Beating Broke

Personal Finance from the Broke Perspective

What Christmas Expectations Are You Setting for Your Children?

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What are your children’s expectations for Christmas presents?  Do they expect many Christmas presents under the tree and their every wish to be met?  Do they expect a modest Christmas?

Believe it or not, the answer to this question doesn’t really depend on your kids; it depends on you.  From the time your children are small, you set their expectations, and what you set by example is what they come to know as “normal” (until they get married and find that their partner has a different “normal” than they do, but that is another post).

If you have small children, think carefully about what expectations you want to give your children.  Yes, retailers would prefer that you shop ’til you drop and give your credit card a work out, but it doesn’t have to be that way.  Here are what some people do who have chosen to have a different Christmas celebration than retailers would prefer you have:

1.  Give some new gifts, some used, and some homemade.

Amy Dacyczyn, the original Frugal Zealot and author of The Tightwad Gazette had six children to buy for.  Each child got one new gift.  Then, they got a few gifts that were used items that she had purchased at garage sales and thrift stores.  She also made her children a few gifts.  If I remember correctly, she spent $50 or under for each child.  (Of course, this was 20 years ago, so accounting for inflation, she spent no more than $82 for each child in 2012 dollars.

While you might balk at the idea of giving garage sale gifts for presents, I can tell you that I followed Dacyczyn’s practices when I had my own kids, and some of our kids’ presents are nice finds that we got at garage sales.  My oldest is 8, and he has yet to complain about it because it is what he expects.  He still does get new presents, but there are used ones in the mix.  (I like the term recycled better, though.)

2.  Give a charitable donation instead of gifts.

Ann Voskamp, the blogger behind A Holy Experience, recounts that one Christmas Eve 10 years ago, her son asked her, “Why don’t we give up things so we can give to Jesus for his birthday?”  The question radically changed Voskamp’s way of thinking, and from that year on, her family has foregone giving Christmas gifts to one another.  Instead, each day during Advent they make a charitable donation using the money they would have spent on gifts.

This is a radical idea, to be sure, but it is the norm now for her family.

3.  Only give 3 gifts.

Another idea based in Christian roots is to only give your children three gifts.  Some do this because the Wise Men brought Jesus 3 gifts.  Others take a spin on this and give their children three gifts–something they want, something they need, and something they can experience.

4.  Meet needs as gifts.

Gifts don’t have to be all luxuries and things you want.  When I was growing up, my parents’ money was extremely tight.  I got some new clothes during the back to school season, but my winter clothes and sometimes even my uniform clothing or new backpack were all given as Christmas presents.  I was always excited to get these things and never felt deprived.  My mom told me a few years ago that she had to give gifts this way because money was so tight, but I never knew.  This practice was normal for me.

Christmas gift giving was not always the extravaganza it is now.  As an adult, I reread the Little House in the Prairie books, and I was struck by how happy Laura was to get her very own handmade tin cup and an orange for Christmas one year.

If you are a parent of small children, you can start your Christmas gift giving traditions now, and they don’t have to involve credit card debt you can’t pay off until March or April.

What is your favorite way to give gifts at Christmas?

img credit: South Granville Live on Flickr

How Bad is Your Charity?

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Salvation Army Building London
Often times, when a person is picking a charity to donate to or volunteer for, they look at only a few things.  What the charity does, and where it does it.  If they like pets, maybe they volunteer or donate to the ASPCA.  Or, if they want to keep their efforts a little closer to home, they volunteer or donate to their local Humane Society or shelter.  One of the things that they very infrequently look at is how much of the money they donate is really going to the cause.

Main Street had a nice list a few days back about the charities with the highest administrative costs.  Top of the list is a charity by the name of the American Tract Society.  68% of the donations that they receive go towards paying administrative costs.  Or, 32% goes towards the actual charitable work that they do.  To create their list, they used a tool called the Charity Navigator.  They compile the actual numbers via the IRS filings and put together a sort of watch dog group for charity costs.

One of the things that I noticed is that many of the charities on Main Streets list are smaller charities, which could account for some of the costs.  A smaller charity doesn’t gather the bigger donations from as wide of a base as some of the larger charities and so has a higher administrative cost percentage.  Even so, the next time you decide to give to a charity, it might bear taking a look at the tool at Charity Navigator and see if that charity is a “bad” charity.

photo credit: puritani35

Could You Give It All Away?

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There’s been a bit of publicity lately about The Giving Pledge, an organization started/inspired by Warren Buffett and Bill Gates that is aimed at the Forbes wealthiest 400 people.  They and the organization encourage the worlds wealthy to give it all away.  Or at least a majority of their wealth.

Reading about all of this brings up the questions.  Could you give it all away?  Would you?  Should you?

At the real bottom of this is a more important question.  Why do we build wealth?  What purpose do we give our lives that we strive to attain wealth.  In Warren Buffetts case, I think you could argue that he has always seen it as a challenge.  Bill Gates saw a technological breakthrough and found a way to improve upon it.  Again, a challenge.  The challenge is not usually about the money though.  Buffett saw the building of the businesses as the challenge.  He wanted to be a better investor than anyone else.  Mission accomplished, I’d say.  Gates’ passion was in geekery.  He wanted to build a better computer.  Also, mission accomplished.

Gates and Buffetts passions made them very rich.  And, since you can’t take it with you, it’s gotta go somewhere.  Both have chosen to give a majority of their wealth away.  Kudos to them.  But, would you?  Could you?

For me, I would like to think that I could and would give most of it away.  Since I don’t have any to speak of, it’s easy to say that.  Ask me again when I’m 50 ish. 😉  Many Christians would say that it’s the right thing to do.  Non-Christians will have a different reason.  Some would say that we have a moral obligation to make someone elses life better and to share the wealth.  Whatever the reason, I think it really comes down to doing good.  Most people are good by nature.  And doing good for others is in our nature.  That doesn’t mean that we all want to be paupers who volunteer all their time, but most of us are happy to share some of our spoils with those less fortunate.

What about you?  Would you give it away?  Why?