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For many American families, the winter Holiday Season in November and December is branded as an extremely difficult financial time in their psyches. Starting with Thanksgiving and ending with New Years, people are expected to shop, gift give, go on vacation, and in many cases rinse and repeat.
But is all this necessary? Do we really need to be giving gifts to distant family members, teachers, hairdressers, and our dog groomers for Christmas or Hanukah?
In a culture that breeds a need for excess through highly tuned marketing, flash sales and chaos churning events with names like ‘Black Friday,’ and ‘Cyber Monday,’ the answer can feel like it’s a ‘yes’.
But I disagree… and I’m not alone. In this article I’ve compiled several tips from experts that will help you get through the holidays in a fiscally prudent way that will still allow you to show your friends and family you care.
Spend Time not Money
During the holidays you may want to give a physical gift for no other reason than you feel obligated to. But giving the gift of your time during the busiest time of the year should not be discounted.
Making an intentional effort to spend extra time with a specific individual for the season is a great way to not only save money but show someone that you care. If you spend time with a friend or member of your family that may be older, you can use the time to help around the house.
Help with decorating for the Holidays or with basic chores.
This time of year can be stressful for everyone and having a helping hand while listening to some Christmas music and having an egg nog or 3 can create a much more valuable moment than any gift could provide.
Buy Gifts in Bulk
Just like buying paper towels or soda drinks, you can save an incredible amount of money by buying gifts in bulk. By getting more at once, you can save on packaging and overall cost.
As an example, Etsy has a bulk gift section here.
Sometimes, buying the same singular gift for a large number of people may feel a tad impersonal. To combat this, try putting together a gift bag. Have a theme. Perhaps it’s ‘back to the office,’ or sports related. Going this route will allow you to benefit from buying in bulk while also allowing you to personalize each gift bag.
Other bulk gift ideas can be found at the big box bulk retailers such as Costco and Sam’s Club. Often electronics are discounted when purchased in large multipacks and gift cards can be a steal with prices 20-30% below face value.
Don’t Spend what you Don’t Have
Sound advice that transcends even the holidays is to not spend what you do not have. Never put gifts for your loved ones on a credit card. Never put yourself in a situation where life’s needs such as housing, food or utilities are jeopardized so that you can buy gifts for friends, family or even kids.
At the end of the day if you can’t afford to buy a gift that’s okay. It’s not okay to put your personal finances at risk. If you have a family, it puts them at risk. If you don’t have a family, it can seriously impact your mental health and future.
Being resolute in this matter should be no-brainer. But how do you know how much you can afford? That’s the topic of the next section!
Set a Budget and Stick to It
Not spending what you don’t have is great advice but to understand how much you can spend without affecting your finances negatively requires thought. In personal finance parlance, it requires a budget.
Sit down well before the holiday season… or right now if the season is already upon you. Write down the name of each person or organization you are considering buying a gift for. Place these names in tiers… the highest tier being at the top of the priority list.
Now look back to your normal budget. Determine how much you can safely spend without going into debt or affecting your retirement savings goals. That’s the number that will have to be split by all the names you wrote down.
Now there are a couple ways of tackling this. You can split the money amongst the tiers give more at the higher end. You can split all the money evenly for all names written and cross names out once the money is gone on the lower tiers. The exact method can and will vary from person to person.
Whatever you decide to split the money, understand that is all you are allowed to spend. It is a 0-sum game. Any extra money you spend will come at a high personal cost that likely is against the spirit of giving.
It should be noted that it might be wise to set aside a small amount of your gift giving budget for greeting cards. In the event you forget someone on your list or deciding that you would like to give something to someone else after making your plans you can call an audible and give out a card with a personalized message instead.
Regifting something is probably the thing that excites me more than anything in this world. It just drives me bananas to be able to find a perfectly acceptable and useful purpose for something that I have been given that I just don’t want.
As someone who was inspired by the FIRE Movement (Financial Independence, Retire Early Movement) and retired from their day job at the age of 35, I learned how to control my expenses and be happy with what I have. To that end, there really isn’t anything I want.
