When I was a kid I loved the idea of xmas and birthday gifts. In my family we had a tradition for giving gifts worth fairly fixed amounts. This was to keep everything fair, I guess. I think I mainly loved the idea of receiving gifts but handing over the purse I stitched in school or the fancy wooden box I had made was pretty nice too.
One of the reasons I loved getting gifts was that xmas presents represented about 30 times my weekly allowance (about $2) whereas birthday presents exceeded my weekly allowance by about a factor 20. Yeah, when you’re 12 it’s way easier to get into the spirit of big new toys than it is to get into the spirit of xmas.
Now I’m wealthy which by definition means I can buy anything I want in cash. I have fairly modest wants. If I wanted a 50 foot yacht or a helicopter, I would not be wealthy.
Since I can easily buy anything I want, this also means that I already have everything I want. In fact in some cases I have too much stuff from the time when I still lived like a consumer. Getting more stuff is therefore a major hassle in my life. For one thing you want to show your appreciation for the 3 feet penguin figurine from Aunt Trudy that also doubles as a toilet paper dispenser a vase, and a juice maker, but on the other hand I’m running out of closet space fast. So I’d rather not …
Yet, people keep insisting on buying me presents, so I’m indirectly peer pressured to go along, no? There are two problems associated with that:
1) What do you give a guy who already have everything he wants?
2) Sometimes the giver puts them under financial strain just to give the gifts.
Here are a couple of solutions I have tried.
1) I have successfully negotiated a gift giving cease fire agreement with my sister. I don’t give her gifts. She doesn’t give me gifts. Everybody is happy. Unfortunately she’s the only one who has listened to any sense. If you have good negotiation skills or are related to reasonable people, this is really the best solution.
2) Cash or checks. This gift is considered impersonal, but it is certainly the best way to keep down the clutter. Of course the problem here is that this is about the only advantage to it. What makes it more tragic is that gift giving might put the giver under financial strain (think 5 children, 20 grand children, 50 second cousins ..) whereas for the recipient, me, the money is just a drop in the ocean e.g. say 5% of my daily portfolio fluctuations. In these cases I try to insist that it would make me happier if they got THEIR financial ship in order rather than adding 0.025% to my net worth. Usually this does not work and I still get the occasional check which then gets forwarded to my brokerage account.
3) Gift cards. The beauty of these is that they can be recycled or indirectly re-gifted. Simply use them to buy xmas presents for other persons next year. Otherwise cash is really better since it does not force the recipient to shop at a specific store. Another problem with gift cards is that it often makes people to spend more money e.g. $20 gift card buys a $25 item requiring a $5 expense.
4) The $5 gift. Put a $5 limit on any gift. This can really get people creative. I love this challenge, since I can often give far more than I receive. It’s a way of demonstrating frugal skills. It still causes some clutter though, but at least you avoid the “essential battery powered hot tea maker with built in flash light for picnics” and other things that make you go “huh?”.
5) Consumables. Food items are great. You eventually eat them, so they don’t add to the clutter. Food is as good as money since they substitute for things you would otherwise have bought. Thus they save the recipient money. They can even be personal. For instance, I like hot sauce and last year I got like 10 bottles of hot sauce. They were gone within six months!
6) Also under the consumable group but more personal. Semi-consumables. For instance, I like single malt whisky in small doses. It typically takes me more than a year to go through a bottle and unlike the hot sauce it’s easier to remember who gave me the bottle. For instance, my parents gave me a 15 year old Ardberg which is a smoky Islay whisky for my 30 year birthday which I still have.
7) Charity. This is really tricky one. First you have to make sure that the person actually appreciates getting a donation in their name rather than a more traditional gift. Second, you need to be very sure that the recipient supports the specific charity. Otherwise it can turn ugly real fast.
Other ideas are very welcome!