We usually make a list of things to look for (as we do virtually every time we go shopping). I thought it might be worthwhile to share that list with you, to help you if you’re out and about the next few days and looking to shave some dollars off of next year’s Christmas budget (and maybe even net a few dollars right now).

Christmas lights If you need to replace some lights – or even just intend to hang more lights outdoors, as we do next year – now is the time to pick up Christmas lights, as many department stores deeply discount such lights. Even better, many energy companies will offer you a rebate for buying LED Christmas lights, so save your receipts and check with your energy company.

Wrapping paper and supplies Wrapping paper is an obvious thing that many people look for at after Christmas sales, but you can often find many other supplies on deep discount as well, such as gift wrapping tape and ribbon.

Cards We usually make our own Christmas cards (so if we see blank cards, we might pick them up), but for many people, Christmas cards can be a spectacular bargain right now as many stores are offloading them.

Non-perishable gift baskets Unsold gift baskets often go at a tremendous discount and if you can find ones that are non-perishable (like bath supplies and such), they can easily be stored for a year and given the following December. Many people often exchange such gift baskets with professional acquaintances and such, so this can be a tremendous savings. If you know you’ll be giving gift baskets of this kind for Christmas 2010, get them now and save yourself some cash.

Electronics – but only if you’re patient The Consumer Electronics Show takes place early each January. During that show, electronics companies unveil their product lines for the coming year and usually eliminate some product lines to replace them. Quite often, retailers know what lines are going to be cut and start trimming the prices on those lines to clear space for the new lines to be unveiled at CES. Thus, late December through January are great times to pick up home electronics.

Of course, you have to be careful with this type of sale. For starters, do not be afraid of the word “clearance” or other such words. Almost always, there’s nothing at all wrong with the model – it’s just being replaced by a different model in the coming year – one HDTV being replaced with a very similar HDTV with a higher price, for example. Also, different stores tend to handle such clearances differently, so you may want to simply shop around for a while to look for what you need. Don’t lock yourself into a particular brand or model – keep your eyes open. Write down clearance models, then research them at home.

Exercise equipment These items are usually on sale due to the upcoming New Year (and related New Year’s resolutions), but there are often spectacular bargains on basic exercise equipment in the week between Christmas and New Years.

The absolute most important thing to remember when considering sales is to focus only on stuff you actually need or have a direct use for. Buying things you don’t really want merely because they’re on sale is a sure way to put yourself in a worse financial position. If you’re intending to replace a flaky television, for example, now is the time to do it – but if you’re thinking of dumping thousands into upgrading your television by 4″, consider other uses for your money.

Tune in tomorrow for our regularly scheduled programming.

Between the wrapping paper, ribbons, bows, tags, and other things, I’ve often spent $20-25 on just wrapping the gifts at Christmastime. This seems silly. How do you wrap presents? I’m sure you’ve got a less expensive way.

To me, the purpose of wrapping paper is simply to disguise gifts from the receiver while at least looking moderately visually interesting – nothing more, nothing less. I don’t see the purpose in spending lots of money on the “perfect” wrapping paper or on elegant ribbons when they’re going to wind up being a big pile of trash on Christmas morning.

Instead, here’s my Christmas wrapping strategy. All told, I’ll spend about $4 on materials and those materials will provide more than enough for several Christmases.

In the picture above, I’m about to wrap a copy of the video game Nintendogs for my eight year old niece (her parents might read The Simple Dollar, but I’m pretty sure she does not). I’m going to wrap it in plain brown paper, the type you would use for packaging things to mail via the Postal Service or UPS.

You can get an enormous roll of such paper for just a couple dollars. Even better, you can get brown paper at the store by requesting paper bags and trimming off the bottoms of the bags. Starting in about September, I start requesting such bags at the store so that I can give the bags a second life.

Here it is, all wrapped up. A little secret: I took pictures of several presents being wrapped and this one turned out the best – I’m not exactly a gift-wrapping expert, even though I’ve done it many times.

This looks fine, but it is a bit drab. Surely, there’s something we can do to color it up a little…

Yarn is what I use. You can buy an enormous amount of it for a very low price (the depicted roll cost less than a dollar) and it adds a certain homespun flair that just isn’t captured with ribbons.

It’s very easy to use yarn to add flair to your package.

To measure the length of yarn, I wrap it around the gift about three and a half full loops, or about seven times the average length of the package. It might be a little long, but you can trim off excess. I prefer to go longer than I need than to go too short.

After I cut off an appropriate length, I spread out the yarn in a straight line on the table, then set the package face-down in the middle of the piece of yarn. I pick up the two ends and…

… loop them together like so. Then, I turn the package over, tie a simple bow on the front (one that can be opened with a good tug, basically the same knot as is used to tie shoes), and I’m finished with the wrapping.

I like the big, floppy bow look – you may not. If you want a shorter bow, just tug on the ends of the bow until the loops are as short as you like, then trim the long ends. You could also use very long ends to make a lot of loops for a more decorative bow, if you’d like.

I personally really like the aesthetics. It calls to mind the old Rodgers and Hammerstiein tune … little brown packages tied up with string / these are a few of my favorite things.

What about the name?

I simply write it on the package in black marker, no fuss, no muss. You may also choose to write it on the back so the front looks undisturbed by the ink – whatever you’d like.

If you use paper bags from the store, the cost of such wrapping is approaching free – you’re using a tiny fractional amount of a roll of tape and of the yarn bundle and that’s all. Even if you’re using a roll of packaging paper, the cost is still far below what one might spend on typical wrapping paper.

Other ideas to consider:

Have grandchildren decorate packages for grandparents. Give them some markers and have them decorate such a package to their heart’s content.

