Every year after Christmas, you hear people talk about how they have to cut back on expenses because either their budget was shot paying for gifts, or they have a lot of credit card debt to pay off because they paid for gifts with that. Joe and I have been in a similar boat before, we'll run into a month with a family birthday every single week or we haven't thought about our upcoming birthdays/anniversary or something and our budget suffers because of it. This year we are using our envelope to help us stick to our budget and not overspend!
August through December are terrible months for our finances. We have to register cars, get new tires, pay for tuition and books, and all of those fun life things. October is both of our birthdays PLUS we have a bunch of other family birthdays to buy for, and then it's time for Christmas and we don't have any money saved up. When we ran into this dilemma a few months ago, we realized that our envelope could help solve this problem for us!
At the end of the year, I made a list of every birthday that we buy for and holidays that involve gifts. Then we sat down together and decided how much we wanted to spend on each other and other people for each of those and create a budget. We totaled up those amounts, and divided it to figure out how much we'd be putting into our envelope each month. That way, when Christmas comes around, we'll have enough money to go shopping without worrying about it eating into our grocery budget for the month or having to come out of some other savings.
Nobody needs to go into debt to pay for Christmas, anniversaries, birthdays, Valentine's, etc. They happen every year, so you have plenty of time to prepare! Sit down and make a budget, save money in a special account for those things, and don't spend more than you've allotted. You can live life normally and not feel like you need to eat rice and beans for a month after the holidays are over to replenish your bank account.
How do you budget for gifts?