How do you go with gift shopping? Are you good at anticipating all of the social occasions that will need a gift purchase throughout the year or do you find yourself in a mad rush just before the big event? Are you smart with your spending or do you always end up with blowing your budget on gifts?
With the season of giving well underway, it’s a great time to draw up some guidelines for setting a gift budget for the New Year (and for the holidays if you haven’t started shopping already).
Step 1: Plan out your year
There are three things you should consider when gift giving; your budget, the occasion, and your relationship with the recipient.
A good starting point is planning out the year ahead with your calendar. Go through each month at the beginning of the year and write down all occasions, weddings, showers, birthdays, anniversaries, Christmas and other special occasions you can think of. This will act as the base for you to plan your budget.
Step 2: Set your budget
Once you complete your list of events, it’s time to allocate your budget for each event type. This process will enable you to determine how much you will spend on gifts throughout the year. Then add a buffer to cover the unexpected gifts that may come up throughout the year.
There are no real set rules around how much you should allocate to each event, but whatever you decide should probably take into consideration how much you can afford relative to your overall day-to-day budget, the occasion and your relationship to whomever you’re giving the gift to.
For example, you’ll probably spend more on a wedding gift for a couple than for a retirement gift. Further, you’re probably going to spend more at your sibling’s wedding than the wedding of a work colleague. As a guide, here are some common events I have come up against and the amount I allocate for each in my own gift budget:
It fair to say that your own gift budget will vary depending on your own circumstances, based on your income, the size of your extended family, the number of occasions you anticipate to attend, and the person you are giving presents to. You may feel more comfortable with choosing a higher-priced item for your significant other, family members and close friends. Doing the math will help you get firm limits on how much to spend on different people across your gift list. Once you have the budgeted allocations, try to keep under the cap or as close to it as possible.
Step 3: Be savvy with your purchases
Being generous with your gift giving doesn’t necessarily mean you have to spend big. In fact, there are a few ways you can keep costs down and stretch your budget further including:
Determining your gift budget for the year is just one simple way to get smarter with spending and manage your cashflow effectively. If you’re looking other ways to get your personal budget under control, why not check out our Money Master program or speak with an adviser at The Hopkins Group today?
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