Figure out how much to spend on your loved ones during the holiday season

This easy equation from Garth Sundem will help keep you from over-spending this holiday season.

You're going to have to come up with a budget first. Think hard. This figure should include everyone from your loved ones to your boss -- and people like your kid's teachers, or the people in your book club.

Let's use $400 as an example.

List all the people who you're going to buy presents for. Here's a bit of a list to get you started:
Mom
Dad
Brother
Sister in Law
Significant Other
Neighbor # 1 = 1
Neighbor # 2 = 1
Neighbor # 3 = 1

Rate the importance of each person by assigning them a number from 1 to 10, with 1 being the least important and 10 being the most important. Kind of like this:

Mom = 8
Dad = 8
Brother = 7
Sister in Law = 7
Significant Other = 6 (Sorry, hun. I'll make it up to you on your birthday!)
Neighbor # 1 = 1
Neighbor # 2 = 1
Neighbor # 3 = 1

Add all the ratings together. Our example total is 39.

Make your budget equal to the ratings total times X. Also written as: 400 = 39x.

Then solve for X. In the case of our example that's 400 divided by 39. Also written as: 400 ÷ 39 = x

Let's do the math.

In this case X equals about $10.25. That's your base number. Multiply the base number by the rating you assigned to each person. That's how much you spend on that person. For example:

Mom = 8 x $10.25 = $82.00
Dad = 8 x $10.25 = $82.00
Brother = 7 x $10.25 = $71.75
Sister in Law = 7 x $10.25 = $71.75
Significant Other = 6 x $10.25 = $61.50
Neighbor # 1 = 1 x $10.25 = $10.25
Neighbor # 2 = 1 x $10.25 = $10.25
Neighbor # 3 = 1 x $10.25 = $10.25


Happy shopping! Print this article for reference

Want more? Take a look at Garth's website, or check back here for video and more equations for life.

Meanwhile, if you apply Garth's formula to your own holiday shopping, let us know. Tell us about it in the forums.