Here's a tip for budgeting for Christmas or any other holiday. I do this every year and it works out great. All grocery stores have gift cards, I buy them through out the year and than at Christmas, I have all my grocery money all saved up.
By Alvina from Consort, Alberta
I love it! I have never seen this addressed. We have all talked about buying the gifts, but what about the food?!
I watch the sales, and stock up on the little things, freeze the veggie that I can when they are in season, make all my pies ahead So I really only have to shop for the meat part of the meal for me this is a way to save money In the end my meal is ready & still home made, veggie are from the fresh farmers maket. and I can enjoy my family.
I think that what Alvina was saying, forgive me if incorrect, is that she buys grocery gift cards throughout the year, so when it is time for Christmas, she has money to spend on gifts at the time instead of groceries. She uses the grocery gift cards to purchase her own food. Is this correct? Either way, I think it's a great idea. And food/gas gift cards are great ideas for college students!
You need to learn how to budget yourself properly year round and that includes making allowances in your budget for holidays, emergencies, etc.
Your plan of buying gift cards throughout the year is nothing more than you loaning the food stores your money INTEREST FREE for a year. How smart is that?
If you're worried about affording your holiday groceries; you are in NO position to be handing out interest free loans. Also, what happens if you lose a card or it gets damaged (burned, etc) in some way? Then you just gave the food stores ALL the money, interest free.
If you do not have the ability to make a sound budget yourself and don't know who can or are too embarrassed to ask for help, you should at least be able to open a small holiday or savings account and make regular, year round deposits for ALL your holiday needs.
That way at least the bank is paying you interest and your money is 100% secure. It's a heck of a lot smarter than handing out interest free loans that you could easily lose to boot.
The ONLY time it is at all intelligent to buy gift cards for your own use is when the store gives you an additional 10% or more above what you pay for the card AND you will use the card with a few weeks time. That is also providing that you normally shop in that store and it has the best selection at the best prices.
Even if you still have problems budgeting yourself properly; you could make your regular bank deposits into a savings or holiday account and purchase one or two of those 10%+ gift cards right before the holidays.
That way you just EARNED around 12-13% as opposed to handing out interest free loans year round! The money also helps BUILD YOUR CREDIT and is available for true emergencies instead of you panicking, borrowing on your credit cards, etc.
Even if you only deposited $10 a week X 52 weeks you'd have $520. If you saved and budgeted the smart way; you'd have an EXTRA $67.60 to spend! That's nothing to sneeze at.
You also wouldn't have 50 gift cards to lug around either.
Alvina was saying she buys the gift cards all year, but what reality check is saying is that by buying those cards instead of putting them in the bank, you lose all of the interest you could have earned by keeping it in the bank. Also, it is essentially an interest free loan, because if it wasn't, the value of your gift card would INCREASE; in fact, many gift cards have policies that state that if there is no activity on the card for usually 6-12 months, they will start DEDUCTING value from it! Be smart! Start a savings account!
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