gifts are no exception. If you’re working to get out of debt or just saving every extra penny for the future, agree to a spending limit on anniversary gifts. Anniversaries are supposed to be about reflecting on the time you’ve spent with your partner and basking in each other’s love anyway, so as long as you can find a way to show your partner that you love him/her, that’s all that really matters. You could get a picture of the two of you framed, have a picnic somewhere romantic, visit the place you first met each other, something inexpensive that has special meaning to you. This is probably the occasion where people have the greatest desire to splurge, so if you really want to spend the money to do something extra special, treat it as you would any other big purchase – budget for it well in advance.
Here’s a rule of thumb inspired by a couple of my friends: if you’re still paying off the engagement ring by the time you get to your first anniversary, you may not buy her another piece of jewelry.
Depending on what the person is graduating from, there are plenty of inexpensive, but thoughtful, options. If it’s a high school graduate, they’ll be excited to get anything. Give them a $20 gift certificate to Applebee’s and they’ll probably be happy. For a college grad, you can get them something useful, like a book on how to ace an interview, or a simple cook book. In general, I don’t think most graduates see their graduation as a day to collect gifts, they’re just happy to be done with school and ready to move onto the next chapter of their lives. They’ll be happy to get nice gifts, but they won’t be upset if you get them something small, or even just a card.
If this just isn’t your style and you like going big on gifts, there’s nothing necessarily wrong with that as long as you’re not in debt. But you absolutely must work your gifts into your budget. Make a separate savings account specifically for gift giving and put a little bit of money into it each month. You could sacrifice some of your wants for a few months to save up the extra money, but don’t sacrifice contributions to your emergency fund, retirement accounts, children’s college fund, or down payment fund. Those things are all more important than a gift.