Use the comic pages from the Sunday newspaper for children’s presents. Just save them for a few weeks and you’ll have plenty.

Print your own designs on the brown paper. Measure off a size that your printer can handle and print a design right on the brown paper. This works really well for smaller gifts.

Good luck!

Here’s the original page if you can’t see the embedded video.

While I was watching it, I was caught up with two strongly conflicting feelings.

At first, I felt happy for the children. Overjoyed children, on some level, always make me feel happy. I’m reminded of the unabashed joy of some of my own childhood moments, plus I can’t help but consider the happiness of my own children, too.

Yet, as I kept watching, the video began to unnerve me. These children were expressing an enormous amount of joy due to receiving an expensive consumer electronics item. I couldn’t help but think of Christmas 1987, where I reacted in a very similar way to receiving a Nintendo Entertainment System. It is still the single strongest memory I have of a childhood Christmas – and I remember the near ecstasy I had when my parents brought that item out of the bedroom.

What brought on such huge anticipation and excitement in a consumer product? For me, there were a lot of factors – friends at school were a big part of it, as were television commercials and, to a degree, my parents played along as well. They would encourage me to mark things that I wanted out of toy catalogues, for example, and I can remember drawing many, many circles around the Nintendo that year.

The end result? I spent more than a month in a fever pitch of anticipation about Christmas, hoping I would receive a particular item, and I was in an intensely excited frenzy when Christmas morning finally arrived. It was an emotional crescendo – and, frankly, it was the exact way that Nintendo’s marketing department hoped it would end, with a huge rush of happiness associated with that consumer product. Is it really a coincidence that our home currently has several Nintendo products in it? Likely not.

When I see those children in fits of ecstasy, I see children beginning to assign happiness to consumer goods – and that worries me. For most of my early adulthood, I did that very same thing – I convinced myself that my happiness was directly connected to what material items I had. I’d buy things and barely use them because of the rush of owning that product, and I’d quickly buy into marketing plans of all kinds. In some ways, I still do.

So this leaves the question: how can I tie together these scenes of Christmas delight with my own conflicting desires as a parent? Obviously, I want to create happy childhood memories for my kids and I also want them to actually have at least some of the things that they desire, but I also don’t want to create the type of emotional association with things that these kids are developing – and that I once developed. Here are my thoughts.

First, I won’t encourage my children to ask for anything for gifts. This discourages obsessing over Christmas lists and the like. Instead, I’ll just focus on paying attention to them – what are their interests? What are they passionate about? This requires more footwork, but it also stymies a focus on consumerism.

Next, I’ll work diligently to create positive memories with my child that aren’t associated with consumer products. Instead of leaving my children to their own ends – or spending time with them focused on consumerism – I’ll try hard to create happy memories that don’t revolve around things. I’m already actively doing this with my children – in just the last few days with my son, for example, he’s helped me make supper, we’ve played catch, we’ve wrestled in the living room until he’s laughing his head off, and we’ve also read a pile of library books together.

Finally, I want to reinforce in my children the power of giving over receiving. My childhood was often centered around the stuff I could get – there was very little focus on giving to others. We did not write thank you notes for gifts, nor was I ever really encouraged to think about giving to others, either in terms of charities or to loved ones for gift-giving occasions. I feel that this attitude contributed greatly to my financial problems in early adulthood, and I fully intend to work to implant different values in my own children.

I want my children to have a thoroughly happy and fulfilling childhood, but every time I watch that video, I feel that long term happiness is somehow being traded for the short term. That’s not a trade I want to make with my own children – there is a different way, and I intend to find it.

As for me, hopefully I’m taking a big Christmas nap in a comfortable spot somewhere.

Hope you have a very merry Christmas! Please share your favorite Christmas gift (either given or received) in the comments.

See you tomorrow!

I’m flooded with memories from my childhood – time spent with relatives that are long since past, opening memorable gifts, and the annual centerpiece of a great Christmas meal. Those memories largely fill me with joy, but with just a hint of sadness from missing things that cannot be reclaimed.

I’m filled with happiness with the time I get to spend with my family. To me, that’s the real highlight of the season – the time spent with people I care about.

I’m often filled with stress, too. It often feels that the week around Christmas is filled with a lot of obligations – gift exchanges, lots of people to visit, long trips to spend a day or two with family. It’s actually much more difficult than it used to be, since we now have to bundle up our two kids for the trips and it often feels that we spend much of Christmas simply going from place to place, unpacking and packing, bundling up kids, and often leaving where we’re at just barely after we get there.

These elements mix together into a soup that can be very dangerous for my wallet. The mix of positive sentiment, a desire to spend time with family, and the stress of the season often results in little spending mistakes – ones that add up over the length of the season.

The end result of that? An unexpectedly large credit card bill in January.

Here are some tactics I use to avoid these ups and downs.

First, I make an effort to not overschedule things. It’s more important to me to spend quality time with the most important people than to merely touch base with a lot of people, many of whom aren’t quite as important to me. That means saying “no” to some holiday invitations, even if they sound enjoyable.

Second, I try to plan ahead as much as possible. We do things like remember healthy snacks for the car (meaning there’s a greatly reduced chance that we’ll stop for food on a car trip), pack a few small “extra” gifts (ones that we’d be okay with keeping, but they also keep us from making last minute emergency trips to the store to spend more than we should), and make sure we have an emergency kit for our car (enabling us to deal more cost-effectively with any emergencies).

