The gift conundrum, it happens every year at least a dozen of times. Both for gifts received and gift to be given. Here is what we do, let us know how your system works!
The Gift Conundrum
Mr. CF celebrated his birthday last week, well not really “celebrated”, but it was my birthday. I received a couple of gifts too, one was in the form of beer the other in the form of cash. A liquid gift is always nice and I have no issues with those. It’s a consumable, does not take up much space and it’s hard to go wrong.
The cash gift this year came from my parents and my grandma. Grandma is not that mobile anymore, so I’ve been getting cash for decades now. It’s always welcome and I usually buy something useful with it. Next, I go and visit grandma and show her what I’ve gotten for the money. She’s always happy with the visit and It’s fun for us to visit her too, double win here!
My mom also called to ask if there was anything I wanted, the answer was “nothing really, well maybe….”. Actually I’m in need of some new cycling gear (helmet and shorts, the current ones are too old/worn). But considering I had not done my research yet on what I want, I just got some cash to go and get what I needed. It’s been going like this for years too. Getting (cash to buy) practical gifts is great actually.
Getting random “stuff” not so much (still have a unopened gift from last year sitting in the garage, no use for it….). If we do celebrate a B-day, we usually ask friends/family to bring themselves, and no gifts. It’s slowly getting better! But some are still stubborn.
On the note of cash gifts, how to deal with this “income”? So far we have left it out of the budget and treated it as a non-cash gift. The reason is that if we would add the cash to the budget, and spend it all, this would draw down the overall savings rate.
On the other hand, if you add the cash to income and would not spend the money but invest. This could artificially increase your savings rate. Again, this is not really an appropriate way to deal with this in our minds.
Funnily enough, in both scenarios the money does aid your path to FIRE. In the first case because you don’t have to spend the money yourself from your income on the gear/materials/products you “need” (“wants” are a different story). This will leave more money for investing, as would the second option to directly invest the money. Either way, it will take a long time before you can buy this sub at $15M:
Gifts to be given
We are trying hard to not give “stuff” unless specifically asked for. We try to give experiences where we can, especially for kids. For them we try to take them on a day of fun to a zoo, play area, museum or other activity. For adult birthdays we usually show up without a gift, or just a bottle of wine or case/six-pack of beer/book. With parents we usually plan an outing, such as a a restaurant visit. Sometimes we do this in combination with an activity such as bowling, cycling, theatre performance, out-door activity or similar.
It really depends on who’s birthday it is, what their attitude is around money and time available. However, we are starting to see that more and more people appreciate you just coming over for the fun, even without bringing gifts. There is still hope 😉
How do you deal with gifts and your savings rate? Do you invest cash gifts? How about gifts you give?