Christmas budget

[mickeyfan2]

Per a financial advisor on TV this moring, your MAXIMUM Christmas budget (gifts, decoration, tree, food and anything else you need) should be 1.5% of your yearly gross.

So if you make 50,000 that would be $750 (maximum).

 

[EthansMom]

We're just about right on 1.5%, although I would like to find ways to get it lower.

 

[iNTeNSeBLue98]

Yeah, right! I'm no where near that amount this year.

 

[turnlisa]

Are you kidding? That would be over $2000 in our case and I am no where near! Maybe the guy on tv just didn't know how to hit the sales!

 

[TinkerPixxie]

Whats this word "budget" you all keep using ?

 

[mickeyfan2]

This is the maximum you should spend. It should include the meal, gifts, charity, travel whatever else you do. This way you do not get in over your head. BTW the financial advisor was a women not a man.

 

[skiwee1]

Bahahah! my kids would love that! I will stick with $500 a kid!

 

[Chicago526]

We aren't even close! We're spending about 25% of what this "expert" says we should! I think this guy works for the retailer's trade association (I forget their name) and is trying to drum up business!

 

[Julia M]

I've always tried to stick around 1%, and have been happy with that. Since dh and I have relatively high incomes, that works for us. I'm actually on target this year to spend .75%.

However, I keep track of EVERYTHING in my Palm......that includes gifts I purchase early, it includes stocking stuffers, it includes teachers gifts, it includes extra food supplies I purchase for making cookies, and so on.

It wouldn't surprise me if some people have a lower estimate of their holiday spending than is totally accurate, because it rolls into another budget category, or is spent so much earlier (I'm not saying that's wrong, just that some people may estimate lower)

Writing everything down really opens your eyes into what you spend. I realized I WAY overspent (for what I wanted to spend) on stocking stuffers. With so many dollar aisles sprouting up (at Target and Michael's for example), I am working to reduce that budget area.

julia

 

[dvcgirl]

Per a financial advisor on TV this moring, your Christmas budget (gifts, decoration, tree, food and anything else you need) should be 1.5% of your yearly gross.

So if you make 50,000 that would be $750.

We don't spend anywhere near that 1.5% figure, but I'm glad to hear that a financial advisor it out there giving some guidelines to folks. I'm sure we'd spend more if we had children though...

DH and I don't exchange gifts....we stopped before we were even married. We'll generally call a special dinner out, or an upcoming vacation our "gift" to each other. We stopped giving to siblings and now we focus on our nieces and nephews. We do one nice gift to each set of parents...and that's pretty much it.

 

[mickeyfan2]

However, I keep track of EVERYTHING in my Palm......that includes gifts I purchase early, it includes stocking stuffers, it includes teachers gifts, it includes extra food supplies I purchase for making cookies, and so on.

It wouldn't surprise me if some people have a lower estimate of their holiday spending than is totally accurate, because it rolls into another budget category, or is spent so much earlier (I'm not saying that's wrong, just that some people may estimate lower

Yes this was the point of the post and discussion by the Female financial advisor. It is not just gifts that we should budget for. We spend about 1% and we do an adopt-a-family (this should be included). Postage to send gift (this costs us about $100 each year), christmas cards, stamps, fresh tree, new decorations, cookie making supplies, Christmas dinner, you name it. It is not just gifts for the kids. If we only did those when we would be in the 0.5% bracket. Everything else doubles it.
The 1.5% is the MAXIMUM that you should spend.

 

[bellarella]

These percentage of income estimates are catchy formulas for TV and radio spots, but are generally pretty useless. It doesn't take into account that a family making $30,000 per year would have a much harder time coming up with $450 of disposable income after all their necessary expenses than a family making $250,000/year would likely have coming up with $3750. There is a certain "minimum" most families need to live -- you can only cut housing, food, clothing so much. For families that have larger salaries, if they generally lived below their means, they could easily be very elaborate with their holidays without causing any financial hardship for themselves, while a family barely making ends meet couldn't dream of spending 1.5% of their income.