Next, I recognize that I can’t solve family or personal problems with expensive gifts. Buying someone a great gift will put a smile on their face, but it won’t repair a broken relationship or mend fences. Those things take time, conversation, and understanding, not a show of material largesse. Instead, we’ve focused on good gifts that really match the recipient and clearly tell them that we care without diving into ostentatiousness.

Finally, I won’t turn down the generosity of family and friends. If a friend or family member invites us to stay with them, I’ll happily accept. If we’re invited to share a meal with someone important to us, we’ll break bread with them. I used to let pride stand in the way of such offers and often argue that I didn’t want to be a burden, but I came to realize that such offers are made because people want to share with you and help you, and it’s completely polite to accept what’s offered.

The Christmas season is about people, above all else, but that doesn’t mean that the holiday season makes it okay to mindlessly break out the cash or the plastic. Keep your wits about you, plan ahead, and this year you won’t be left with the big bill in January.

Every year, people lament the commercialization of Christmas, yet few are willing to do anything about it. Christmas displays now appear in August. Black Friday’s mad rush only grows madder. But, as Trent has noted, gifts that matter don’t come from Wal-Mart.

Unplug the Christmas machine
My wife and I take pleasure in creating homemade Christmas gifts, as do many of our friends. But even these are secondary to the time we spend “playing Santa”, driving around making holiday deliveries to the people we know. As we chat on porches or sit in living rooms, sipping hot cocoa and fawning over children, it’s the bonds of friendship that are important — not the gifts.

In fact, I believe it’s rituals like our Christmas delivery that form the heart of a meaningful season. Traditions add layers of texture to your life which last not just during the holidays, but throughout the entire year.

My public library carries a great book about this subject, and I borrow it every year just before Thanksgiving. Unplug the Christmas Machine by Jo Robinson and Jean Coppock Staeheli urges readers to escape the commercialism of the holiday season, to make it a “joyful, stress-free” time for the family.

The four things children really want for Christmas
In a chapter entitled “The Four Things Children Really Want for Christmas”, the authors write:

As early as the age of four or five, [children] can lose the ability to be delighted by the sights and sounds of Christmas, only to gain a two-month-long obsession with brand-name toys. Suddenly, all they seem to care about is how many presents they will be getting and how many days are left until they unwrap them.

Many parents find it a challenge to create a simple value-centered Christmas in the midst of all the commercial pressure. But the task is made much easier when parents keep in mind the four things that children really want for Christmas.

Robinson and Staeheli argue that children don’t really want clothes and toys and games. The four things they actually want are:

1. A relaxed and loving time with the family. Children need relaxed attention. During the holidays, normal family routines are temporarily set aside for parties, shopping, and special events. It’s important to slow down and spend quality time with your kids.
2. Realistic expectations about gifts. Kids enjoy looking forward to gifts and then having their expectations met. The key is to manage their expectations. By educating them about what “Santa” can afford, and is willing to give, it’s possible to prevent disappointment on Christmas morning.
3. An evenly-paced holiday season. The modern Christmas season starts months before December 25th, when the first store displays go up. Things end with a bang on Christmas day. The authors suggest beginning the season late in the year instead. Get out the Christmas music on December 15th. Pick out a tree on the following weekend. Schedule some low-key family events during Christmas week. Stretch the season to New Years Day.
4. Reliable family traditions. When I talk to my friends about what Christmas was like when we were Children, it’s not the gifts that we remember. We recall the things we did as a family. I remember sleeping next to the tree every Christmas eve, but never being able to catch Santa in the act. I remember seeing the cousins. I remember decorating the trailer house. Your kids will remember the traditions, not the gifts.

That last point is so important: it’s the traditions that make this season special, not the gifts.

Holiday traditions
Lynnae from Being Frugal recently produced a video highlighting one of her family’s traditions. “To count down the days until Christmas, I wrap up 24 of our favorite Christmas storybooks…Every night before bed, my children get to pick out one book from the stack, and we’ll read it before bed.” It’s like an Advent calendar made up of books!

When I was a boy, one of my favorite traditions was listening to The Cinnamon Bear, an old-time radio program broadcast by a local station every evening at 7 p.m. This was a pre-bed ritual for years, and one I treasure to this day.

I know that toys and the games were important to me when I was a child. As an adult, however, the only present that I actually remember was my Evil Knievel Super Stunt Set. All of the other toys are forgotten. But the memories of cooking, cousins, and Christmas lights still remain.

Wherever you are and whatever you do this holiday season, I wish you the very best — Merry Christmas.

The economic news is grim, and even though I believe the only thing we have to fear is fear itself, that doesn’t change the stark reality of things.

Most of us have lost a large swath of our retirement savings in the last year. My overall retirement savings has gone down about 30% over the past thirteen months, even with late 2007 and 2008 contributions.

Some of us have lost our jobs. I have at least three friends who have been downsized in the past calendar year.

All of us are uncertain right now – and that’s understandable. We’re looking towards living cheaper and letting go of the cultural trend towards overspending that has happened over the past several years.

Right now, many of us are looking forward to December – and to the holiday season – with some joy and some trepidation.

Can we afford to travel this year?

Can we afford to put a lot of Christmas presents under the tree – or should we?

Shouldn’t we scale back this year – big time?

Don’t worry. You’re not alone. I’m asking myself these same questions, as are millions of others out there.

But the answer to it is easy – and it’s right in front of our faces.

It’s easy to get caught up in the expenses of December – the parties, the presents, and the inevitable bills.

But that’s not what the holiday season is about.

It’s about time, not money. It’s about sitting around with your favorite loved ones, telling tall tales and playing games. It’s about the bright smile on your child’s face regardless of what’s under the tree. It’s about holding your grandmother’s hand and wishing her a merry Christmas, knowing that she’s been there for you over and over again throughout your life and also knowing that she might not be there forever.

