One Caveman’s Financial Journey

This has been a rough third quarter here with us tapping our savings to pay for finishing our basement and to pay down debt, so our cash flow has been decidedly negative for some time.  Couple that with preparing for the new baby and setting up my daughter’s new bedroom, we’re nearly out of cash altogether.  With that in mind, one thing has become very clear: Christmas is going to have to be much leaner this year.

After analyzing our assets and income projection, we decided we can allot no more than $250 to gifts this Christmas - and my income from blogging is going to have to pay for it all.  In order to force us to keep that budget, we’ve instituted a cash-only Christmas.  We will only pay cash when buying gifts this Christmas.

Why Cash?

By pulling out the cash ahead of time and slowly emptying the envelope, it will help us keep our spending reigned in and will give us a good visual benchmark of how much we’ve spent and how much we have left.  When paying for gifts with a credit card, it’s easy to ignore the numbers as they add up and quickly out-spend your budget.  But with cash, when it’s gone, there’s no more spending!

And by setting a budget, pulling out the cash early, and spending it wisely, you’re forced to get more creative to create or purchase gifts with far more meaning.  According to JLP at AllFinancialMatters, 12 million Americans are still paying off last Christmas.  I wonder how much of that money was spent on meaningless and thoughtless purchases of junk.

Gifts always have much more impact on the recipient when it’s an important gesture to them.  In all cases, quality is way more important than quantity.  I would rather receive one moderately-priced gift that fits my needs and likes exactly than a room full of presents that were purchased “just because.”  (And I’m speaking from experience, here…)

What About the Internet?

I hate having to deal with the holiday shopping crowds and internet shopping provides a great opportunity to avoid those crowds.  But, obviously, internet shops can’t accept cash for your purchases.  So what are you to do?

What we do is to have the envelope sitting nearby when shopping online.  By keeping it close, it’s easy to check your remaining budget.  As you add things to your shopping cart, you pull out the equivalent amount of money from the envelope and set it aside so it can’t be “re-spent”.

We have a second envelope set up specifically to cover our credit card-driven internet purchases.  That money will remain in the envelope until our credit card bill arrives.  Only then will we deposit that money back into our checking account and pay the bill.

Half the Dollars; Double the Fun!

Ok, maybe “double” is a bit of an exaggeration, but we’re definitely not going to have any less fun this Christmas!  Both my wife and I are having fun getting creative with each other’s gifts and looking for less-traditional sources for presents.  I’ve been faithfully shopping Goodwill (and Goodwill’s online stores), Amazon’s used-product sellers, and other thrifty places.

My wife has gotten ambitious with her knitting and is making presents for both sets of parents as a way to reduce her cost.  So far, she’s fashioned a potholder for each of the mothers and now she’s working hard on an afghan.  Hand-crafted gifts are usually inexpensive and hold great meaning for the recipient since it shows they are worth the time and effort needed to create a personalized gift.

Enjoy It, No Matter What

A budget-crunched Christmas doesn’t have to be a let-down.  In fact, it really gives you the opportunity to take Christmas back to its roots as a family-centered (and Christ-centered) holiday instead of the mass-merchandiser’s boon they’ve conditioned us to expect.

How has the economy and your life’s events changed Christmas for you this year?  What does your Christmas budget look like and how do you plan to keep faithful to it?  I’d love to hear your ideas in the comments!

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• Friday Link Love - Memorial Week Edition
• Caveman’s Circumsolar Celebration - Cash For a ‘Cycle
• More Unexpected Expenses
• Reevaluating Our Emergency Fund