The English language borrowed the word mortgage from French, in which it literally means “death pledge,” alluding to the long-term nature of such a commitment. Not to mention if you get in over your head, your home loan will surely feel like death.
A mortgage is also a place where you can royally mess up your finances for the long haul. You can clip coupons, shop at ALDI, do a shopping ban, and drive an old car, but if you over-do it on the house, it’s hard to ever get ahead. This is one of the big areas to get right as it’s likely going to be your top living expense.
Fortunately there is a way to buy a home without killing your financial future. It’s all about going in financially prepared. Use the checklist to determine if you’re ready to take a mortgage, rather than a death pledge.
I know how much money I spent last year. You must know where your money is going, or you don’t know whether you can afford a house. If you base mortgage affordability solely off what you pay in rent, you may be unprepared for the extra costs of home maintenance and repairs and increased utilities.
I’ve recorded a budget for this year. You must know where you want your money to go in order to save a down payment, cover closing costs, and be sure you know what you can afford to buy.
I have no credit card debt. Ideally, you’d want to go into buying a home with no debt at all, since a mortgage is the largest debt most people will take on. At the very least, you wouldn’t want to be paying high interest on credit card debt. That’s a financial emergency you must get out of before you start saving for a house down payment or getting into another loan commitment.
What about car loans? It doesn’t make much sense to keep an auto loan around (and paying interest on a rapidly depreciating liability) while trying to purchase a home, either. It would be wise to pay it off ASAP, thus minimizing the interest. After that start saving for the home.
What about student loans? In a perfect scenario, you’d want to have student loan debt out of the way as well. It’s a great way to pretend to be a student until you pay off student debt. Especially if you have a mortgage-size student debt, why not wait? You don’t need two death pledges!
I have six month’s living expenses saved. That’s nice you’ve saved $20,000. But what is it for? Emergencies such as job loss or illness? A down payment? Closing costs? Incidentals and furnishings? You need to separate these categories, at least mentally. Write it all down, total it up, and save that much, not a random round number that sounds good. What if you buy your house and unexpectedly get laid off? Having a cushion to fall back on is more than ever once you have the major financial commitment of a mortgage.
I have determined a budget for the price of my home, and the mortgage, taxes, and insurance will not exceed 25% of my monthly take-home pay. As mentioned before, please base your budget on the lowest income you expect to earn while paying off that house. If you’d like on parent to stay home with future kids, base it off of one income rather than two. You can always save, invest, or pay down debt with the other spouses’ pay while you’re still a dual income household.
I have saved a 20% down payment. Again, this is in addition to my emergency fund (6 months’ expenses). Putting 20% down will:
- Avoid PMI which is money down the drain for a homeowner with insufficient equity to secure the property.
- Ensure some equity when you need/want to sell. Early mortgage payments are almost entirely interest meaning you don’t gain much equity in the first few years.
- Make your mortgage smaller and monthly payments more affordable.
- Indicate you have the financial discipline to handle a mortgage.
I’ve saved an additional 5-7% for closing costs, inspections, appraisal, and setting up the home. For a $100,000 loan, you’ll spend around $5,000 or more just on the home-buying process. Additionally, you may need a lawnmower, furniture, appliances, and other tools to set up your new pad. The cost can add up even if you purchase secondhand. If you buy below your budget, the difference from your down payment savings can cover this. If you buy at the top of your budget you’ll need some extra cash on hand.
I am saving for retirement. At the very minimum you should be earning your employer 401k match. If not you’re essentially allowing your employer to keep part of your paycheck. But investing 6% is only going to inch you toward solid retirement savings. Dave Ramsey recommends investing 15% to build a solid nest egg for the future. Don’t ignore your future in order to purchase a home.
The difference between a death pledge and a mortgage lies in your financial readiness for home ownership. If you are otherwise debt-free, have sufficient savings, and live in area where home prices are reasonable, home ownership can be a solid choice. Just don’t sacrifice other goals like retirement, staying home with kids, or paying off other debt to do so. It’s worth the wait to avoid the death pledge.
Homeowners, what would you add to this list? What do you wish you’d done to prepare for buying a home?
The very act of shopping makes me feel like a sucker. Here I am at the mercy of a retailer, a helpless consumer who needs to buy things I can’t or won’t make. At the same time, I’m really glad I don’t have to spend my days shearing sheep, carding wool, spinning yarn, weaving cloth, and sewing clothing. That would suck. I hate sewing on buttons.
If we need something out of the ordinary, we wait to see if we can make do without it or fix what we already have. Next, we exhaust options like freebies, gifts cards, hand-me-downs, Craigslist, garage sales, or eBay (depending on the item).
But if I have to go the typical retail route, I avoid paying full price if at all possible. One strategy that has saved me a lot is shopping in the wrong department. This works particularly well for certain sizes of clothing and shoes, but also for some specialty items. Just think about it: you are in the clothing section, held captive to these awful prices because you need a bathing suit.