So, yes, by all means be frugal this Christmas when it comes to your money. Cut back on the extravagant presents and focus on more thoughtful items. Tone down the scale of the parties – there’s no need to have a huge bacchanal this year.

But don’t cut down on the time. Savor every minute of it.

Because in the end, the time you spend with the people around you is the most valuable thing of all. No expensive present, no ostentatious party, nothing can compare to that time.

A less expensive present than usual is quickly forgotten. What’s remembered is the time spent together.

It may be a long December for some, but few things will make it better than focusing on what’s important and letting the rest drop off to the side.

And its been a long December and theres reason to believe
Maybe this year will be better than the last
I cant remember all the times I tried to tell my myself
To hold on to these moments as they pass
- Counting Crows, A Long December

With the Christmas holidays sneaking up on us, we’re very, very glad we saved ahead for the Christmas season around here. In fact, our Christmas shopping is in full swing and we have several people marked off already.

Isn’t that jumping the gun a little? I don’t see it that way at all. Instead, I see it as a recipe for saving money, giving thoughtful gifts, and creating a memorable Christmas holiday. Here are eleven tactics to do just that.

Decorate in a sentimental fashion. For me, Christmas isn’t Christmas without using a set of handmade Christmas tree ornaments that my mother made for me when I was young. She made a few a year for more than a decade, eventually making a very beautiful set that I remember fondly from my early years. Then, during the first Christmas I had in a home of my own, my mother gave the ornaments to me. They are the centerpiece of all of our decorations. Rather than buying cheap disposable decorations that you’ll toss out in a few years, make your own – high quality ones that will last for many, many years. There are lots of ways to do this – ceramics, wood, and so on. If you don’t have artistic ability, you can still simply seek decorations made by others that are well made, have personal meaning to you, and will last for many years.

Write thoughtful notes, not mindless cards. Several people I know send out about two hundred Christmas cards a year. They’re generic cards, merely signed and without a note – and thus I feel indifference when I look at them. Instead of plopping down money for a mass mailing of meaninglessness, spend some time writing notes to the people you genuinely care about. That way, you’ll reduce your cost (fewer “cards” sent out and less expensive “cards”) and provide something of value to the recipient.

Focus on thoughtful gifts, not showy or expensive. A ten dollar gift that actually matches a recipient well means far more than a thirty dollar gift that’s useless to the recipient. But how can you know what to get? If you’re stymied, make a list of the interests that the recipient has – think hard about it. Then, research one or two of those areas and find intriguing and useful gifts in that area. Know a golf fan? Get that person a box of the latest, greatest balls.

Make gifts for more casual exchanges. Make and can a batch of caramel pear butter, for example, and give away jars of this in an exchange. It’s a gift that most people will appreciate and if you make a large batch of it, it’s pretty cheap per jar. In fact, my wife and I are planning on giving many people gifts like this for Christmas.

Be selective about the gift exchanges you participate in. In the past, I’ve been encouraged to exchange gifts with as many as ten different groups at Christmastime, each one expecting a gift in the $20-30 range. That wound up being very, very expensive – and very time-consuming, too. Instead of just agreeing to be in every gift exchange that comes along, bow gracefully out of a few. Suggest to the people involved that they just skip the exchange and instead just have a pleasant potluck dinner instead, saving everyone some cash.

Set a strict dollar limit for what you will spend on each person. When you’re writing your list, set a dollar cap that you’ll spend on each person and literally write it next to that person’s name. This will help keep your focus – just like a shopping list.

Buy one nice gift instead of multiple less expensive gifts. When buying gifts for a spouse or a parent or a child, you may be tempted to buy a lot of gifts. The problem with buying a lot of gifts is that not only do you avoid putting as much thought into each one, you also end up restricting your gifts to inexpensive items. Instead, focus on one or two very nice gifts instead – ones that you can put a lot of thought into selecting the right thing.

Start shopping now for those gifts – the earlier the better. Right now is the best time to start that Christmas buying process – in fact, you’re better off starting even earlier. Think of ideas, write them down, and seek them out through comparison shopping. The longer in advance you plan a gift, the more time you have to wait for the perfect price on eBay or by comparison shopping.

Stagger gift purchases so that you’re not putting the purchases on credit. Many people go on a giant rush of buying right after Thanksgiving, then are hammered with a huge credit card bill in late December or early January. Don’t let that happen to you. Buy a few gifts now, a few more in a few weeks, and so on – and consider paying in cash, too. This way, you won’t face the mountain of purchases all on one bill (or set of bills that arrive at the same time).

Use newsprint for wrapping paper. Few things make better wrapping paper than newsprint. It looks distinctive, it can be colorful if you choose the right pieces (like the comic pages), and it’s basically free. Isn’t it better to spend an extra $10 on someone’s gift than wasting it on paper that just gets torn up on Christmas morning?

Start an automatic savings plan for NEXT Christmas NOW. Seriously. You have roughly 60 weeks until next Christmas. Start putting $5 a week away right now. Putting that in a savings account that returns 3% annually would give you $305 to spend on next year’s Christmas expenses – just $5 a week!

1. Think carefully about what went right – and what went wrong – this year. There were likely some gifts you gave that were great bargains and others that were overpriced duds. What can you learn from that? What sorts of gifts are really great bargains for the people on your list? For example, I could spend hundreds on my grandmother, but one gift that will always make her really happy is gourmet coffee (and related supplies) – so why not just focus on finding gourmet coffee bargains out there.

