Revisiting budget

[mommyx4]

We are revisiting our budget today and my husband and I are disagreeing about the budget for birthdays and Christmas.  I grew up in a family with no budget, so we had tons of gifts.  My husband grew up in the complete opposite in a very blue collar family.  We are having a hard time figuring out what is a fair, *normal* amount for gift giving. 

Now, we have never budgeted these things before, so we are really trying something new here and want to commit to it.  The only variable we have is that our twins will turn 16 next December and we would like to save to purchase them a car to share(we are thinking 5K).

Otherwise, we would like to set an amount for other children's birthdays, as well as Christmas.

If you don't mind sharing, I would be so grateful. 

 

 

Edited December 27, 2016 by mommyx4

[Ravin]

I don't think I would make the car a gift budget item.

 

I'm having much the same problem--going from not having any money with which to budget to trying to set something reasonable. Part of it depends on what sort of things you get for gifts--practical stuff they need anyway, or just frivolous stuff? And how about beyond your own kids?

 

I honestly would rather spend more money on gifts for nieces and nephews, etc. (something we haven't been able to afford; we can probably do that next year) than go overboard for my own kids.

[mommyx4]

For birthday, we usually buy what they want.  My 15 year old boys asked for new baseball gloves this year.  They were $250 each. 

For Christmas, we get a mixture of both...what they want, plus things like underwear and socks in their stockings.

[Arcadia]

Birthday presents for our kids and their friends are $20 per child but we sometimes have to stretch to $25 if we buy at the last minute. These are for wants and not needs. My kids get the cash to spend so they could buy later if they didn't have anything they want by the time their birthdays come around.

 

My oldest just turn 12 earlier this month. We'll probably up the birthday money to $50 next year which was what my parents gave me as a teen.

 

My parents gave $200 for birthday money after I turned 18 in the late 80s. Going out with friends were costly and that is what the birthday money was for.

 

We don't celebrate Christmas but it was $10 per child, $20 per teen growing up in the 70s/80s as some of my relatives are Christians. My hubby budget $30 per niece and nephew for Christmas as his brother's family are Christians. Some of his cousins are Christians but he doesn't buy for his cousins' kids.

[Soror]

I think it depends on your income, debt level(and aversion to attaining more debt) and COL. The way we look at it is to take a look at income, minus savings, minus all bills and necessary expenses- then prioritize all the wants and divy out what's left into those categories. For me the year my kids turn 16 if we happen to buy them a car their other gifts would be pretty small, token type gifts. 

Edited December 27, 2016 by soror

[QueenCat]

I think that is so subjective to each family's circumstances and financial situation. What's normal to me may not be to someone else. Not right or wrong, just different. We don't give necessities as gifts to our kids but it's not wrong for other families to do so.

[Anne]

What did you spend this year?  (approximately).  Add a little extra to that amount to cover inflation and growing children, and divide by 12 - that's the amount you need to save.

 

Wrt the car - if you are giving your twins a car, will you plan to give your other children a car on their 16th birthdays also?  will they share?  In other words, think through how that will affect what you do for ALL of your children because they WILL be paying attention!!

 

Anne

[Jean in Newcastle]

I agree that this depends so much on what you can afford.  In our family we can't afford as much as some so if the kids want something more expensive we will fund part of it and they will fund the rest of it.  Sometimes that means giving them money to put towards what they want.  Sometimes it means us buying it and they pay us back (esp. if there is a good sale and they don't have all the money saved up yet). 

[Bootsie]

I would budget for an additional family car that can be used by the teens rather than provide a car for a birthday present.  Perhaps I would pay for driver's license and insurance as a present when children turn 16. 

[HomeAgain]

Our budget per child is maxed at $150 for birthday usually: cake, party/experience, presents.  The oldest will turn 18 and I see it being slightly more, but still a modest affair.

 

We don't do cars as gifts, though.  Our family has an agreement about vehicles and getting a license before age 18, and while we (the parents) are here to help and facilitate, we are not going to bear the responsibility of it.

[Zinnia]

I like looking at historical data for making budgeting decisions.  Software like YNAB (we use Mvelopes) helps with this.  We look at what we spent the previous year, decide if it worked for us (did we get a raise?  Did it feel excessive? that sort of thing), then adjust up or down based on that.

[Lecka]

To be honest we adjust these amounts based on what our other expenses have been.

 

Then, two of my kids have November birthdays, and I purposely keep their gifts light because we would rather have their specially wanted gift come at Christmas.

 

My older son's birthday is in April and we have been tying a gift to his grades for a couple of years. This is bc he will hear about video games and he has to do well in school or we won't get him a video game.

 

But just how our budget is going that month determines how much I spend on a birthday party.

 

For Christmas, we must plan on travel expenses. That is first. From there we have money left for gifts.

 

I think picture what you want. Then picture the minimum that would be a nice time for your kids. Think about the prices.