Here are some examples of discount finds I’ve made by shopping the wrong section.
- Kids XL bathing suit bottoms instead of women’s Small: $8 instead of $22. Same brand.
- Kids tennis shoes: $20 instead of $60. Same brand.
- Juniors undergarments instead of women’s: one quarter of the price. Same brand.
- Toddler clothes instead of little boys (for sizes 4-5T): $4 instead of $8. Same brand.
- Boys undershirts instead of girls’ camisoles: $1.50 each instead of $2.50 each. Same brand.
- Sunhat in gardening instead of fashion accessories: $10 instead of $20. Same brand.
- Baby Advil & sunscreen: in medication/personal care instead of baby: half-price generics available.
- Travel mugs: in dishes instead of travel or lunch box section: $8 instead of $20.
- Kids-size fishing pole in fishing section vs. one in toy aisle : $8 instead of $16 & way more durable.
- Pretty blank cards in stationary, instead of individual greeting cards: a box of 20 or even 50 can cost the same as a single greeting card.
A few tips:
- Look outside of specialty areas. If you are in a specialty section, you might pay more for the same item. If it’s an item only sold there, you’re out of luck. But if you can think of another area where it might fit, check it out. It might be half the price.
- I realize not everyone can fit children’s clothes, but if you or your children can span two departments, the smaller size section will usually be cheaper. Toddlers overlaps two sizes with kids. Babies overlap one size with toddlers. Kids’ shoes overlaps several sizes with adults’.
- Steer clear of end caps and seasonal displays. There are often less expensive, sometimes better quality options in the larger departments.
- When shopping secondhand, small women’s items are sometimes misplaced in the girls’ section. I don’t go digging through the entire thrift store aisle of kids’ clothes, but sometimes just walking by will notice an item that looks too grown up. Scored my last pair of shorts this way (J. Crew, $5), as well as a couple sweaters. Maybe this happens with boys’ clothing too?
If this sounds time-consuming, it isn’t. Glance through two departments and compare prices. If you live simply, avoid clutter, automate errands, and don’t shop as a hobby, these expeditions for non-routine items should be few and far between.
I hate feeling like consumer sucker. Don’t you? Brainstorming alternatives is second-nature to those pretending to be poor. It’s not extra effort. It’s only natural. We enjoy it. Seeking creative alternatives and solutions is fun!
Have you ever found a great deal by shopping in the “wrong” department? Tell us about it! What are your other thrifty shopping tips?
“Contact your bank for pre-approval.”
“Determine your budget.”
“Location, location, location!”
“Make a wish list of features you want or need.”
“Start browsing online to get an idea of what you like.”
All of this advice and more is cited as step one for prospective homebuyers. But before you start shopping for a home in earnest, there is one thing you absolutely must do: have an annual budget.
I’m not talking about a stab in the dark at what you think you spend in a year. I mean cold, hard, well-crunched numbers based data, i.e. your spending from the previous year or more.
If you’re working toward home ownership, I’m assuming you’ve already started saving a 20% down payment. More here on why that’s critical and you’re foolish to buy a house without one. Plus, practicing the discipline required to save up that big of a chunk of change is a good sign that you’re financially responsible enough to take a death pledge (the literal translation of mortgage.)
A fortunate few receive all or part of a down payment as a gift or from an inheritance. If this is the case—congrats! What a wonderful gift. But this makes it all the more important that you carefully inspect your budget and confidently know what you can afford. I’ve seen people buy too much house this way and it’s not a pretty sight.
Why am I so dully peeling you away from your Zillow search so you can stare at bank statements and spreadsheets? Because I love you.
- How the heck can you set a home price budget without knowing what type of monthly payment you can afford?
- How can you determine what you can afford without knowing how much you spend now?
I realize that people compare mortgage payments to their current rent prices, and that makes sense to some extent, but you also must account for the hidden costs like closing fees, property taxes, homeowners’ insurance, utilities, repairs and maintenance, furnishing, and moving. Check out Millennial Firecracker’s excellent calculations on the true cost of home ownership. This stuff definitely adds up over time, making home appreciation less profitable than you might think. Plus, you can’t walk away from a 15- or 30-year commitment easily as you can at the end of a lease.
And don’t even consider your monthly budget, not until you account for all those annual or biannual expenses like vacations, Christmas, gifts, other holidays, and the like. Once you’ve determined those expenses, either spread them out evenly over your monthly expenses (total ‘em up & divide by 12), or subtract them from your take-home pay and pretend that money isn’t even yours. Then put it in a separate savings account.
Let me also highly recommend that you set your budget based on one income, even if you are a dual income house, if you ever conceivably might have kids. Even if you both plan to keep working. Even if you don’t think you’ll want kids. You simply do not know what the future may hold, and how having a child could change your plans.
Aside from having kids, you also never know when one partner could become unemployed. So pretty please do yourself a huge favor and buy a place you can afford on one person’s income. If you both keep killing it at work, you can pay that sucker off fast and be done with the death pledge.