2. Start saving for next year now – and do it automatically. Sign up for an online savings account, like one at ING Direct (the bank I personally use) or HSBC Direct (another solid choice). Once you’re signed up, set up the account to withdraw $20 a week from your checking account. Magically, at the end of next November, that account will have nearly $1,000 in it for you to spend on Christmas gifts (after 48 weeks, it will actually have somewhere near $970 in it, depending on interest). That can help pay for much of the Christmas expense and not leave you facing a mountain of bills.

3. Do your incidental shopping for next Christmas in the next week or so. The week after Christmas is the best time to buy wrapping paper, ribbons, cards, tags, and so on for next Christmas. Pick them up at 50% off (or better) right now, then toss them into storage for eleven months. You can save some decent cash doing this. We do it every single year.

4. Make your Christmas list now for next year. Make a list of everyone you plan on buying gifts for next Christmas, then start keeping an eye out for gifts right now. For example, I have next year’s list largely ready to go, along with gift ideas for many of the people. This enables me to spend the entire year finding huge bargains on great gifts. I just simply look for the items on sale over the next twelve months.

5. If you’re going to drop your Christmas shopping on credit next year, make sure you at least have a decent credit card. Don’t just use the trusty ol’ generic MasterCard or Visa in your wallet. Instead, investigate other options and move to a primary card that can actually stick some useable and valuable rewards in your pocket. Our primary card gets us about 3% cash back, for example, when averaged out over all of our purchases.

6. Look for “better” ways to pay off the bills. Your local credit union or bank might give you a low-interest personal loan which you can use to eliminate your high-interest credit card debt – alternately, you could consolidate all of it via balance transfer onto a card offering a 0% APR balance transfer. You might also use this opportunity to clean out your closet and get rid of a bunch of stuff you don’t really need, selling it on eBay or at a local consignment shop.

As for us, we’ve actually already made our 2008 list of people to buy for, and we’re headed out to buy wrapping paper, bows, cards, and the like on Friday.

I know that many of my family members used plastic to cover their Christmas gifts. One friend of mine actually did a house refinancing to get rid of the credit card debt of this Christmas and of Christmases and other unnecessary purchases.

It is a deep psychological relief to not have to worry about any of that. I just stick to one basic principle – spend less than you earn – and I work as hard as I can to make that gap between what I earn and what I spend as big as I can. The end result of that is financial freedom – the ability to do the things I want to do.

Financial freedom isn’t about the best way to manage your bank account – it’s a tool to get there.

Financial freedom isn’t about optimizing your investments – that just ensures that your money is doing good things for you.

Financial freedom is about being able to sit here with a glass of egg nog, watching a house full of people enjoy their Christmas presents, and not have the slightest bit of worry about anything more than when the traditional Christmas ham is going to be done.

It also means that I can give the gifts I truly want to give without worrying about the money, and it means I can sit here and laugh and smile and eat Christmas cookies without any real worry in my heart.

It’s truly the best Christmas gift of all.

The best gift of all? The smile on my father’s face when he opened up his gift. He’s been a fisherman his entire life and I spent a long time searching for and finally finding the single best fish filleting knife that I could possibly find, perfectly made for his hand dimensions. The efficiency of the knife will help him to keep making perfect fillets even as he grows old.

I hope your Christmas is merry as well.

I’m very happy with the Christmas choices I’ve made this year. Some of them were really good ideas that the recipient will truly cherish. Others were astoundingly great bargains on quality items. Each one, I think, speaks directly to the person who’s receiving it in some way, which is really what I yearn for most in a Christmas gift.

Yet, somehow, with all of these presents and other items, I’m somehow left feeling empty. Even though I made some very frugal choices this year, I spent a lot of money. We tried to give a thoughtful Christmas gift to everyone who has value in our lives right now: my immediate family, my siblings and their families, my parents, my wife’s parents and siblings, and my current close circle of friends. No matter how carefully we select gifts, this adds up to a lot of money spent.

Does it really mean anything? When I look at all of the gifts under the tree, I simultaneously see both the joy of giving gifts as well as the expense that went into it. Is that gift really a worthwhile expense at all?

What I’m really trying to show with each gift is a way of saying “I love you.” To me, that’s the purpose of a Christmas gift – to tangibly say to someone that they’re important to you and that you care for them. Because of that desire, it’s often easy to fall right into the trap of giving an expensive gift to someone and not worrying about the dollar amount simply because you do care for them and you do love them.

That’s fine if you’re in good financial shape, but so many Americans are not. At least one person very close to me has taken out a home equity loan just to pay for Christmas this year. Another woman in line in front of me at a store recently had her credit card declined while making a $25 purchase.

If Christmas is about saying “I love you” to the important people in your life, say it directly instead of just showing it.

Write some heartfelt notes to people and include them with a more modest gift. I’m planning on doing this with at least a few Christmas gifts this year.

Promise to do something truly thoughtful for the person instead of buying another present. One of the best gifts I’ve received recently wasn’t an item at all. It was a gift of a bed to sleep in and an evening alone with my wife, courtesy of a caring aunt who invited us to spend a weekend at her home. She pledged to watch our children while we spent an evening like we used to before the kids were born. Does it cost her anything? No. Does it mean a lot to us? Undoubtedly. Does it reflect a lot of familial love? Of course.

Better yet, at some point during your holiday celebration, take the time to sit down with each person you care about and tell them that you love them and thank them for being a part of your life. That will mean far more than any tchotchke you can stick under the tree this year – and all it costs is a few minutes of your time. Talk about a bargain.

Christmas is about love, not about who can put the best material item under the tree. Keep that in mind and don’t spend yourself into a giant mountain of credit card debt this year.

