There are many great things about Christmas, but the cost of "doing it right" isn't one of them. The sentiment associated with celebrating and gift-giving with family and friends is enough to derail even the most well-intentioned budgeteer. To help you more fully appreciate the cost of all your gift-giving, let me pose this question: How many days will you have to work in order to pay for your Christmas generosity? How many days of your hard-earned income will you spend that could otherwise be used to pay off long-standing consumer debt or added to your emergency savings? Here's how to find out.
The table below assumes you work a seven-hour day, and that standard social security withholdings, state taxes of 6%, and federal taxes of 25% apply. Estimate how much money you'll be spending on Christmas this year (don't forget the cards, wrap, greenery, lights, and decorations as well as the gifts). Then move down to the row that most closely reflects your hourly wage. You'll learn the approximate number of days needed on the job to pay for your gift-giving. (And this assumes you pay your bills on time and incur no credit card interest expense along the way!) For example, if you earn $12 an hour and your family spends $800 for Christmas, you'll need to work 15.5 days to get that $800 back. That's more than three weeks!
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What can you do to minimize the damage and keep your budget on track? Let me suggest a few gifts that could be worth more to the recipient than anything you could save up for and purchase for your family or friends.
• First, consider giving a gift of service. You could give coupons for running errands, shopping, yard and house work, car washes, and the like. You may have other skills like financial knowledge or handyman experience. You could offer to help someone with their taxes or analyze the costs of various colleges they're considering sending their kids to. For the spreadsheet challenged, this is a real gift. Or perhaps someone needs help with a home remodeling project that involves a little electrical work or plumbing. You get the idea. Look at your skill set and see how you could "give it away." Remember, gifts of service require some careful planning, presentation, and follow-through. It's one thing to give the gift, but it's more important to fulfill the gift and do it with a pleasant attitude.
• On a similar note, you could make a gift for someone. As someone who's gotten into photography, I can see the sentimental value of a well-composed photograph of family, children, or a special occasion. Such a gift can keep on giving for years to come when they see the framed photos on display. Or, perhaps you can cook. Use your skills to make some bread or cookies or some other kind of treat that you're famous for within the family. Anyone can make cookies, but only you can still make chocolate chip cookies the way great grandma did. And the fortunate ones who've eaten them in the past will be thankful for them. What woman doesn't like chocolate? And what man turns down cookies?
• Lastly, may I suggest giving the gift of time together. Like the gift of service, it's easy on the wallet, but this gift is possibly a little more demanding. (It's not always easy spending quality time with Crazy Uncle Lou!) Similar to coupons for gifts of service, you can give a coupon for a movie followed by dinner (so you can discuss the flick, or as in the Pryor family case, dissect it) or maybe a bowling, golfing, or shopping outing together. The activity may be nice, but it's the time you spend together—the bonding part—that's really the gift. And it's something you'll remember.
So this Christmas, rather then blow your earnings on gifts that will be forgotten, give something different this time around. Sure, a wrapped gift from the local mall could be nice, but maybe a trip to Starbucks with Grandma Susu would be even nicer. Perhaps you could have a small gathering—inviting family members or friends over for a dessert and to play a few games and reminisce. ("Remember those times we went Christmas caroling only because Mom promised us free pizza and toffee covered popcorn balls afterwards?") Ahh... warm memories. I find, even though I am "grown up" now, that hanging out with my family and joking about old times or looking ahead to our coming trips to the beach is more fun than just about anything. Family times together are true gifts. Can't be bought. And won't be forgotten.
© Sound Mind Investing
Published since 1990, Sound Mind Investing is America's best-selling financial newsletter written from a biblical perspective. 