How Much House?
The age of the starter home seems to be over. According to Zillow’s research on Millennial homebuyers, “millennials tend to buy larger homes with more square footage and a higher price tag. The median millennial home purchase is $217,000, which is just 11 percent less than Generation X home purchases and slightly costlier compared to Baby Boomer homes.” I don’t assign moral values to home size or price, but it’s curious that the generation with sometimes mortgage-sized student debt are also biting off big home loans. Certainly knowing your monthly budget will help you avoid getting in over your head.
With your budget in mind, determine how much you’d like to spend on a mortgage, including principle, interest, taxes, and insurance (PITI). Don’t forget to estimate 1-3% annually of the home’s value for maintenance—believe me, you’ll need it. Houses are made of wood, drywall, paint, and lots of other materials that wear out over time. They are also full of expensive appliances which are ticking time bombs for a financial emergency, if you’re not prepared.
Now that you’ve got a real monthly number that’s based on data (i.e. your past spending), go play with some online mortgage calculators. Zillow reports that two-thirds of millennials use mortgage and affordability calculators while considering home ownership. Friends, let’s make that number 100%.
And don’t be fooled by incomplete calculations. Watch out for those real estate web site calculators that report the monthly price for that gorgeous turnkey house is less than you’re paying in rent. They’re often assuming a 30 year term with 20% down, and may not be counting hundreds of dollars per month for property taxes.
While you’re playing with those calculators, select a 15 year term, which will NOT be the default. I know there’s a raging debate over whether or not to take a 30 year and invest the difference, earning a higher interest rate than you’re paying. But let’s just be real. Most normal people are NOT going to be putting the difference into the stock market. If you are really going to invest like crazy, I trust you to navigate this decision. For everyone else, I highly recommend the 15-year. Otherwise, the interest you pay will likely devour the appreciation. It basically works out to a rental agreement (with the bank), but you’re also allowed to hemorrhage money on maintenance and remodeling.
Conventional wisdom says not to spend more than 25% of your income on your mortgage. I concur. And let’s be conservative and say 25% of your take-home pay, and include all of PITI when calculating your housing costs. Naturally, you don’t have to spend this much, but don’t surpass it.
And for the love of God, do not pay PMI. Wait and save 20%. Side hustle, cut spending, put all windfalls into your down payment savings, and wait.
Remember, I’m telling all these horrible, awful things because I don’t want to see you strapped by your mortgage, let alone upside down in it. Even if you’re making payments easily, you don’t want it to prevent you from traveling, being generous, or having the financial flexibility to work less or retire someday. Don’t marry your mortgage. You’ll thank me later. 🙂
Homeowners, what advice do you have for prospective home-buyers? How did you determine your budget?
What’s one value that should absolutely make its way into your values-based spending plan? Your marriage (if you’re married, of course)! Let’s face it: the health of your marriage is very important, but it’s also easy to ignore.
People may avoid spending on these areas because they perceive that it will be very expensive. As with anything, you could use the label “value” to justify lots of ridiculous spending. No one needs to spend hundreds of dollars a month in order to prioritize marriage.
It’s true you can’t buy love, but don’t cheap out on your marriage. That’s like telling your spouse, “Honey, I love money more than I love you.”
Here are 5 ways we spend on our marriage, and three price-points that should satisfy anyone
1. An annual getaway.
Before having kids, we jaunted around the world when we wanted to and could hang out alone at home. Now we’re in full-time parenting mode and quality time has to be planned ahead–and away. So we escape alone together for a night or two once a year. If you can pull it off twice a year, even better!
We are very grateful to my mom for babysitting for the weekend of our 11th anniversary this year. Getting an overnight sitter isn’t the easiest task for some, but it’s worth the effort if at all possible. More on that below.
The $$$$ way: Dinner at the city’s fanciest steakhouse, tickets to the best show in town, and drinks at a posh bar afterward. Pay full-price for nice hotel. (Seriously, this is not a terrible way to spend your money once a year.)
The $$ way: Book free hotel with rewards points. Our weekend away included free entertainment like the beautiful city library and art museum (I’m a hopeless nerd). We spent on our favorite ethnic foods and incidentals like parking. We packed snacks and drinks for the hotel.
The broke way: Drop them off at sitters, head home, promise not to clean or fix anything, explore free entertainment in your town, prepare meals together, or inexpensive local dining.
2. Monthly dates.
Getting outside your home and spending time together really makes a difference when you’re in the thick of parenting or just the busyness of life. It’s easy to be tempted to clean up, work on projects, or veg out in front of the TV. Netflix and take-out is a great way to relax, but in my experience, not always the best way to connect. Especially when dinner conversation consists of talking about Star Wars with a five-year-old. Again.
The $$$$ way: Fancy dinner and a movie (or other pricey entertainment) every time.