Hi Trent. I love your blog and respect your opinions but I have to say that the very idea and existance of “it” toys offends me deeply. On principle alone I wouldn’t walk across the street to get an “it” toy for free.

I defend the right of marketers and manufacturer’s to try to build the aura of “it” for their products but I equally defend my right, as a mother, to keep my children from being exposed to the media that encourages “it” toys. And, if exposed, I stand firm on my efforts to help my children see that their lives will not be ruined forever if they never receive an “it” toy.

This is an interesting perspective well worth looking at, mostly because it wasn’t the angle I was even approaching the original article from. From my perspective, unless you homeschool your child in a media-less environment, they are going to be aware of the toys that other children desire and that will be a part of forming their own desires. If you educate your child on consumer issues well (for starters, read Born to Buy), your child should be able to recognize obvious marketing, but that doesn’t mean that any child will disdain an enjoyable toy or will completely ignore the interests of their friends.

Some of the commenters on the original post (like Elizabeth above) seem to actively avoid any heavily marketed toys and would refuse to buy them for their children. On the other hand, parents who expose their children to rampant consumerism and marketing are likely to have children that desire whatever the heavily marketed toys of the year are.

I’ll confess that I don’t like either approach, and here’s why.

I am a strong believer in educating my children about consumer issues when they’re ready. With my two year old, my current approach is to basically eliminate his exposure to persuasive advertising, but to wander with him through the toy aisles at stores and also having a strong idea of what toys he enjoys most at home. His most beloved toy at the moment is his giant bucket of Lego Duplos, so I have no problem with him being very interested in the Legos. He also enjoys small toy cars as well, so we tend to look carefully at the cars. We often put him into simple buying situations, too.

He’s already learning that he enjoys some toys more than others and I make sure to remind him of this when we are looking at toys in the store. “Remember, you play with your cars a lot at home… wouldn’t you rather spend your dollar on a handful of used cars than on that plastic tricycle?” is something I actually asked him at a yard sale not long ago. “You have a tricycle at home to ride!” He chose the cars.

Of course, often he makes choices I view as bad, but I strongly believe in freedom of choice. He might get a toy, play with it once, and forget about it. If that happens, I pull it out a few times again just to reinforce that he doesn’t like it, then put it in storage with the eventual goal of moving it onto Goodwill. Over time, we’re both building a sense of what he really likes and doesn’t like.

What does this have to do with the “it” toy? Let’s say, hypothetically, he comes home one day requesting that “it” toy. Knowing my child, I’ll usually have a fairly good idea of whether he’d like it or not. If I don’t think that he will, I might point out similar toys that he didn’t like or suggest alternative choices that I think better match him.

If he persists, however, I will get him that “it” toy, even if I’m certain he won’t play with it. Why? It becomes another valuable lesson. I can point out to him that that toy wasn’t very fun after all and it becomes a very useful lesson in how marketing works.

As for a wish list, it’s useful for grandparents or other distant relatives who might not know the child as intimately as a parent will, but as a parent, such a list is pretty useless to me. A gift from the heart, a gift that really expresses an understanding of the recipient, is always the best way to go.

So, yes, I’m completely in favor of seeking out the “it” toy provided it’s in the context of some strong consumer education. Where I don’t like it is when a parent buys it blindly for their child without any context or anything else.

In 1988, I desperately wanted the video game Super Mario Bros. 2 for Christmas. My father sat out on a loading dock behind a store for almost six hours, then bribed the guy unloading boxes with a $20 bill and five pounds of catfish fillets (my father was – and is – a small-scale commercial fisherman) to just put the game in his hands so he could go buy it.

In 1996, my niece wanted a Tickle Me Elmo. I was able to get one by going to a Toys ‘R’ Us store in West Des Moines, Iowa, waiting in line for three hours, then dashing for a huge display of them. I grabbed one, turned around, and tried to get out of the crowd when an old lady tried to actually take the toy out of my arms.

Why do this? For many of us, seeing the joy of a child receiving that one toy that they most want for Christmas is an enormous motivator. I know, certainly, that my best Christmas memories are of receiving that one toy I most wanted for Christmas, but I realize now that on some level, I realized that it was more than just the mere gift. I knew that my parents had gone through a lot of effort to get the item and make sure that I had it that year for Christmas, and I knew it was because they loved me very much.

In the end, I don’t really mind putting in a lot of effort to get that one gift that a child wishes for the most – I’m much more bothered by a mountain of gifts, as I’m a big believer in the idea of diminishing returns if a child receives a lot of presents. Thus, my gift-giving strategy usually is two or three great presents, period.

There are a lot of ways to track down that “it” gift each year:

Go shopping early on a Sunday morning. This is the time when most major retailers put out the items listed in their flyer, so if you spot a highly desirable item in a store’s flyer, you should get there early on a Sunday to procure it. I know that I used this strategy to get my Wii earlier this year.

Talk to the people in the store where you might find the item. Just ask when they usually receive shipments and whether or not they’ll be receiving a particular item soon. Even better, if you have a friend who works there, work out an arrangement where they can directly help you pick up the item (hopefully, it won’t involve you sitting out on the dock).

Call around. If the item is not sizzling hot, but a bit hard to find nonetheless, make it a routine to call a lot of local stores asking for the item on a regular basis. If they say it won’t be in stock, ask when it will be. If they don’t know, ask to talk to a manager. Sometimes, the item will wind up being ordered by that store.

Hit up Craigslist. Explain that you are trying to find a particular item for your child for Christmas and are looking for any pointers or people that have one for sale. This isn’t a guarantee, but there’s a decent chance you’ll find the help you need – but often at a premium.

