Pop quiz: Can you name more than three gifts you got for the holidays last year? A sweater, an Apple watch, a popcorn tin … and, ummmm? Most of us would be hard-pressed to answer this question, even by late January.
What we remember, of course, are the moments with family and friends – the relationships that are renewed in the holiday time of slowing down. Material gifts are fine for the moment, but they are usually forgotten even before they have the chance to break and wear out.
So why do Americans spend an average of $1,000 each and $720 billion altogether on holiday gifts when it can leave us overspent and under-satisfied? How can we avoid “giver’s remorse” – the cousin of the dreaded buyer’s remorse?
For many of us, there’s a nagging feeling of guilt and anxiety about how much we’re spending, a back-of-the-mind distraction that can take away from those holiday moments where memories are made. Is it possible to celebrate without giver’s remorse, without the January financial hangover?
Today, let’s look at a few tips for how to feel good about your spending habits and avoid financial stress at the holidays.
Creative Giving – Tips You Need to Know
You know the old adage, “When the going gets tough….” Maybe a twist on the familiar proverb works: “When the going gets tough, the tough get creative.” A few creative giving tips can help you spend your holiday dollars in the best way possible this year.
Give Experiences, Not Stuff
The trend with millenials has been toward experiences, and away from items. Rather than stash money away for a house or a car, your young adult children or grandchildren may put their money toward a trip to New York or a parasailing lesson. A major factor here is FOMO – “Fear of Missing Out.” Young people are posting pictures on social media about what they’re experiencing, and no one wants to miss out.
No doubt the millenials in your life will appreciate a set of steak knives, but the memories and socialization from a professional chef teaching them to prepare a steak dinner might appeal more to them. This can result in gifts that may or may not be cheaper, but are always more meaningful, and could even give you something to do together to deepen your relationship.
Pro tip here: You can buy yourself time by choosing a summer-bound experience – no one wants to visit a lakeside cabin in winter, but maybe in July. If you start that process now, you can often pay for it incrementally and therefore avoid the big holiday sticker shock.
Give Donation Gifts
Donating toward a cause or an organization on someone’s behalf can be a very meaningful gift. You can, of course, do this in a lump sum, but there are also options for an ongoing gift that will help you avoid holiday financial stress. You could sponsor a child on someone’s behalf for a small monthly donation, or give an ongoing pledge for a certain period of time, or even arrange to pay for tickets to a charity event in the future. Be careful to make sure your loved one feels passionate about the cause you select, to make sure they are equally excited about the gift.
Bonus: These gifts can also be tax deductible.
Pay in Green
Pay in cash for purchases as a way to slow yourself down from the oblivious ease of paying with plastic. Withdrawing the designated “gift money” ahead of time can give you a tangible reminder of when the holiday fund is running low.
Putting that money away ahead of time – yes, even in a jar on top of the fridge – can help you see how much is there and be more cognizant when you head out to shop. This can also be a good visual for kids to learn about money, and a tangible reminder of cost.
Paying in cash can also help with avoiding holiday financial stress. Exorbitant interest rates and hidden fees can turn overspending into an irritating regret pretty quickly.
Save in a Short-Term Account
A short-term savings account, what used to be called a Christmas Club, can also be helpful for holiday spending. Basically, it’s an account that you make small deposits in throughout the year that becomes available for the holidays. You can set it up to deposit into your main account in November and add penalties for accessing it before that time.
Again, this is a way to help you become “money aware” around the holidays, and it will also give you a little extra cash when you need it. Giving yourself a holiday bonus like this can stop you from overindulging into money that is earmarked for the rest of the year.
Budgeting ahead of time is, of course, a great solution to a variety of problems. Whether it’s putting money away every month in preparation, or sticking to a set amount you’re willing to pay for the holidays, creating and following a budget will relieve the stress of gift giving.
Set out who you’re buying for, how much you’re going to spend, then creatively engage with gift giving to leave yourself a New Year’s resolution that’s not “getting out of holiday debt.”
Your Most Important Holiday Spend
Whatever you’re celebrating and however you’re doing so, we wish you the most meaningful of holidays. May you be able to focus through the tinsel and noise on what is the most important holiday spend: time with your loved ones. Budget that well, because you can’t make more of it.
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