The $$ way: Moderate dinner, split an entrée, go to relatively inexpensive place like Chipotle or whatever you like. Neil maintains that our best dates have been at Taco Bell. We also like hiking, biking, or visiting parks or thrift stores. Sharing a common hobby or experience together is a great relationship- builder. Dating is about connection, not consumption.
The broke way: Get takeout during lunch specials, and reheat after kids the kids are in bed. Turn off the TV, hide your phones, light a candle, pour a glass of box wine, and try to stay awake. Or go out for ice cream, coffee, or a walk.
#1 and #2 may require another expense: babysitters. We realize not everyone is as fortunate as we are in this department. But there are plenty of options for finding a sitter, and worth the effort to find one. A good babysitter is an invaluable asset for your family.
If you don’t know anyone who can watch your kids, I’d suggest trying to forge a relationship with someone who can. Think neighbors, friends, local high school or college students, people from church, or resources like Care.com. And if the cost is a concern, I’d recommend looking for other areas to cut back in to allow for some childcare spending.
The $$ way: We hire a sitter for our weekly home church, and events or dates when our parents or friends aren’t available.
The broke way: We also swap babysitting with other families, and ask friends and family members.
I’m not a made-up kind of girl, but I do occasionally purchase new clothing or makeup to look nice for my husband. This is an area where you need to “know thyself.” If you live in yoga pants and haven’t showered in three days (moms represent!), maybe you could allocate $20 for sprucing up for your next outing. If you have a history of over-spending in this area, mix it up with what you already have.
In short, I try not to look like complete hell all the time, just to save money.
The $$$$ way: Buy a new outfit for every event. (NEVER!)
The $$ way: Occasional thrift store or clearance chic for a special occasion, or update “date night shirt”.
The broke way: Borrow clothes from a same-size friend or family member. Or ask a talented friend to do your make-up or hair for your next date.
Some people don’t exchange gifts with their spouse because they are frugal. We choose to buy gifts for one another, because we are frugal. We often delay purchases and ask for the item as a gift. Or surprise each other with something we noticed the other could use. After 14 years together, we are way past any danger of trying to buy each other’s love. But gifts can be a thoughtful way to express love, and some people feel particularly loved this way. If your spouse is one of them, please give them gifts!
The $$$$ way: Pricey gifts for Valentine’s Day, Mother’s Day, Father’s Day, Anniversary, MLK Day (j/k).
The $$ way: Modest gifts for Christmas & birthdays.
The broke way: Skip the gifts to save money. Craft them something, make a special dinner, or write a heartfelt card.
I’d be remiss if I didn’t mention Neil went all out for me this Christmas. I’m typing this on a new laptop! In addition to its killer specs, it has amazing features such as being able to close the screen, having all the keys connected to the keyboard, and not crashing if you don’t put it in sleep mode. Thanks Neil!
How do you spend on your significant other? Where do you tend to fall on the broke-to-$$$$ spectrum?
Everyone says home ownership is fraught with hidden costs, but what are they? And how can you combat them? Today we’ll explore some ways to save when it comes to buying and maintaining a home, and minimizing utility costs.
I can’t recommend enough that you save a 20% down payment before purchasing a home. Sure, you probably know someone who bought with nothing down and lived to tell about it. But there are many good reasons to begin home ownership with some equity.
First, putting 20% down is the best way to avoid paying PMI, which is a form of insurance against your loan. In other words, you pay money to the bank every month that does not build any type of equity. Secondly, you could easily end up upside-down in your loan, owing more than you own, should your home value dip and you want or need to sell. While it may not seem likely, plenty of homeowners have found themselves in this unfortunate situation. Lastly, you’ll decrease your loan amount, and therefore your monthly payments and the amount of interest you’ll pay overall.
A home inspection is another important step before purchasing. It may be tempting to skip the inspection since they run $300-400 or more, depending on your location. But an inspectors’ knowledge can save you a lot of trouble and money over time. We passed on buying one house after the inspection revealed foundation problems. Many issues can be fixed, but it’s nice to have that information up front so you can ask the seller to make the repairs or lower the purchase price. It’s hard to determine a good price for a home without the inspection results.
Before purchasing, shop around for the best interest rate. Just be sure to get a fixed rate. If rates drop after your home purchase, crunch the numbers for refinancing. While finance fees will lengthen the time till you recoup the upfront expense, a lower interest rate over the long haul could be very beneficial. We refinanced to a lower rate in 2012 with a no-fee refinance for instant savings.
Choosing a good neighborhood could not only improve your home value over time, but also reduce the cost of home owner’s insurance.
Researching insurance alternatives can help reduce this cost. For example, protecting your home with a wireless security system could save you nearly $700 in insurance fees over the course of a year.
Another indirect type of “insurance” is making sure your home’s electrical is updated to avoid property damage due to fire. Just last week, Neil’s cousin lost his home to a fire. Fortunately no one was harmed, but of course it if very difficult to start over after losing your home and belongings.