The lazy solution: use eBay. For high demand items, eBay (and/or other online auction houses) is the best place to find a high-demand item – but you will pay out the nose for it. Stick with highly trustworthy sellers, too – again, you’ll have to pay a premium. However, in the end, you will get your item this way. This is definitely the lazy way to the solution.

What if you can’t afford or can’t locate that one item that your child most wants for Christmas?

Don’t make a big deal out of it. Bringing it up yourself and being upset about it will just stir emotions in your child. If your child is disappointed at Christmas, be simple but firm about it and just move on with life. If the

Find other items that the child wants. Never get in a situation where a child’s Christmas wish list consists of one item. Make sure that there are lots of items to choose from, so that even if one is a clear favorite, you still have many options.

Spend time with the child. Time is the best gift you can give, not a Nintendo Wii. Play a board game with your child, or take the child to a park, or just watch a movie together. That will mean far more to the child in the long run than a snazzy gift.

Thoughts and good stories about getting an “it” toy for Christmas are welcome in the comments.

So I threw out the list and started over.

This time, not only did it have to be a good gift under $10 to make the list, it had to be one I would like to receive. Perhaps my tastes don’t match yours or the person you’re giving the gift to, but at least these gifts are known to appeal to someone.

That being said, here are twelve great frugal gifts I’d love to see under my tree.

High-quality basic tools My toolbox is filled with one dollar screwdrivers, most of which are stripped to some degree. A good, top quality screwdriver designed to last for years and years and years is a wonderful gift for a handyman – and can easily be found under $10.

Homemade powdered mixes I mentioned my hot chocolate powdered mix a few days ago, but I like any homemade mixes: spice mixes, popcorn flavoring mixes, and so on. Just mix it up and put it in a homemade jar and I’ll like it.

A memory stick full of memories If you have a USB memory stick sitting around, load it up with pictures, videos, and song files that express fond memories of the relationship you have with that person. Include a bunch of pictures of you both, your families, and so on. These can really be awesome.

A paperback novel that the giver really loves Think of the one book you’ve read in your life that had the most impact on you (or perhaps a small handful). See if it’s available in paperback. Bingo – great inexpensive gift. Even better, put a note inside the front cover that explains why you loved the book so much and why you want to share it.

A “coupon” for a big favor When my wife and I recently had a baby shower, one person gave us a coupon for a night of babysitting of both of our kids. It was the best gift we received, and it only cost the recipient a piece of paper. This is a great gift for parents, especially ones with multiple younger children – it’s hard for them to find time together.

A single pair of very warm, high quality socks Seriously, I get a pair or two every year and they’re among my favorite gifts. Nothing’s nicer than warm feet, especially if you live in a climate with a very cold winter.

A container of homemade cookies The container doesn’t have to be anything special – a large Gladware container will do. But the inside should be filled with the best homemade cookies you can possibly turn out.

A day of volunteering Similar to the coupon for babysitting but with more appeal to the environmentally and socially minded folks, a day of volunteering can be a great gift for someone. Agree to spend a Saturday volunteering for the local charity of their choice, doing stuff like hammering nails or picking up trash. Better yet, agree to go with the person on a volunteering outing, or offer to watch their children so they can participate.

An old-fashioned safety razor This sounds completely crazy, I know, but you can usually find a beautiful one if you ask around at resale shops for far less than $10, and then package it up with some razor blades. I am a big fan of shaving the “old fashioned” way, with a safety razor, though I don’t always do it (I sometimes use a cheap disposable in the shower when I’m in a big hurry). If you know of a young man who is shaving with disposables, give this as a gift and just see what happens.

Quality pens I have a burning, undying hatred for cheap pens, but the cost difference between a cheap Bic and a decent pen makes me often stick with the cheap ones. Because of that, I love a great pen as a gift, one of the low-end types you buy at a real pen store, not in the office supply section at Target. You can usually get a very nice pen for general use for right around that $10 sweet spot.

A picture frame Go find a nice, simple, elegant picture frame and gift it. Often, people feel obligated to put some picture inside the frame. Don’t. If you want to give some pictures, give several in an included envelope and say that they can choose one of those or anything else they might want.

A heartfelt, handwritten letter or note This one seems absolutely bonkers to some, but it is often the best gift someone can possibly give, especially to someone estranged. Sit down and take some time to just write a handwritten letter to someone important in your life. Tell them honestly how you feel about them, and if the relationship is strained, and put to rest any bad feeling you might have about the situation. It will leave you feeling much better and will often move the other person to tears.

L’arche Tahoma Hope is a small group of four homes in the Tacoma, Washington area. These homes open their doors to adults with mental development disorders, providing them a place to live in a communal environment with their peers and with a staff that lives on-site with them. A typical home consists of four to ten people – assistants plus “core members,” where core members refers to the developmentally challenged individuals living there.

I’ve personally visited one of these homes. The one I visited had six developmentally disabled individuals living there, along with five assistants. At any given time during waking hours, two to three of those assistants were always involved with working with the core members.

What did they do? The home had a very large garden, and the assistants and core members all worked together as a group in that garden, raising vegetables and flowers that they would either consume themselves or sell to the public as a fundraiser. The more technical tasks were performed by the assistants and they also provided a lot of emotional support and friendship to the core members, who were largely involved with picking the vegetables and weeding and such.

The group also made paper mache flower pots for the plants out of flour, colored water, and newspaper. These actually turned out quite well, and if it were not for the fact that I was thousands of miles from home, I would have purchased one for myself.

At meal times, all of the core members and all of the assistants that were present would eat together around a large table as a group, sharing food and talking about their day.

