7 ways to say ‘Happy Birthday’ without going into debt - KXLT - Fox 47 Rochester MN News, Weather, Sports #rochmn

7 ways to say ‘Happy Birthday’ without going into debt

Updated: Aug 01, 2016 10:34 AM
© iStockphoto.com / Skip O'Donnell © iStockphoto.com / Skip O'Donnell

By Andrew Housser

If you have children in your household, you have probably discovered an expensive part of life that deserves its own line item in your budget: the cost of attending friends’ birthday parties. Hosting your own children’s birthday parties can be costly enough. When your children are invited guests at another child’s party, however, parents may find themselves swept up in the social group’s expectations and inclined to overspend. Here are seven ways to rein in birthday-party spending.

1. Set a budget. Children in the elementary school years are likely to be invited to about half of their classmates’ birthday parties. When you add parties for relatives, neighbors, camp friends and teammates, some children receive invitations to several parties every month. With most people spending $15-$20 per birthday gift, that can add up to hundreds of dollars per year. To get a handle on gift spending, set an annual birthday gift budget that you are comfortable with, and that is attainable for you without going into debt. Decide whether you will spend a bit more than average on close friends and/or relatives. Set that amount aside from the budget. Then divide the remainder by the number of gifts you anticipate buying during the year. Do not exceed the resulting amount for any given party gift.

2. Skip the purchased card. Birthday cards can cost upwards of $4, and they usually go in the trash or recycling bin within minutes of being opened. Instead, have your children spend a few minutes making a card. Even a note or drawing on a folded piece of plain paper will identify the gift – and help your child experience the joy of giving as they think about what makes his or her friend happy. If you still opt to purchase a card, visit the dollar store or check out the 99-cent section of the card aisle. Do not forget to subtract the cost of the card from your gift budget.

3. Keep gift wrap affordable. Save and recycle gift bags and even unwrinkled, undamaged wrapping paper. If you need to buy new wrap, visit the dollar store for bargain gift bags, ribbons and gender-neutral rolls of paper.

4. Bargain-shop for gifts. Take advantage of buy-one-get-one-free sales, and stash the extra toy or game in a gift bin. When birthday party invites arrive, allow your children to choose a gift for their friends from the bin. To avoid duplicating gifts to acquaintances, keep a list taped to the lid of the bin or on your smartphone to remind you who received what. You also can look for toy cars, card games and other inexpensive-but- fun items at the dollar store.

5. Give the gift of creativity. Stock up, and give, sketchpads or notebooks with nice covers, pens and pencils, colored pencils or markers. Or invite the birthday girl or boy to your house for a play date, or a cookie- or muffin-baking morning. Most children love the opportunity to create, and appreciate a chance to take part in an activity with friends.

6. Do not rule out a celebration if you cannot afford a gift. Etiquette expert Lizzie Post suggests calling the other child’s parent and explaining that purchased gifts are not in your budget right now, but you would like to make the birthday child a batch of their favorite cookies. It is always fine to ask the parents about the birthday child’s interests so you can choose something they will love, no matter how small your budget.

7. Honor your budget, not what others do. Do not let other families’ spending sway you to spend more than you can afford. Stick to your designated budget amount for all parties, even ones where a classmate might bring a gift that costs significantly more than others’ gifts. Above all, do not go into debt to buy a gift for your own child or another child, or to host a party. A recent T. Rowe Price survey found that 46 percent of parents have gone into debt to buy something their children want. Instead, talk with your children about why something is not affordable right now. Brainstorm alternatives and model how to save for the desired item instead of going into debt to have it now.

Finally, set an example with the parties you host. Make your celebrations about fun and togetherness, not material goods. If your kids are up for it, consider specifying “no gifts” on party invitations. Remind children that the real point of the party is to have fun with friends.

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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