Updating insulation can make a big difference in energy bills. It’s very affordable to rent a machine and DIY installation of lose cellulose insulation to keep heat from escaping your home. Sealing leaks with caulk or weatherstripping is another low-cost way to reduce heating and cooling costs, while also making your home less drafty and more comfortable. Unlike updating windows, updating insulation, caulking and weatherstripping all have a relatively short ROI time. For more on home energy savings see our utility series: Pretend to Be Warm, The Electric Slide, Hippies, Hustlers, and Vampires, and Who Ya Gonna Call About Utility Bills?
We’ve also replaced our shower heads with low-flow shower heads that aerate water so it uses less water without feeling like you’re showering under a tiny trickle. Efficient shower heads are inexpensive and easy to install, making them a great way for homeowners to lower their water and energy bills.
Keeping your refrigerator temperature at 38-40 will keep food safe while costing less than colder refrigeration settings. The refrigerator and other vents may be the last thing on your cleaning list, but it does help them run more efficiently. And softening your water can also lesson energy costs for all appliances that rely on water to run.
Stay tuned for more on home buying within the next month!
How do you save on home ownership and energy costs?
Today, I’m pleased to feature a guest post on a topic I know little about, but is very important for many: prescription costs. We are blessed to thus far be a very healthy family with no regular prescription costs. However, I know many people face tough decisions about how to pay for medication, and finding the most cost effective source is critical for their physical and financial health.
By Fabio Caparelli
On top of paying for rent/mortgage, transportation, food, and utilities, the average American also has to factor in spending an average of $1,370 dollars per year on prescription drug costs.
The high cost of prescriptions have been a source of anxiety for Americans for years, and with the forthcoming changes to the health care system and drug price inflation, there seems to be no relief on the horizon. Drug prices rose an average of nearly 10% over the 12 month period ending in May of 2016. What is the average American to do?
Since people can’t just stop buying the medicine they need to live a healthy and happy life, they are stuck with the burden of losing more of their income to pharmacy spending.
We asked pharmacists, nurses, and doctors to share their top tips to save and found the following five tips to help ease your pharmaceutical anxiety.
1) Choose Generic
If you’ve ever struggled with the decision of buying name brand vs an unknown store brand and gone with the name brand, you’re not alone. How could something “the same” cost half, or more than half the price and still be good?
Generic drugs are meticulously tested, and work as well as brand names. There’s a simple reason why generics cost so much less than their branded counterparts. When creating a drug, huge pharmaceutical companies cover the costs of research, development and marketing while taking on the risk that the drug may not get approval from the FDA. Once a drug gets approved, these manufacturers are rewarded with a patent allowing them the exclusive right to produce and sell the drug with the power to set their own price.
But after a patent expires, the drug formulation becomes available for other manufacturers to create and market their own versions. The increase in competition and lower costs mean that the new generics entering the market are just as effective but at a much better price. If your doctor prescribes you a brand-name drug, always remember to ask if there are generics available.
2) Compare Alternatives
For many diseases and symptoms, there’s more than one option for relief. For example, diabetes patients have a number of alternative insulin treatments to choose from. Similarly, arthritis sufferers have many prescription options to manage their pain. When choosing a treatment, keep in mind there may be many alternatives at a much lower cost. If your doctor prescribes you an expensive branded prescription, ask if there are alternative drugs that work just as well. Many physicians have no idea how much your insurance does or doesn’t cover, and would be more than happy to help you find an effective drug you can afford.
It can also help to ask your local pharmacist. Walmart, for example, offers 90-day prescriptions for $23 lower per member per year. Many pharmacies also provide lower cash prices for patients without insurance.
3) Patient Assistance Programs
It’s an unfortunate reality that many Americans are choosing to forego prescriptions because they can no longer afford them. For anyone needing to make the difficult choice between medicine and other basic needs, we recommend seeking out patient assistance programs offered by the state and nonprofit groups. Many states offer programs to cover large portions of bills, which can include copays. In addition, there are non-profits like PPA and RxAssist which help low-income patients find programs for free or low-cost medications.
4) Manufacturer Rebates
Another helpful tip is to search for manufacturer rebates or coupons for specific drugs. These are savings programs created directly by the drug manufacturer and can be worth hundreds in discounts. For example, Epipen has a $0 copay program to help offset out of pocket costs. A quick google search can turn up hundreds of similar programs for all kinds of brands and prescriptions. You’ll often have the best luck with new drugs where manufacturers are willing to lower prices to encourage new patient sales. The state sponsored Medicaid Drug Rebate Program can also help reduce outpatient costs.
5) Shop Around
As with most goods, prescriptions vary in price from store to store and pharmacy to pharmacy. Prices for a single prescription can differ widely between Walgreens to CVS and Walmart. You don’t have to accept the first price you receive at your local counter. To save time and gas, we suggest using web tools and apps that can help you price check between stores. For example, SearchRx lets users compare prices for prescriptions and find the lowest priced pharmacy. By looking up a prescription and zip code, you get a list of prices at your local pharmacies. Plus, if your copay is high or you’re between insurance, you can email, text or print a coupon to help you save more.
