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I am always asked how I handle gifts. I decided to take this opportunity to show you how I handle those budget busters...birthdays, special occasions, and Christmas!

Step 1:
First off, these are not unexpected expenses, so I plan for them. I have Gifts as a line item in my budget. Also, I have a line item for Christmas Savings. I actually keep the Christmas savings in two different places. Most of it goes into a savings account that holds the money for my short term savings (such as Christmas and Car Insurance/Tags etc.) But then a smaller amount gets put into an envelop in my wallet for times when I find good deals while I am out shopping.

Step 2:
Make a List. Check it Twice. Write down all the people you buy birthday/anniversary/other gifts for each year. Make another list for your Christmas shopping needs. Budget for each person's gift. Be realistic here. You don't want to under estimate and then not have the cash in your budget. Don't forget Mother's and Father's Day. Don't forget Easter/Valentine's Day/etc if you tend to get these presents for people. Add the amounts up and divide by 12. You should be saving MORE than this amount each month in your Gift/Christmas savings. Why more? Because we haven't even added in those more "unexpected" gifts. Such as baby showers, weddings, bat mitzvah, and if you have children the dreaded kid birthday parties. (We had two such parties on Saturday.) You can estimate. You can plan ahead. But there still needs to be some cushion in your Gifts budget.

Step 3:
Designate an area in your house for gifts. Whether it be a Gift Closet, Gift Shelf, Gift Area of Your Attic, or a Under Your Bed Gift Area. Designate it and use it to stash all the gifts that you are pre-buying. This is important. You want to be able to find the gifts you have bought and not have to run out and buy another gift at the last minute.

Step 4:
You are now armed. You have money. You have a list. Start shopping NOW. You heard me. Shop NOW. Why? Because it will save you time, money, and stress. If you find a great sale on something your mother would love? Buy it. Make sure you pay attention to your budget. Do not find a $200 purse on sale for $50 for your mom when the gift budget for her is $25. (Unless you can pull the $$ away for another gift. Just make sure you are not spending above your budget without a plan.)

Now, you may be skeptical of this way of shopping. You may be saying to me. "I don't want to get cheap gifts for my friends and family." "I don't want them to know I am skimping on their gift." "Cheap gifts will look ugly or will be shoddy." These statements are just not true. You are shopping smart and most importantly within your means. Let me show you an example.

Right now at JCPenney, you can get $10 off of a $10 purchase. To get the $10 off use the promo code TEN4YOU . There are lots of great things on clearance or at the outlet. You do have to pay shipping, so you won't get anything for free but tons of things will work out to be good deals.

I searched with several people in mind. I started out in the toys and didn't find much there that I was interested in. Then I checked the housewares. Finally, I looked at the jewelry. There are several people on my lists that would love jewelry, so I looked at the items thinking of them. I found a necklace and a bracelet that I thought would be perfect for one or two on my list. The necklace was marked down to $9.99 from $22. The bracelet was marked down to $6.99 from $18. This present is worth $40 regular retail, but with the sale and the coupon I paid less than $14 for both. These will make a great birthday present for a friend or for my sister-in-law. (Both of their birthdays are in August.)

Step 5:
Use the cash back websites. These days you can have your choice of different cash back sites. Ebates and Cashbaq are two of them. I recommend you choosing one to be your main one and then using another as a back up for stores that aren't on your main one. I use Ebates. I really like them. I have never had a problem getting my money. I have been using them for over 8 months and have been paid twice. My total cash back is almost $40 just for clicking through using the ebates site. There are minimum pay outs so check them to see which cash back site you want to use as your main one.

There are a variety of different way you can handle the money you get back. You can just add that money right back into your gift budget. OR You can have a savings envelop for that free money to save for a specific item for the family. OR You can use it to do something bigger like paying down your debt. OR You could put give it to your church or a special charity that is close to your heart. Whatever you do with it, it is always better to specify a place before it comes or you will find that it disappears before your eyes.

* Please note that the links to the Ebates and Cashbaq sites are referral links. If you sign up using these links, I will be given a referral credit.


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