The average American family spends $749.51 on Christmas gifts. That’s a painful amount – it’s approximately 2% of the annual take-home income of an American family.
As I’m writing this, Christmas is five months away. For me, that means it’s time to start planning.
After all, if you know an event is coming in the next six months that will slurp down 2% of your family’s take-home money, you should start planning for it now rather than later.
That’s right. My family has already started planning for Christmas in several different ways. While we expect the holiday to have a noticeable impact on our annual finances (after all, we do have children), we’ve learned over the years that if we start planning really early for Christmas, the holiday season is a lot less stressful and a lot cheaper.
Here are some of the things we’re already working on.
We assemble our Christmas list at the end of the previous year and shop all year long.
I start this off by making a list of every person we know we’re going to have to buy for during next year’s holiday season – children, parents, siblings, and so on. This way, as I have a chance to see these people during the year, I can use those meetings to get an idea of the things they like. What are they interested in? What are their favorite foods? Are they particularly passionate about a charity?
I record info like this on my Christmas list (which I keep in Evernote so I can access it on my phone wherever I’m at). By the middle of the year, my goal is to have at least a few interests jotted down for each person and, ideally, have translated those interests into at least a few specific gift ideas for each person.
How do I make that translation happen? I set up a price target for each person – say, $20. I then look for items that are fairly close to that price target in terms of suggested retail price. I’ll perhaps write down a $25 item if it’s perfect, but I’ll mostly stick to $20 or so MSRP items.
This takes some brainstorming, so I don’t do it all in one day. I usually do a bit of homework on each person, too, by checking out their Facebook page and other things about them online.
We use that item list for targeted sale shopping throughout the year.
Let’s say I’ve come up with three gift ideas for everyone on my list and perhaps five for each of my children. I know specifically what I want to get for them. Now what?
At that point, I have this giant list of items for which I’m looking for sales. I’m not particularly time-crunched here – I’m patient with it.
One thing I do is put all of the items that Amazon sells into CamelCamelCamel.com. That site sends you alerts when items you’ve listed go on sale. I’ll go to that site and put everything from my list on there, including variations of each item. Right now, I have a lot of alerts set up and I get one every few days or so.
For the first several months, I mostly look for the huge deals. I’ll find items that are $20 to $25 marked down to $8, so I’ll pick one up. I know a nice item that my son wants for Christmas that has an MSRP of $100, but I’ll find a deal for it for $39.95. That item goes in the closet.
As Christmas approaches, I slowly inch back on my threshold for what I need for a good sale. By the time November or December rolls around, pretty much any sale is good enough.
When I find the right item for someone, I just cross off all of their ideas from my shopping list. Finding one item usually eliminates two or three others.
At Christmas, almost every item we give as a gift is a sale-priced item. I don’t feel bad about this at all because I’ve put in effort finding those sales.
We make some of our gifts – and we start early.
Each year, Sarah and I make a few gifts for our friends and family members. These gifts are usually all about the effort rather than the expense, so we’ll invest quite a few hours into making gifts but the actual components aren’t all that expensive – especially since we usually buy them on sale.
In 2010, I actually did a series of posts on our homemade gifts that year (we went a little overboard on them that year, for the sake of making posts). I wrote individual posts on several homemade gift ideas:
Vanilla extract was made by buying a large bottle of low-cost vodka and soaking vanilla beans in them. We found a great price on a big pile of vanilla beans as well as a bunch of small bottles to put the finished extract into and the giant bottle of vodka was cheap, too. We made custom labels and gave the small bottles of extract away as gifts to people who like to bake or like to put a bit in their coffee.
Homemade soap is actually easier than you might think, though it does require some serious attention to safety while you’re making it (as you don’t want to get lye on your skin). If you’re making a lot of bars at once, the price per bar gets pretty low.
Caramel apple jam let us turn some of our extra apples (we had a ton that year) into a delicious treat that makes an amazing toast topping. If you have a bunch of apples, this is really inexpensive, too.
Homemade beer wasn’t particularly cheap – it was more expensive than cheap mainstream beers, but less expensive per bottle than craft beer. It was still a huge hit and more personal than just buying a six pack of craft beer for the beer lover on your list.
Wine jelly allowed us to convert a couple of bottles of wine that were just sitting in our wine rack into another delicious treat, a more tart spread than our caramel apple jam.
Meals in a jar were perfect for making simple soup kits and sharing them in a tasteful fashion. Since we made several jars of the same type of soup kit at once, we were able to buy the ingredients in bulk, bringing the price low.
Crocheted hats and scarves converted a bundle of yarn into cute items of clothing (which our daughter modeled for us). It mostly just took the addition of time and a bit of skill.
Our personalized cards and stationery were my favorite gift. All it took was a pile of blank cards, some cheap photo prints, and some construction paper to make some beautiful and memorable stationery.
Handmade ornaments are perfect gifts for family members and make a simple addition to another gift. They’re extremely cheap to make, too.
Homemade cookies are always a nice treat, and if you wrap them in cellophane and tie them with a ribbon, they can look really classy, too.
Finally, our handmade wooden photo cubes were an enormous hit with our parents. They’re still in use and on display in our parents’ homes to this day.
These are just some of the homemade gifts you can make for your family and friends. The key ingredient, as always, is time and care – the cost of many of these gifts is quite low. If you’re going to try to make some of these, now is the time to start so that you’re not crunched with another big project in November and December.
We have a standard post-Christmas shopping list.
Typically, we buy all of our wrapping paper, Christmas lights, and other seasonal material a few days after the previous Christmas when everything is on sale at the department stores. They’re often trying to get rid of paper as fast as they can, so they’ll mark it down at rates like 75% off, at which point we’ll buy a few jumbo rolls of paper and store them in our Christmas supply storage area under the stairs.
It never hurts to have this list ready and waiting. Items on our list include wrapping paper, gift tags, ribbons, and Christmas lights. What I do is add an event to my electronic calendar for December 28th entitled “Post-Christmas shopping” that includes my prepared list. That event sends an email reminder to me that includes the shopping list. That way, it just pops up in my calendar and email inbox on the right day.
The end result?
This is the process we’ve followed since 2011 for our Christmas planning and it’s worked well each year. In 2013, I kept very careful track of our expenses and noted the suggested retail price for items versus what we actually paid. We saved just shy of 55% on our total Christmas budget using these techniques – no joke.
Yes, it took more time, but by spreading out that time throughout the year, it didn’t feel like much of a time crunch at all. One hour a month feels like far less of a crunch than 12 hours in December, plus you have a much greater chance to find items on deep discount.
Christmas in July? Sounds good to me.