I will be the first to admit that I do not have the spiritual fortitude or patience to do this job. I simply could not live there with the patience required day in and day out, and I am deeply thankful that there are people out there who do have that kind of patience and caring for others.

The truth is that most people don’t have that level of patience and most families do not have the support structure that is needed to provide for individuals with mental development disorders. For the most part, these individuals come from loving families who simply recognize that they don’t have the patience or the ability to truly care for them.

These homes provide a quality of life for individuals with mental development disorders that they simply could not find anywhere else in the world. They’re in an environment with their peers, where they’re not seen as outcasts, and with individuals who care enough about their situation to wish to live there and help them in many one-on-one situations.

I know that if I had a child with similar disabilities, I would truly hope that in adulthood, they could find a situation like L’arche to live in, and I am truly thankful that such places do exist and that there are people out there with enough spiritual and mental strength to work and live there, making a better life for people who weren’t given the same tools and abilities we were given at birth.

If you’re thinking of making a charitable donation this year for Christmas, please consider donating to L’arche Tahoma Hope Community. Take some time to visit their website and find out more about the amazing and life-transforming work that goes on there.

Furthermore, I will match all donations by my readers, dollar for dollar, up to $1,000 between now and December 25, 2007. All you have to do is donate to L’arche Tahoma Hope Community via JustGive.org and then forward the receipt of your donation to me – you can delete any personal information from this receipt if you wish. So, if you donate $20 to L’arche Tahoma Hope this year, I’ll match it and that gift becomes $40, and so on.

If you’d like, you can read about my 2006 charity drive for the Child Abuse Prevention Center of Dallas County, Texas.

In fact, just earlier today, my nephew went through the catalog with me, showing me items that he wanted on practically every other page. An XBox 360… Guitar Hero III… a gumball machine… a Bears jersey… and those are just the few that I can recall off the top of my head. There were many more items he showed me while leafing through the catalog.

Most people think of this as a rite of Christmas, and I do, too. I used to do the same exact thing, reading through a catalog and marking a wide variety of stuff that I’d like to receive for Christmas. I’d usually expect to receive at least a few of the items I’d marked, and my parents usually would buy me a few of them and leave them wrapped and under the tree.

However, I’m not sure how comfortable I am with the entire thing. It’s pretty clear, from watching my nephew, that the catalog does a very effective job at suggesting gifts to him. He’ll pore over individual pages, look at the images of toys that look like lots of fun to play, uses his imagination a bit, and then jumps on board. The pages are essentially an advertisement, trying to make the toys look as intriguing as possible.

In other words, on some level, Christmas catalogs encourage materialism in young children. It creates a desire within them for objects, particularly ones that they did not even conceive of wanting before the Christmas catalog came along. In fact, ideas from catalogs can often overshadow other ideas – nowhere in a catalog, for example, can one find books or highly open-ended creative toys.

I have no problem with my children wanting toys for Christmas. Toys are a wonderful thing and create countless opportunities for a child to have fun and play creatively. On the other hand, I’m not such a big fan of toys being essentially suggested to my children, either.

So what’s a healthy solution for children? I think the best idea I’ve ever heard came from an old college friend of mine. She said that one day in late October each year, her parents would get out a blank piece of paper and have them start a list of the toys and other items that they wanted for Christmas. As ideas came to them, they’d add them to the list, and then the lists would go away in early December. At no point during the Christmas season did they have a catalog to look at – the toys they listed were either from their own imagination or from other sources.

That sounds like a pretty good plan to me.

I’ve prepared a shopping list of items that you can pick up on very steep discount right now at your local department store. You can save as much as 80% on these items if you go shopping right now and place them in storage until next December.

Christmas lights I always pick up a couple replacement strands for the next year, as our old ones often wind up with a burnt-out bulb or some other problem when we bring them out of storage after Thanksgiving.

Christmas cards I am a big fan of Christmas card sending (with a personalized handwritten note inside each one, if time permits), so I stock up on these at a huge discount in the days right after Christmas. I can usually buy four boxes for less than one box cost on December 1.

Wrapping paper I’m not one who uses wrapping paper (I tend to use other things), but if you’re the type that uses paper, you’ll never find Christmas wrapping paper cheaper than in the week after Christmas.  Stock up and buy a few rolls now!
Christmas decorations My wife loves to rummage through Christmas decorations at various specialty shops at this time of year. The prices are right to get some amazing stuff for next year’s Christmas.

Ornaments Our extended families have a tradition of getting Christmas tree ornaments for our godchildren each year. We usually select this ornament from Hallmark as their inventory is now on sale at an amazingly low price.

We will probably spend less on all of the stuff we need for next year than we would have spent on just a few decorations if we had shopped early this month.

This left me wondering what we can do to encourage less materialism among children who are asking for the latest consumer goods for Christmas without leaving them disappointed on Christmas morning. The experience of receiving piles of gifts leaves them believing that they must have lots of things to have a complete Christmas.

Here’s my philosophy. The fewer gifts you get for a child, the better. My plan is to buy one significant material gift for my child each year and, if I feel more gifts are necessary, giving a mix of homemade gifts, utilitarian gifts, and investment gifts.

Why do this? I don’t want my child to ever believe that his self-worth is connected to getting the same electronic gadget or toy that his friends also received. I don’t want him to ever tie his self-worth to any sort of material good, because as I watched the children open their gifts and I remembered doing the same when I was a child, I realized that this was part of the reason I found myself in financial armageddon.

Is this right? Is this the way to avoid creating a materialistic child? Is it appropriate to handle Christmas in such a fashion? I don’t know, but it is in the back of my mind this Christmas day.