Tuesday, December 8, 2009

Law of Diminishing Returns

Before I became a Home Economics major, I was a business major for 25% of my educational time. One of the things I learned about was the Law of Diminishing Returns. Simply put, there is a time when a system will peak in the returns you get with an investment. After that peak, if you put something in, you will get less back for it.

Simple example. Ice cream. That first spoon of ice cream tastes so good. It is worth the money and the calories to have it. The next bit is also good, and so is the next. However, there will be a point where if you put in more money, you won't get the same satisfaction out of the ice cream as you did before. In fact, there will come a time where even though you put money into ice cream you will not enjoy it at all because you are sick of it.

Now, let's look at it with Christmas. You buy your kids TONS of presents - this year is going to be the perfect Christmas. Christmas morning, they come down and scream at the piles of presents they see. They start ripping off the paper and are so excited for the first present.

However, they have 20 other presents to get to. So instead of enjoying that first present, they say a quick and asked for, "Thank you" and tear into the next one. This happens over and over. Pretty soon, you will notice that they are not very excited anymore. In fact, instead of being grateful, they start to complain about they aren't getting what they wanted. It isn't the right color, Johnny got something better, it doesn't fit, etc. etc. They start to complain and the whole day (and budget) is shot.

Now think of this. They come down to presents under the tree. They are still just as excited. They open their first one, and wait while Johnny opens his present so that they can all see what everyone else gets. After a few presents, I mean all of the presents, are open, they still have enough energy to enjoy what they got.

They have not peaked and ate enjoying each present. Also, their sensories aren't getting overloaded with so many things, and now they can actually focus,enjoy, and be grateful for the few things they got.

My frugal friend Eileen, also warned me not to get my kids used to getting lots of presents when they are little. Because as they grow up, they will expect Christmas to include mountains of presents. As they get older, those presents get more expensive.

Many of you may be wondering what will be under our tree this year. I did ALL of my Christmas shopping this summer at yard sales. We have also been given some great toys from friends that I am waiting to give the girls on Christmas (with tags from the friends of course :).

I do have to admit, I did a quick inventory the other day and got a little worried that we weren't going to have enough to make it "look good". (This is a journey for me too.) My DH reminded me that they are getting a Wii (bought used off of Craigslist) and that they will still get gifts from family members.

I am looking forward to a low key day, that will focus on family time, and less on presents. I hope that this post will help you "diminish the returns" that you have to make to the stores this year and enjoy your Christmas more.

I would love to hear how you are cutting your holiday bills this year.

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