 

If you need to save up to make the minimum happen, then save up ahead of time. I start thinking about this in August and September. August is always an expensive month for us for various reasons, so I make sure we have extra going into August. Then where are we at after the inevitable expenses of August? How much will we spend on travel for Christmas? Will there be money left for other expenses like a tree, holiday meals and cookie type stuff, etc?

 

If I think we will be lower on money at Christmas, in October I need to speak with my husband and we need to get on the same page. We can decide to travel less at that point. We can decide to spend less on stuff like the tree and holiday events and decorating type of things. We can talk about if we want to get a larger gift at Christmas.

 

In October we can has that out, have time to try to save a bit in Oct/Nov if we want, and we can look at where we might spend less. We may need to decide on our priorities.

 

But how much we spend is different each time, it has to do with how much money we have a available.

 

We take savings out before it goes to the checking account, so I am working with what is in the checking account at this point. We try to economize to pay things and limit taking money from savings.

 

We would take money from savings for these things if it was very special, or if we were broke (in checking) bc of a car repair or a house repair, and we think that expense was justified to take money from savings.

 

Otherwise if the money isn't there then we have been able to do smaller things or just less expensive.

 

My husband though is often surprised how much things like special meals and making cookies and travel can cost. He thinks only of the price of gifts. That is frustrating to me but thankfully we have been married several years with the same income, now, so he is better about not thinking we have a lot of money for the gifts while he doesnt mentally allocate for other holiday expenses.

[kbutton]

I think it depends on your income, debt level(and aversion to attaining more debt) and COL. The way we look at it is to take a look at income, minus savings, minus all bills and necessary expenses- then prioritize all the wants and divy out what's left into those categories. For me the year my kids turn 16 if we happen to buy them a car their other gifts would be pretty small, token type gifts. 

 

I second something like this--it's more of a look at the whole budget, not Christmas, etc. 

 

We purposefully live well below our means. We had to when we were first married (DH was in school), and then we avoided increasing our spending unless we had to or were making room for something specific (small vacations, etc.). We also do this in order to be able to give generously (charitable giving that we feel strongly about), but not necessarily in the form of Christmas gifts. ;-) 

 

Some people would think we are being Scrooge-y for not spending more at Christmas and birthdays, but it's not in line with our financial goals for ourselves or our kids to spend much more than we do. For cars, we would have what the family needs, not buy a car specifically for a kid (probably--there could be exceptions). If the family needs a teen car, a teen car it is. If the family needs a go off to college car, then it might be kid-specific, but it might be shared if the college is a local commute or two kids go the same place.

 

As for specific guidelines, we tend to give Christmas gifts between $20-25 per person that doesn't live in our house, and we do about 3x that for people who live in the house (four of us). Birthdays might be $30-40 per person who lives here (otherwise, about $20), and we might do a small party, dinner out, or a special meal. We will flex if something that's really wanted is close to the price range, or if there is reason to be especially generous (for instance, it's not unusual for some family members to go above and beyond in volunteering labor for tasks that would otherwise cost us money). It's more of a guideline to be sure we know what to expect when we are considering our budget. We have had years where gifts are primarily homemade, quite small, or purchased with very careful sale shopping to reduce cost. Again, DH was a student at one point early on (FT--6 semesters of private tuition), and DH has had two bouts of unemployment when the kids were little. This is just a snapshot of where we are now.

 

***For reference, we live in a moderately low COL area (compared to some places, very low), and we live on one income that is probably a little less than what two adults doing public sector jobs in our area (like teacher, probation officer) could expect to make. We have a good emergency fund. We have a house payment that is a fraction of what we can afford (comfortably afford, not a reach), but it's an older house that has needed a lot of infrastructure improvement. We have zero debt except for our mortgage because we paid off large student debt already. We're in an older neighborhood (mixed retired people and young people fixing up houses that are due for a remodel by age), so I think it helps us to not feel a need to keep up with the neighbors too much. We fund retirement, etc., fund our HSA fully, etc. We also live very, very close to my husband's workplace, though we used to have exorbitant commuting costs.

 

HTH I am a bit hesitant to be too specific (there are always people in extreme circumstances on side or the other of us), but it sounds like you'd like specifics. 

 

Honestly, spend time with families of various means and priorities, and if they are open about their circumstances, you might find that helps you set your own priorities and see what concerns you might need to address that you hadn't considered realistic for your own circumstances and/or just thought were "unusual." Sometimes people have the means (theoretically) to be stable, but something is killing their budget--healthcare expenses, unforeseen catastrophes that keep coming, long-term underemployment or job loss, etc. It can be super clarifying to hear these stories! 

[DawnM]

We used to be more frugal and we had some really lean years in there, but then DH got a promotion and raise and our car was paid off, so we could get a little more.  

 

This year I am working, so we have told them it is a little higher.  We still don't go hog wild.

 

But, for example, in the past, we would have a few friends over, grill some burgers, and the kids would hang out.  This year, my middle son was very excited when I told him we could take him and some friends out for dinner and to see Rough One.  We paid.  And he still got his usual amount for presents.

 

So, it just depends.  Dh grew up with less and I grew up with more, but a lot of that was because I was an only child and he was one of 5.