Christmas is a time of joy, happiness and generosity; though many of you will struggle with enjoying and affording Christmas as you exchange gifts with your family, friends and co-workers. Questions that may come across your mind are:
- How much should I spend on each person?
- Should I spend more money?
- Did I spend too much?
- What if they spent more on me than I spent on them?
You can take the stress out of exchanging gifts by communicating with all of those involved. As a matter of fact, determining (budgeting) how much you will spend and making sure you stick to your set budget will also help. Read my Budgeting Article for ideas on how to budget and enjoy the freedom of gift giving.
I love the holidays. I enjoy spending time with my family, as well as giving and receiving gifts. However, I do not believe in consumer debt. Therefore, I will never suggest going into debt to buy presents for this holiday season or for any special occasion. If you cannot afford it, you cannot buy it. According to the National Retail Federation, consumers are expected to spend $967.13 this holiday season (Expected 2017 Holiday Spending). This is alarming considering 57% of Americans have less than $1,000 in a savings account according to a CNBC Article and a 2017 GOBankingRates Survey.
As a personal finance coach, the thought of the amount of money I am going to spend used to overwhelm me. Together with my wife, we have two children, four parents, six siblings, six nephews and nieces, nine aunts and uncles, six close cousins and many co-workers and friends that we could justify exchanging gifts with each year. At what point is it too much? What if you have no Emergency Fund or not enough money in your Retirement account? I believe in setting spending limits then preparing and saving for it. For more information on how to prepare, read my article on Preparing Can Save You 1,000s of Dollars.
Many years ago, my family and I decided on a certain level of giving. We determined the amount we would spend on our nephews, nieces and each other. For me, communicating and deciding on a certain number took the pressure off. Years later, my wife and I wrote out a list of all those people we would be exchanging gifts with and assigned a dollar amount to them. It is not a perfect system but it grounds us, keeps spending consistent between both sides of our family and allows us to budget the amount needed for Christmas gift giving. I use an excel spreadsheet and we review it every year and make adjustments as necessary.
You may think that budgeting by person for Christmas is unnecessary and that the conversations with your family can be awkward. I am here to tell you that this is necessary so that you can enjoy the holidays without financial regret. My wife and I no longer feel overwhelmed, stressed out and frustrated. Further, several of our family members appreciated the budgeting conversation as they considered their own personal financial situations. I would be lying if I told you everyone in our family agreed with our philosophy right away. However, over time the tensions passed and we spend more time focusing on our time celebrating together. On a side note, do you remember what gifts you gave or received for Christmas two or five years ago? Probably not, can you see why it is important to budget the money you are about to spend?
The only person who can determine how much you spend is you, just because you have a budget does not mean you are cheap, insensitive, etc. It means that you are mindful, that your money is important to you and you care about how you spend your money.
I believe in exchanging gifts at Christmas but I enjoy spending time with my family and friends more. Have fun, enjoy your family, reduce your stress by following the action steps below.
YOUR CHRISTMAS GIVING ACTION STEPS
1-STAY OUT OF DEBT!!!
2-Make a list of the people who will be receiving gifts from you
3-Decide with your spouse how much you will spend on each other and your children
4-Determine the amount you will spend on your parents, aunts, uncles, brothers and sisters (if married decide together and be equal on both sides of your family)
5-Agree on an amount that will be spent on all nephews and nieces (talk with your family)
6-Talk with your family and together decide who it is necessary to exchange gifts with (keep in mind: as families grow you may update the exchanging gift policy)
7-Determine if you will be exchanging gifts with friends and co-workers (if so, agree on an amount)
8-Budget an amount for Christmas parties, office parties and other holiday gatherings
9-Write down each amount next to the list of people from step 1
10-STICK TO THE BUDGET AND AVOID DEBT!!!
To summarize my article, it is important to communicate with your family and friends, determine how much you will spend on each person, avoid debt and stick to your budget. Remember to enjoy the time you spend with family and friends.
