This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool's Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks.
Every summer, my wife and I cull our closets for stuff we and our kids no longer use. This is followed by a yard sale (complete with the obligatory lemonade stand from our kids), and the items that aren't sold get donated to a local thrift store that uses the proceeds for charity. In the end, we have more closet space, some extra cash, an entrepreneurial opportunity for our kids, and a tax deduction.
And a little bit of regret.
Many of the items that get sold or donated were gifts we purchased for our kids or each other. They were enjoyed for a short time — or, sometimes, not at all — then relegated to the Pile of Misfit Stuff. It's like that Marla Singer line from the movie Fight Club:
Someone loved it intensely for one day, and then tossed it. Like a Christmas tree. So special. Then, bam, it's on the side of the road.
Kinda depressing. And expensive.
I know: It just turned November — do we really need to start talking about the holidays already? Well, if you'd rather not, read the rest of this post with your eyes closed. But my wife and I are already planning, because this year we are trying to avoid spending money on gifts that only provide a onetime squib of joy.
We know that no gift will be enjoyed forever, and that part of the fun of the holidays is letting lose a little bit. Also, we're a little surprised each year by which presents turn out to be the favorites, so just limiting the number of gifts makes us a little nervous. Maybe we'll cut out the wrong ones!
Our solution is to make an extra effort to spend less on the presents we give, and to give presents that will survive next summer's closet-culling. Here are some things we've learned through the years:
Give things that provide repeat pleasure
Obvious, I know. But it's not so obvious when you're shopping. Two Christmases ago, we bought our son a Spider-Man action figure that climbed on doors. It looked so cool! And it was pretty fun…for about five minutes. Compare that to the Roku box I bought my wife last year. It allows Netflix subscribers instant access to thousands of movies and TV shows (though not necessarily the recent blockbusters). We don't have cable TV, so NetFlix is our main source of movies. By getting the Roku box, we cut our Netflix subscription down from three DVDs at a time to one, saving $8 a month, which paid for the box in less than a year. And we use it several times a week.
When it comes to kids, we've found that gifts with narrow uses get used the least. Conversely, gifts with multiple uses, in all sorts of places, and in all sorts of spaces, get the most action. The classic example is Legos, which my kids play with in their rooms, in the bathtub, in the car, and even use for homework projects. (In fact, the Legos I was given as a kid serve as the foundation of my kids' Legos collection; that's a gift that has retained its usefulness!) A slot-car racing set, on the other hand, requires set-up, takes up space, and the cars just go ‘round and ‘round and ‘round.
Get it used
We've already started prowling Craigslist for things our friends and family might want. If items on your “To Buy” list are suitable to be given pre-owned, now's the time keep an eye on the classifieds and (if you have an open-ended “To Buy” list) sites like Freecycle.org.
This is something my wife does very well. She buys potential presents at all times of the year, when she finds them at excellent prices, and keeps them in the “gift box” in our basement. It's also handy to have when you're invited to a birthday party and don't have time to get a gift.
Give experiences over stuff
This may seem to contradict our goal of buying things that last, but you know what they say about memories and all that. For my mother's 70th birthday, my sisters and I took her on a trip. It wasn't exactly cheap, but she valued it more than anything I could have wrapped. Plus, some experiences really can be the gifts that keep on giving, such as art, photography, or cooking classes (complete with providing babysitting services, if required for the recipient to attend the classes).
Buy in bulk
Sierra Black recently wrote about the pitfalls of buying in bulk, and I agree. But if there's ever a time to save by buying a lot of stuff, it's the holidays. It works for gifts, and for food if you'll be entertaining or hosting relatives. As an experiment a couple of years ago, I looked at how much I'd save by shopping at Costco compared with my regular grocery store. I bought nearly identical items at both places and spent 37% less at Costco.
One holiday season, I bought pairs of white underwear in bulk, decorated them in ways not appropriate to discuss on a family blog, and gave them to my friends. I assume they were gifts that got multiple uses, though I didn't perform any random spot-checks. The point, of course, is that homemade gifts really can be the most memorable…and least-expensive.
Be honest about what you don't want
I have a very spotty record when it comes to buying things for my wife. In the past, she was too nice to tell me when she didn't really like something I bought her. So it stayed in our closet until the next summer, and then…well, you know. Now, I keep all receipts, and she's much more comfortable returning items that I gave her. (And I've been better about getting her friend's help at holiday time.)
J.D.'s note: Robert may be worried that it's too early to write about Christmas, but if Google traffic to this site is any indication, the Christmas season started weeks ago. Last year's article on homemade Christmas gifts has been on fire!