Black and white financial advice makes good TV but lousy policy in a grey world.

 

[dvcgirl]

These percentage of income estimates are catchy formulas for TV and radio spots, but are generally pretty useless. It doesn't take into account that a family making $30,000 per year would have a much harder time coming up with $450 of disposable income after all their necessary expenses than a family making $250,000/year would likely have coming up with $3750. There is a certain "minimum" most families need to live -- you can only cut housing, food, clothing so much. For families that have larger salaries, if they generally lived below their means, they could easily be very elaborate with their holidays without causing any financial hardship for themselves, while a family barely making ends meet couldn't dream of spending 1.5% of their income.

Black and white financial advice makes good TV but lousy policy in a grey world.

You make a good point, but I don't think that there's much harm in throwing out a percentage like 1.5%...one that is small enough to keep people from getting themselves into too much trouble. Well, it would keep them out of trouble if they chose to listen to the advice I suppose.

But really, you are right, people need to know what they can afford to spend. If you are that family making 50K and you're in 10K of CC debt, well if you hear that you can spend $750 on the holidays and you've only spend $500, don't use this kind of advice as "expert" permission to go out and spend the extra $250. We spend about 25% of the "allowance" proposed by the financial advisor and trust me, we won't be running out to spend the other 75% . But again, you are correct, it's a whole lot easier for us to come up with that money than someone making 30K. Our policy with the holidays...."keep it simple".

Overall, though, the holidays are *the* time for splurge spending and impulse/guilt buying. A whole lot of people get themselves into trouble over the holidays, or in deeper trouble.

 

[CajunDixie]

Per a financial advisor on TV this moring, your MAXIMUM Christmas budget (gifts, decoration, tree, food and anything else you need) should be 1.5% of your yearly gross.

So if you make 50,000 that would be $750 (maximum).

Their advise should have focused on paying cash for everything. So many people will get into deep credit card debt in December.

 

[nbodyhome]

We aren't even close to that - and I'm doing gifts for like 22 different people, Christmas cards, etc. I would say we are about half of that. Maybe a little more when I make cookies.

Denise

 

[shades]

Their advise should have focused on paying cash for everything. So many people will get into deep credit card debt in December.

I agree with you! It doesn't matter if you are at .01 or 150% of your annual income if you pay for Christmas with a credit card and then can't pay off the balance prior to paying interest.

On that note the IPOD NANO I bought for my daughter this year cost me a small fortune by the time I added on the $59 warranty and all of the "accessories." Add in the cute Disney watch I customized for her on Disneyshopping.com - as well as some other "filler" gifts - it's going to be one Merry Christmas for her. I guess I should include the 13-day holiday we are going on to DW this year, too. What a Christmas this is gonna be for us!!

 

[rt2dz]

Putting aside the point that I can't figure out how giving to charity is a Christmas expense (you should be charitable year round and it should have a seperate budget category), I don't think 1.5% would work for us.

We put aside some money every month into a Christmas account. Come Christmas, that is our budget. It may exceede 1.5% some years and other years (like this one due to high hospital bills even with insuriance so a few months had no donations) it could go lower. Regardless, we do a cash Christmas so our budget always works as to not get us into trouble. And if we have more people to spend on (just had a new baby) then the money just needs to stretch further.

 

[Lisa loves Pooh]

Wow--who knew we were on target.

Let's see...

12 relatives....my 2 girls...hubby and myself...

I just surprise myself!

(okay just did the calculation--we will be within 100 dollars...not too shabby considering I didn't know what the limit was).

Wow--If I just cut out those relatives---we'd be doing really good!

 

[Lisa loves Pooh]

Putting aside the point that I can't figure out how giving to charity is a Christmas expense (you should be charitable year round and it should have a seperate budget category), I don't think 1.5% would work for us.

We do the gift trees at Christmas--for us it would be aside from regular charitable giving and not a regular expense.

 

[icebrat001]

We spent about 3% but that includes a 10 day cruise and stuff like that. We're fine.