In conclusion, get the most from your trips to the pharmacy by doing your research and shopping around. If price is a concern, do tell your physician as most doctors are happy to work with you to find affordable treatment. Seek generics if they are available or ask if there are alternative medications. Plus, be on the lookout for doctor samples, manufacturer rebates and state-run programs that help bring down out of pocket costs. To help you do all this, you can check out apps like SearchRx that make it quick and easy to search for the best prescription prices and coupons. Whether you’re insured or not, we hope these tips come in handy for your next doctor’s visit!
How do you save on prescriptions? Have you ever used SearchRx?
This post contains affiliate links.
I love Christmas, but I’m also afraid of it.
I’m afraid our kids will feel entitled by all the gifts they receive. I’m afraid they will lose sight of the true meaning of Jesus’ birth. I fear it will reinforce their tendency to believe life’s all about them. I’m concerned they’ll turn into greedy over-consumers.
We’re committed to not over-doing the gifts, but we do enjoy making Christmas morning magical for our kids. Surely that will look different as they grow up, but at their ages, this doesn’t cost a lot.
We’re grateful to have relatives who are generous but reasonable (not over-gifters). But even one or two reasonable presents from a number of relatives, plus “Santa,” adds up to a fair amount of stuff. (I do see the toys as a resource to survive the long winter months ahead!)
I’m also tempted to fill the precious days off of school and work with fun holiday activities. There are more special events than we can possibly attend, plus simple pleasures like sledding, baking cookies, and watching Christmas movies. I want to be sure that helping others is prioritized in the midst of seasonal entertainment, and that will mean passing on some fun activities, even if they’re free.
We want to celebrate Christmas with special treats, gifts, and family activities. We also want our kids to learn generosity, empathy, and service. Here’s how we’re trying to combat the greedy, entitled, all-about-me mentality that kids (and all of us, if we’re honest) are naturally prone to.
“It is better to give than to receive.” (Acts 20:35)
We first introduced this verse to my son when he was three. He replied, “That’s not true,” and refused to memorize it. We didn’t force the issue. Two years later he’s voluntarily quoting it (sometimes to his sister) and trying to understand it. He asked if getting presents on Christmas morning is bad. I explained that both giving and receiving are good and fun, but giving is special because it helps others and can bring them happiness.
To involve our kids in giving, I encourage them to buy or make something for each other and their dad. With their closest friends they might swap toys they already have or chip in toward a small gift.
“If you help the poor, you are lending to the Lord—and he will repay you!” (Proverbs 19:17)
Our kids live a strange existence in which all their needs are abundantly met. Without scaring them, we try to explain that not everyone lives this way. Some kids don’t get toys for Christmas; others don’t have enough food or even clean water. (Compassion International’s Explorer magazine was helpful for this.) We can’t solve all those problems, but we can share some of what we have with others. We use Dave Ramsey’s suggestion for give, save, and spend jars, and set a deadline this week for choosing a charitable destination for their money.
This year I also took my son to help out with a “Christmas with Dignity” store through a local ministry in a low-income neighborhood that’s home to many refugee families. The children work throughout the year to earn digital “dollars” by attending after school tutoring, completing homework, and participating in programs. With these funds they can shop at a Christmas store featuring a large variety of new, donated items. We volunteered with the set-up, which involved carrying lots of items down lots of stairs.
The store featured toys, but also many practical household items ranging from coffee makers to diapers to toilet paper. Friends who volunteer at the store noted how many of these items the kids choose over the toys.
Once we got through the explanations and he got to carry stuff around he got increasingly excited. He talked about the kids choosing from the different items. He was also bragging about how strong his muscles were getting from all the hard work. Maybe he still thinks it’s all about him (& his muscles), but I was grateful he had a chance to help others in some way. He left in an exceptionally good mood because he got to experience firsthand the joy of giving rather than receiving.
“Pure and genuine religion in the sight of God the Father means caring for orphans and widows in their distress…”(James 1:27)
A friend suggested that the kids from our church visit nursing home residents and hand out cookies. Yesterday we did just that. Yes, visiting people you don’t know feels awkward. And children aged three to eight are hardly stellar conversationalists. But I think the cookies, smiles, and a few rounds of “Jingle Bells” went a long way toward brightening the residents’ day, and showing our kids that they’re not the center of universe.
The book The Me, Me, Me Epidemic includes some more great ideas for involved kids in both planned and random acts of service.
I don’t share these experiences because I have it all figured out, but because I don’t. My kids are more entitled and self-centered than I want them to be. So am I. The path to financial success is fraught with danger for the soul, unless we take care to share, help the poor, and care for those often forgotten by society.
I’d love to hear more ideas for promoting a giving attitude in kids at Christmas.What are some practical ways you’ve tried to teach generosity and service, especially during the holidays? How have you seen your children’s attitude toward giving change over the years? Or perhaps you remember how your own perspective changed?