Additionally, my family of 4 is stuffed in a small condo. Any new ‘stuff’ that makes its way in the door usually requires me to get rid of something in its place. So, when I get presents during the holidays, I acknowledge that the spirit with which it was given and then I immediately put it in a designated spot in my closet to either regift or donate.
Birthday gifts, prizes from silent auctions, and other items that I get throughout the year I put in the same spot… usually until the following gift giving holiday season.
Then, I make the list as mentioned above for the budgeting section and I assign an item to a person for whom it makes sense. Not all items I have end up getting regifted… the extra gets donated to someone that may need it more than me (just about anyone at that point).
Just be careful not to regift something back to the general sphere of people that you received it from.
If this happens by accident don’t fret. During the moment of crisis, you can mention how much you loved the one you received and how the recipient should have one too! Yes… I have done this… more than once. It is a white lie, but it might be an escape hatch that can be relied on to prevent harsh feelings.
Give Cards not Stuff
Every year, prior to Thanksgiving, my wife corals our family while we are dressed somewhat decent and snaps a photo. Just like that, magic happens. With little time, convenience and money, a stack of holiday cards appears with our picture and a warm personal greeting.
Trading in the idea of giving a gift for a simple personalized card can be tremendous… both in impact on the recipient and on your finances.
All the cards we have received over the years end up in a keepsake box. My wife and I go through them every few years and they are very heartwarming. They remind us of old friendships and places we used to live.
The heavy-duty battery organizer that I received from my Mother-in-law got regifted. Guess which one cost more? A card or the battery organizer?
The price of the gift you give doesn’t mean much. What are the chances you know what full grown adults with money of their own wants? If they wanted something at the amount you are willing to spend, wouldn’t they have already bought it? Give them a card… maybe you will also be giving them a warm memory down the road.
Make a Crafty Gift
If the budget is tight, another way to give a little more than a personalized card is to make a craft.
There are numerous items you can make with directions right from the internet. Making something unique can truly be a priceless way to save money and give something that somebody won’t want to regift.
For interesting ideas just search ‘DIY Gifts.’
A bonus would be to purchase a bulk allotment of DIY sets. In fact, I once purchased a set of 12 Do It Yourself Bird Houses. The kit came with the instructions and small wood boards to make 12 completely unique bird houses. I built several and painted them and gave the rest to my kids’ teachers for classroom crafts.
How to Handle Awkward Gift Exchanges
Getting real, if you put yourself on a rigid budget for gift giving you may find yourself in a situation where you end up receiving a gift without one to give in return. This is obviously an unenviable position. So, what are a few ways to avoid awkward gift exchanges?
- Build a few ‘anonymous,’ gifts into your budget. Put money aside ahead of time for 2 or 3 gifts for yet to be named recipients.
- Keep a reserve of ‘’ Always keep a few new items still in their packaging from years past set aside specifically for last second giving. This may include gift cards that you have received for things places where you wouldn’t have spent money normally.
- Be honest. If you find yourself in a situation where you are unable to give a gift when you received one just let the recipient know that you are on a tight budget. Tell them that you appreciate the gift and move on. Knowing your truth takes courage.
If you choose to go this route know that although it may be humbling, it can also be the most rewarding. It may help inspire other folks to reign in their gift giving as well!
There are plenty of ways to save money giving gifts during the holidays. Before making any hard choices, it’s wise to first figure out how much money you have on hand to spend by making a gift budget. Once you figure how much you have then you can divvy it up.
By regifting, making gifts out of crafts, buying in bulk, or limiting your gift to a simple personalized greeting card you can limit the amount of money that is shoveled out the door.
The spirit of the season often has us reaching for items that cost a lot so we can show how much we care for others.
Caring for ourselves, however, must come first. Be smart about how you spend money during this holiday season and don’t sacrifice your financial well-being… those worthy of receiving your gifts wouldn’t want you to do that either.
I hope you enjoyed this article! If you have any other ways to save money this holiday season, then throw them in the comments below.