It’s Christmastime. The bells are ringing… or is that the ring of the cash register? According to a 2021 study, the average adult American spends nearly $1,000 on gifts for Christmas. Giving is one of the best parts of Christmas, but setting reasonable limits on what to spend on friends and family will help control overspending. Put a budget on spending and do your best to stick with it.
Here’s something to think about. Do you remember what you got from friends and loved ones last Christmas? Try to make a list of everything you received. You may remember a thing or two, but most people can’t remember them all. That begs the question: how important were all those material possessions? My favorite Christmas memories are of times shared during the Holidays — playing board games with my mom and dad or cutting down a tiny little tree on our family ranch and hauling it home to decorate it.
I’m not saying that giving gifts isn’t important — of course it is — and fun too! By keeping track of how much you are spending, you will have a better grasp on things. I know one family that chose to give only $5 presents to each other. Choosing just the right gift for under $5 was a fun challenge. They took the money not spent on gifts for three years and went on a family vacation together. The memories will last a lifetime.
I’d like to share with you these six helpful tips about Holiday spending from Amanda Christensen, Extension Professor who specializes in financial management.
Determining how much to spend on Christmas can be tricky. Financial planners advise us to spend no more than 1.5% of our income on holiday expenses. So, if you made $50K, you’d want to stay under $750 for total holiday spending. If you love the holiday, but do not want to be paying for it in May, here are a few things to consider now:
1. Stick to it: Focusing on your gift-giving budget is one of the easiest ways to control holiday spending on your terms. Set a total spending limit on gifts, and carefully think through the gifts you buy. If it helps you stay within your spending budget, suggest a gift exchange with family members, coworkers, neighbors, etc. Draw names instead of buying gifts for each person.
2. Divvy it up: Once you’ve determined how much to spend, based on the recommended 1.5%, divide the total among the people you plan to buy gifts for, the holiday food extras, and any other expenses you know you will incur. Finish the spending plan before you start shopping and keep track of spending as you go. There are plenty of Christmas gift budgeting apps on iOS and Android to help. Choose one with high customer ratings.
3. Set it aside: If you are spending $8 to $10 each day for lunch, pack your lunch and save that money in a separate account for Christmas expenses. Over the next four weeks, that could add up to $200.
4. Shop it smart: Major shopping events are designed to encourage you to spend more. Take advantage of the sales but stick to your list to prevent overspending.
5. Power shop it: Find someone to watch the kids during the day (to avoid the nighttime shopping crowd) and plan a power shopping day where you tackle your entire gift list in one day. Be sure you do not shop on an empty stomach and be firm about sticking to your list. Then, you can spend time with your family making holiday memories while everyone else is frantically trying to find last-minute gifts.
6. Get creative: You do not have to sacrifice that personal touch because you are spending cautiously. There are many ways to reduce expenditures and still give appreciated gifts. Non-monetary gifts are a fabulous way to keep costs down. Homemade gifts are often more meaningful. Coupons or certificates for service or quality time are a great way to share talents and make memories.
Stick to these six tips and you’ll be a lot less flustered as you check off your holiday shopping list. You will also have the peace of mind that comes from knowing you won’t be paying for Christmas into next year.
Darlene Christensen is an associate professor and head of Home & Community/4H and Youth Development at the USU Extension – Tooele County office, which is located inside the Tooele County Health Department Building, 151 N. Main, Tooele. She can be reached at 435-840-4404, 435-277-2406 or at firstname.lastname@example.org.