Still Christmas shopping? Me, too. Once you’ve sorted out your approach to Christmas gifting, it’s time to tackle the shopping list. Here are some ideas for the frugal people on your list, or those you think could stand to learn a little thrift. These mostly practical gifts will strike the thrifty as luxury items because they make either life, or saving money, so much easier.
For the new parent:
temporal lobe thermometer: This thermometer is so quick & to use, my kids like getting their temperature taken. It also seems more sensitive than traditional ones.
miracle swaddler: This blanket gently helps keep those arms swaddled much longer than other styles.
white noise: A small, portable white noise machine is ideal for travel, even if it’s just to put your baby down to sleep at a friend or grandparent’s house. It’s also great for hotels and camping.
rechargeable batteries: Battery-operated toys are bound to enter your house. This set will save you loads in the long run.
For the handy man: (suggestions from Neil)
drive socket set: I’ve been preaching this to anyone who will listen lately, once you go 1/2″ for automotive work, you won’t go back. If you or a loved one will be doing any work on their car in the near future, I cannot recommend highly enough to get 1/2″ drive sockets. Most people use 3/8″ drive, and it’s nothing but frustration and busted knuckles.
wire strippers: These auto-stippers are a tool you didn’t know you needed until you use one. They perfectly strip wire of any common size without breaking the conductor. Much better and faster than using scissors or traditional strippers.
loupe – LED illuminated: These loupes are really fun. Easy to use and show the kids stuff close up. Bugs, carpet, newspaper, wood, all fun when viewed through a loupe.
wood-splitting ax: This Fiskars Axe is the only way I am able to split my own firewood. I am not a giant lumberjack; I cannot wield a 8-10# maul for a few hours at a time. This thing is light, swift, and well designed. It makes splitting wood fun.
drill bit set: Get these if you own a 1/4″ drive impact driver. Makes it into a small electric impact gun. Very useful and fast for backing out bolts/ nuts.
For the home chef:
pressure cooker: I never knew how amazing pressure cookers are until I received an electric one as a gift. It has saved dinner on more than one occasion when I forgot to thaw meat, or got home later than expected. It can cook bone-in frozen chicken pieces in less than half an hour. It also makes meat way more tender than other cooking methods.
instant pot: I don’t have one of these, but I’ve heard it’s the pot to end all pots. It’s a programmable pressure cooker, slow cooker, rice cooker, yogurt maker…you name it, it can do it. It’s priced very reasonably compared to purchasing one or two of these other devices. If I didn’t already own a pressure cooker and slow cooker, this would be on my wish list.
good knife: A good knife makes cooking sooo much more enjoyable–and safer.
For the kids:
Craft supplies or Play-doh: Replenish crafty consumables.
Zoo or children’s museum membership, sports class, Highlights magazine subscription: keep them entertained throughout the year with fun activities or subscriptions.
For the brown bagger: These glass food storage containers are healthier than heating in plastic, and don’t leak at all.
For the bread-maker: We nearly always have a bread from this book on hand: Artisan Bread in 5 Minutes a Day book.
For the Indian food-lover: If you’d like to stop paying $18 for take-out Indian entrees, this is the cookbook you need. It’s accessible, relatively simple, and tastes authentic. Madhur Jaffrey’s Quick and Easy Indian Cooking
For the whole family:
Whirlypop: We make all our popcorn in this stovepop popper. It makes excellent kettle corn as well.
Board games such as the Busytown Game (for younger kids): This game has the whole family work together to win.
Museum or zoo memberships.
Happy shopping! I hope you find something for everyone on your list.
What are some favorite gifts you’ve given or received?
This post contains affiliate links.
We love giving gifts at Christmas. It’s a beautiful tradition that flows straight from the true meaning of the holiday. But this, of course, has nothing to do with all the materialism, over-consumption, and over-spending surrounding the season.
People love to extol the benefits of their approach to Christmas gifts, but what works for one family may not for another. And what you’re comfortable with may differ from your relatives’ preferences. We strive to keep Christmas spending reasonable without being Scrooges. Here are a variety of tactics to consider for reasonable gifting.
1. Secret Santa. I have four siblings, and while growing up, we wanted to give each other gifts but couldn’t afford to buy each sib something good. Early on, we devised the siblings secret Santa (though no one ever kept it a secret). We’ve carried on the tradition until this year, when we opted for an exchange amongst all the adults.
2. Fixmas Christmas. One friend felt their family had enough stuff—and a lot of unfinished projects. He declared a Fixmas Christmas, in which your gift to each person was to fix something that was broken. For his wife, he replaced their broken faucet with a new one they scored for free. Last year we joked about the new muffler for my car being one of my gifts.
3. Secondhand/homemade. For the non-sibs, my family for the past three years has declared a “secondhand Christmas.” Some people opt to give cash or gift cards, but for those not afraid of the thrift store or crafts, we ask for wish lists and shop secondhand. (I am afraid of crafts.) Last year I got my mother a full silverware set at the thrift store. The year before I found her a nice coat there.
