Hello and welcome to another entry in my Frugal Grit series where I share hardcore hacks that help me and society prosper as a consequence. Today’s post is a somewhat controversial one because it will cause an inconvenience in your life. But as a result, you will be more intentional with your actions and your sincerity will show as a result thus bettering our relationships while also saving some money. Let’s get into it!
The truth about gifts. Gifts are great. And they can come in many different forms. Gifts don’t necessarily have to be something bought from a store. Depending on your financial situation, the way you handle gift giving can really impact your financial well-being and the environment.
For example, I am from a stereotypical large Italian family. Naturally, being part of a large family means that once all the kids grow up and start having children of their own, there is literally a new birthday every week. In addition to the stress of having to buy something unplanned every week for these parties, I cherish my precious weekend time. I do not fancy shopping, wasting gas driving all around town, waiting in line at stores, getting distracted by other items at the store and wasting more money on something that wasn’t planned etc. Even if I had the money, I just don’t feel that I need the stress of buying something that will instantly be forgotten. On top of this, most children I know in modern suburban America seem to have a bedroom and a loft full of crap they are not using. Why should I contribute to the clutter? As a matter of fact, a few of my siblings actually have bought homes and paid extra for a loft in their house and barn in the backyard for extra storage. Doesn’t that just seem like a waste of resources?
As a matter of fact, we as Americans have so much crap that starting a storage unit business is one of the most profitable companies you can start in this country.
Growing up, my parents had a single income and 8 kids. Needless to say, we had very modest means. I shared a 12×10 bedroom with 3 of my siblings. Because real estate in each bedroom was so scarce, we each had a little box for our toys. If our toys didn’t fit in our little box, we didn’t keep the toys. In hindsight, this made me appreciate the stuff that I had because I had to make sacrifices in order to keep the things that I wanted. That is a very important moral lesson.
The case for our environment
Imagine the impact we are having on the environment by obtaining so many useless material possessions. I am not necessarily an environmentalist, but if you haven’t visited a landfill, you should take a trip. The picture below gives a pretty good description. This is years of plastic crap going into the ground. I will probably die before I see the effects of this in the long term. However, being a gardening nerd, I can say that I feel bad for the residents in urban New Jersey. They cannot eat the vegetables they grow due to the “contaminated dirt” in their community. The article in the link doesn’t point to landfills, but it is indicative of what happens when we simply throw stuff in the ground and consume more crap instead of recycling what we already have in this world.
The Case for your financial health
Just to do the theoretical math, I have 50 family members that live in a close proximity to my house. Let’s just divide 50 people into 12 months a year. That comes out to 4 birthdays per month. If I were to spend $5 per gift, I would spend $20 per month. For the whole year that is $240. If I were to invest this same $240 a year in an IRA account and earn a 10% return on investment, I would have a whopping $43,000 after 30 years.
I didn’t even mention Christmas, mothers day, fathers day, wedding anniversaries etc. Since this account grows with compound interest, the more you contribute the more you earn. Even if I am half wrong with the 10% return on investment rate, this behavior alone will result in thousands of dollars you wouldn’t otherwise have.
Do I sound a little obsessive compulsive or cheap? I don’t think so. Here’s why. If you change the way you look at money and envision each dollar as a little employee, that employee can grow you more employees if invested wisely. So, if you were to buy your loved one’s investment stock instead of the crap they won’t use, they will also have little employees working for them. Remember the $43,000 above, If I were to save this money and gift it for college or financial help would you still think I am cheap? Moreover, would the recipient of this financial help still consider me cheap? Some would consider all this financial planning and service-oriented labor love.
Alternative ideas for gifts
You can save a lot of money and stress by doing something service oriented with your gift giving. Below are some examples. Yes, my examples may seem cheesy, but they are things I really do and this always puts a smile on peoples face.
- Free night of babysitting.
- Free Dinner of your choice.
- Free Dessert of your choice.
- Free Game night.
- Free day of lawn care.
I am not totally against making a purchase for a gift. If my examples above just don’t work for your situation, perhaps you can give something that is actually needed like new slippers, or a gift card to Amazon with a handmade card. I personally would love to receive herbs or a tomato plant for a gift. But I understand my taste is unique.
Do you have something of value that is laying around the house? There is nothing wrong with recycling your material possessions if you think it will bring value. One time in my life, my brother needed a new computer. Being a techie, I was able to build something out of the spare parts in my closet. The Computer I built was more than capable of handling the basic tasks he needed, and I got rid of the dust collecting pieces of equipment in my closet. A win for everyone!
If you are going to spend your precious hard earned money, make sure it’s going towards something that will be of value. I am not anti-gift, I am anti-waste of money. Being intentional with money was how I paid cash for my home, got out of poverty and this blog enables me to teach others suffering from the misery of bad financial decisions.
Can the lessons in this post help you? Tell me about it in the comments. I want to expand on this idea and make all of our lives a little easier. If this article helped, please consider sharing as a token of your appreciation. Thanks for reading!