Spend your money more mindfully—and meaningfully—during the holidays.
Regardless of your budget or your particular financial stressors, being more intentional with your money can help you use it in a more meaningful way so you don’t end up filled with guilt or regret (because that’s not the holiday spirit). Here are five tips to prevent overspending and tend to your financial wellness during the holidays.
Use a dollar-based spending plan.
Too often, people overspend because something catches their eye when they’re holiday shopping. Then, when the season is over, they realize they’ve spent way more than they wanted to. That’s why I recommend starting with the end in mind by asking yourself – How much can I afford to spend this year? To figure out the answer, look at your checking and savings account balances (or your Christmas Club account) and decide how much you can afford to drop on gifts—without impacting your financial cushion (emergency money you can tap into if you lose your job or face another unexpected financial blow). And don’t forget to also factor in additional holiday-specific expenses like travel costs, groceries, and gift-wrapping supplies, which can also add up fast.
Do you want to spend $1,000 total? $200? Whatever the number is, write it down or put it in a notes app on your phone and work backward from there. If you need to buy eight gifts and have $240 to do it, each gift limit is $30. Or maybe you want to spend a little more on some people than others—as long as the math works out, you’re good.
Once you’re out of that money, you can either say no to more gift-giving (try something like, “I’m sadly maxed out on secret Santas, but maybe next year!” or “I have to opt-out of the gift exchange, but thank you for including me!”) or go the DIY route. Can you whip up a mean batch of peanut butter cookies? Do that! Are you a painter with a penchant for tiny watercolors? Consider gifting your personal creations instead.
Consider gifting everyone on your list the same thing.
You don’t have to buy each of your friends and family members a major present à la Oprah, but giving everyone something from the heart (that also fits in your budget) can help you avoid overspending by cutting down on decision fatigue. We can only make so many decisions throughout the day (what to eat, wear, buy, etc.) before we start to get emotionally exhausted, which makes decision-making harder—and can increase the likelihood of purchasing something you regret.
So rather than trying to rack your brain for the perfect gift for your great aunt, ask yourself, What did I spend money on this year that brought me joy? A neighborhood friend of mine started doing this a few years back. Instead of gifting a bunch of different items, she buys her year’s favorite purchase in bulk and gives it along with a note about why she loves it. Over the years, her thoughtful gifts have ranged from these $5 exfoliating shower gloves to this Michigan-grown biodynamic tea—both of which I was delighted to receive.
Imagine the recipient opening your gift without you.
Wanting to wow your loved ones might make you spend more than you should. That’s why I recommend imagining the recipient opening a potential purchase when you aren’t around. This exercise may help dial down the tendency to want to elicit a Cheshire Cat grin and can help you give a gift that better aligns with the recipient’s long-term needs and enjoyment (and your budget).
As an example, I was on the receiving end of a very practical gift a few years ago. My in-laws, knowing how much I love popcorn, got me a hot-air popcorn maker. It might not be the most exciting (or expensive) thing you can think of, but I get so much use out of it, and I think of them at least once a week when I pull it out of the cupboard and load it up with my local corn kernels.
Experience-based presents may also pack a bigger satisfaction punch: A 2016 study showed that recipients felt more connected to their gift givers when they received experiential gifts. So instead of asking yourself, Will they light up when they get this gift? maybe ask, Is this something that they’ll use again and again?, or, Is this an experience that they’ll love? Maybe your mom needs a new glasses case more than a cashmere sweater. And perhaps a $40 escape room gift card is a better gift for your puzzle-loving sister-in-law than an expensive serum set if skin care isn’t her thing.
Take advantage of gift cards, local deals, and gift packs.
According to one recent survey, almost half of folks in the US have unused gift cards, for a total balance of $175 per person. Shuffle through your wallet or junk drawer and spend a few minutes figuring out if you have any remaining money on your gift cards (there’s typically a website or phone number on the back where you can enter the card number to figure out the balance) that can offset the cost of gift-giving. Maybe you can use those extra Starbucks dollars to help buy your coworker a new tumbler for their commute, or put your leftover Sephora money toward a luxurious lip balm for your friend who never goes anywhere without a stick.
I also love thinking through future expenses I know I’ll have, and factoring those into my gift shopping. For example, my favorite neighborhood burger joint usually does bonuses during the winter holidays, such as “buy $75 in gift cards, get a $15 gift card on us!” So I’ll spend the $75 to stock up on future date nights and give the $15 bonus gift card to someone on my list. I also like to buy product samplers or gift packs and separate the items into single gifts to save money. Everything from beauty sets to wine grab bags can get divvied up and wrapped individually to make cute gifts.
Think about what actually matters to you.
To practice financial wellness during the holidays, perhaps my best tip is to focus on the important (free) stuff: spending time with your favorite people, reflecting on cherished memories and making new ones, and deep belly laughs (if you’re lucky). You can even write a list of the three to five things you love the most about the holidays and stick it by your computer or add it to your notes app next to your gift list so it’s at the front of your mind when you’re shopping. That perspective might help you think twice before doubling your budget or racking up credit card debt for a gift that probably won’t have the lasting value of, say, your annual tradition of making mulled wine with your best friend or watching your family’s favorite cheesy holiday movie.
And while I have you, a tip to boost your financial wellness next year? Treat gift-giving like a bill and save for it each month. If you spent $300 on presents this year, set up a monthly $25 auto-transfer into a savings account and label it “Holiday Gifts.” That way, next year’s gifts will be pre-funded and you won’t have to reach for your credit card—or feel those pangs of regret when the twinkly lights go out.
More like this: