Christmas can be a hard time for people who are trying to be frugal. People feel obligated to buy gifts, and don't want to appear selfish or cheap by giving gifts that aren't worth that much. If you aren't careful you can spend a ludicrous amount of money on Christmas, and totally ruin a budget or savings plan. And many people do. It's too late for this year, but here are some tips for saving money on the holidays.
1. Cut back on the number of people you get gifts for.
It's simple: You shouldn't be getting gifts for everybody you know. Random office people and extended relatives don't all need gifts bought for them. Stick with close family and and friends. If you want to do something for others, a simple card is fine. Just don't spent a fortune on cards, they can be expensive too.
2. Talk with family about an alternate gift giving plan.
The normal way gifts are usually done is to for everybody to buy gifts for everybody else. This usually leaves everybody with a big pile of crap and a big pile of bills. Talk to your family about gift price limits, or even a 'secret santa', where everybody brings just one gift with no name tag, and they are passed out randomly.
Basically just work hard to change the commercial status quo that surrounds the holidays. Maybe talk to them about what you are trying to achieve with your financial independence plan, and that you don't want anybody spending money on you either. Just beware it's an uphill battle. People have insanely ingrained notions about what you are 'supposed' to do for the holidays. Your best bet is to start talking to your family about it even before thanksgiving, before they all get overcome with the Christmas (spending) spirit, and can think about it semi-rationally.
3. Stick with gifts that don't have a specific value attached to them.
If you have decided you must buy gifts for certain people, and are self-conscious about appearing too poor/frugal/cheap, then get gifts that they won't be able to tell how much they cost. If you get a Best Buy gift card for $10 they will know you spent $10, but if you get a piece of artwork, for example, they will have no idea how much money you spent on it. Wine works too, as long as they aren't a wine connoisseur or something. Anything really unique or rare or foreign will be appreciated regardless of what it actually cost you to buy it. At a recent Christmas party I went to an individual gave some kind of fossil. It looked classy was obviously unique, even though he later told me that particular fossil is fairly common and it likely wasn't very expensive at all. That is a perfect example of what I am talking about.
You could also always go the 'Costanza' route and give fake charity donations in their name.
4. Take the long view.
As with any other area, planning and patience are key. Don't wait until December 20th to figure out what you are going to be doing. Get things like wrapping paper, cards, bags and bows now, AFTER Christmas, when you can get them for pennies on the dollar, and use it next year. This goes double for decorations. If you must have a tree use a fake one and get it after Christmas when they will be practically giving them away. This goes for lights and all that too.
Buy gifts throughout the year as well. This will reduce the hectic last minute scramble, and drastically reduce the amount you are having to pay all at once at the end of the year. You also will have plenty of time to wait and jump on great bargains instead of having to get whatever you can last minute. If you see something nice for a great price you don't even have to have anybody particular in mind.
5. Cut down on travel costs.
Drive instead of fly. If you have to fly, buy the tickets as early as possible. Stay with relatives instead of at hotels. Do whatever you can to mitigate the costs of any traveling you have to do. Maybe even don't go home for Christmas every year. It's not mandatory.
- The Money Monk
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