4. No-spend. Some people prefer to call a truce and say “we don’t need anything, and we’re not buying gifts this year.” At some point it feels a bit ridiculous to shop for people who already have plenty, so if no one in your family is in need this year, consider a no-spend Christmas.
5. Kids-only. The past two years, Neil & his sibs decided to skip their gift exchange and just do gifts for the kids. I wouldn’t suggest this in my family since we’re the only ones with kids, but they have cousins on Neil’s side and it’s fun for everyone to watch the kids open gifts.
We aim to make Christmas morning magical for our kids, but it doesn’t take a big budget or fancy gifts to do so, especially while they’re young. We budget a certain amount per kid and aren’t afraid to buy used (or even freebies). Books, board games, and small toys or craft supplies are a hit so far. I try to think “winter entertainment” for the long, cold months ahead. Some people set a number of gifts per kids.
6. Common experience. One year Neil’s family called off gifts and we all headed to a cabin in scenic region two hours away. We hiked together, took turns cooking, and played games. It turned out to be more expensive that our usual gift-buying routine, but it was a wonderful time together as a family. Simpler common activities like sledding, going to a restaurant, or ice skating together would also fit the bill.
7. Spouses don’t exchange. I’m not a fan of this for us, but some couples like it. We often save items we’d like to purchase or replenish for our Christmas or birthday wish lists. Neil’s gifts from me this year will replace broken/worn out items of his. I think waiting to receive these as gifts is more exciting than just buying them for yourself. However, for those who would rather make purchases as needed, it may make sense for spouses to skip presents.
8. Donations. We’ve opted to make donations instead of gifts for a number of relatives who have requested it. There were several years when instead of Neil’s siblings’ gift exchange we all donated to a charity.
We’ve gone back and forth over the years, and while it might make things easier to do the exact same thing each year, it’s also nice to be flexible and decide what makes sense for that year’s circumstances. I love the giving aspect of Christmas and never want to declare “no spend Christmas” for all time. We’ll take it one year at a time and enjoy what each season brings.
How does your family approach Christmas gifts?
Dear College Kalie,
You are afraid of so many things. Don’t be.
Don’t let your adviser scare you. Just because he told you, all of 16 years old, that you need to decide your major within a semester, doesn’t mean it’s true. You have to explore and find out what you love before you make that choice.
Don’t let the fear of failure dictate your decisions. Listen to advice about your course of study. Remember that time your journalism professor, journalist friend, and grandmother (who worked at a newspaper) all tried to convince you to change your major to journalism? Seeing as you’ve spent more time working as a freelance writer than a teacher, maybe you should’ve listened. You chose to teach English in part because you were afraid to write. You learned so much in those two journalism classes you had to take. Just imagine the skills you could’ve learned had you studied it more! Sure, there are things you love about teaching, but that 65-hour-work week (at least till you’re tenured) is not going to work with the rest of your life.
Don’t be afraid to live off campus with friends. Even though you’ll forego some scholarship money, the experience will be well worth it, and God will provide. Living in close community with five other Christian women will prepare you for marriage like nothing else. You’ll learn how to resolve conflict, relate to those quite different from you, and admit your own shortcomings. And you’ll still be good friends with some of those roommates over a decade later.
Don’t be afraid to have fun. You’re all about the grades, but your GPA is never going to be your problem. You’re way too serious and need to loosen up and live a little. The “A’s” are all a blur, but the times you stayed up late listening to a friend, or laughing with your roommates, or going to Taco Bell with Neil are all as clear as if they happened yesterday. College isn’t just about a classroom education; it’s about learning who you are and what you can offer the world.
Don’t be afraid to make friends. You set out to do this, even though you had no idea how. And some of those relationships will continue long past graduation. They’ll be there for you when you get married, have kids, and hit rough patches along life’s road. Your GPA won’t do you any favors then, but your friends will.
Don’t be afraid to invest in the stock market. You will have the exact same amount of money in savings when you start college as when you get married and join finances. Lesson? You could’ve invested most of it, if only to get in the habit, learn the ropes, and earn a bit more than 1% interest.
Don’t be afraid to give. You’ll be glad you always gave away some of your meager income in college. Starting this habit early will teach you that there is always something to share if you make it a priority. And it’ll teach you to trust God to provide as you work hard and follow Him.
Don’t be afraid to get married. When your boyfriend of three years suggests getting married before graduation, try to be nice. Sure, it’s not conventional, but you know you want to spend your lives together, so why wait? Your destinies were practically set since you realized you both subscribed to Zillions (Consumer Report for kids) while growing up. In fact, you’ll help each other finish school and establish a simple lifestyle together from the start. And those student loans you’re marrying into–don’t worry, you’ll pay them off long before they’re due. (For information about repaying student debt and student loan refinancing, please check out Earnest’s resources here.)
What would you tell your college self? Were you as afraid as I was?