How to Save Money with a Gift Closet

If you’re a regular reader of KOAB, you’ve no doubt seen me write the following dozens of times: “This is a great price. Grab it for your gift closet.”

But what exactly is a gift closet? And what’s the rationale behind spending money today on toys, housewares, and other gift items, which one doesn’t imminently need?

Personally, I love having a well-stocked gift closet, because it saves on two of my most precious commodities:

#1. Time — My gift closet has all but eliminated those last minute trips to Target to pick out a birthday gift; plus, last minute or not, shopping from your home is always faster than schlepping to the store!

#2. Money — Just like I do with my groceries and personal care products, I buy gifts when the price is low, so I don’t have to pay retail later when I really need it.

Let me repeat that again, because it’s the crux of what makes a gift closet so great: With a well stocked gift closet, I never have to pay retail for our birthday, Chanukah, housewarming, hostess, baby, Bar Mitzvah and wedding gifts!

So, are you ready to start saving time and money with a gift closet?

5 Tips for Saving Money with a Gift Closet

#1. Make a List

Take inventory of the gift-giving occasions in your life. Do your children attend a lot of friends’ birthday parties? Do you regularly get invited to weddings? Bar or Bat Mitzvahs? Does Chanukah gift-giving extend to your 17 nieces and nephews? Do you love to spoil your grandchildren for their birthdays – or anytime?

If you don’t know where to start with your list, I made a free gift list brainstorming printable, which you can use as a guide. Start by listing all the people in your life you know you give gifts to, then list the occasions for which you give them gifts, and brainstorm for possible gift ideas for these occasions. (This printable is saved as a Google doc. Let me know if you have any trouble opening it.)

Once you have a clear idea of your gift-buying needs, you can be focused on picking the items to stock your closet. Those crystal candlesticks may be a great deal at 75% off, but if you haven’t been invited to a wedding in twenty years, they’re probably not the right place to save.  Put your energy, instead, toward better investments that fit your gift-giving style.

Tip: If you have young children, always have a few items on hand for their friend’s birthday parties. Doing this along saves me well over $150 a year.

#2. Only Buy the (Very) Best Deals

The key to saving money with your gift closet is to shop at the right time. For me, that means, stocking up when I’m saving at least 50% off the retail price.

What’s so magical about 50% savings? I know that sales of 20% or even 30% come around often, so unless it’s something I need right away, I’ll patiently wait for a better deal.

Once items are discounted to half their retail value, however, those savings are much more rare — and I’m therefore eager to “lock them in.”

Of course, most of my gift closet items were scored at even deeper discounts! Children’s toys, for example, are clearanced at Target stores in January, following the holiday rush, and again in July. I wait to see those big red 75% off clearance signs and then scoop up $100 worth of toys for just $25!

Target Store end caps also hide fantastic clearance deals throughout the year. I have purchased sets of Burt Bee’s soaps & lotions, for example, for pennies on the dollars – and they make wonderful hostess gifts.

Target isn’t the only place to stock my gift closet, of course. In fact, I get many of my best toys deals from Amazon. From department stores to drug stores to online retailers, great deals abound. Once you have your list of gift-giving occasions, you are primed to grab the best ones whenever and wherever they hit.

#3. Don’t Forget About the Gift Wrap

It’s great to be able to give quality presents that cost you almost nothing, but don’t blow your savings by paying full price for gift bags and cards!

Create a discounted stockpile of these items, too. The best time to buy is early January, when holiday wrap is marked down to as much as 90% off. I pick up huge rolls of wrapping paper for $.50 and big bags of bows for $1.

You may need to sort through the obviously Christmas-themed paper, but I’m always able to find “neutral” selections with bright colors, stripes or patterns.

I also love to use gift bags for the convenience factor, so come January, I stock up on clearanced, solid green, red or silver bags – and plenty of white tissue paper. When given in July, these bags certainly don’t look Christmasy!

#4. Make Room & Get Organized

Despite the name, a gift closet doesn’t have to be contained in an actual closet. Mine sure isn’t!

I have an inexpensive bookshelf in our unfinished basement and organize the shelves by gender, age and occasion. Next to the shelf, I have an old Ikea bin, which is filled with rolls of wrapping paper and bags of bows and ribbon.

If your home is particularly tight on space, you can stash gifts under the master bed or in tubs in the attic. The top shelf of a linen closet – where all those unreachable items languish – could be reclaimed for your gift closet space. I’ve even heard of families who store their gift “closet” items in suitcases in their garage!

Wherever you store your gifts, keep them as organized as possible, sorting by age, occasion or type of gift. You may even want to keep a running list, to which you add new purchases and cross off gifted ones. Then, even if your gift closet is stashed away in the eaves of your attic, you can quickly consult your list to know which items are still available.

I also created a simple Gift Closet Inventory printable for you, if you’re looking for a quick template for your list. I created one with the categories that I use, and one that is blank, so you can choose the categories that best fit your gift-giving. (These are saved as Google docs. Let me know if you have any trouble opening them.)

#5. Budget for the Gift Closet

It’s great to spend less on your gift-giving, but splurging on a clearance deal when you don’t have the cash in your budget won’t actually save your family any money.

In fact, if you routinely put these kinds of bargains on a credit card and carry a balance, they cost you far more in interest than they would at full price.

In order to avoid this trap, try setting aside a fixed amount of money — even $10 or $20 — every month into a gift-giving fund. Store it in a cash envelope or squirrel the money away in a savings account. Then, when the prices are right, you’ll have the money to follow through on the deals.

Do you have a gift closet at your home? Where do you store all your goodies? What kinds of items do you look for bargains on? Have you been able to find great buys on gift wrap and greeting cards?