Gift-Giving Guidelines for Christmas

It’s almost Christmas! It’s a wonderful time of year for many, but it can also be a time that puts a huge strain on your finances. We want to everything that our family and friends put on their wish lists- we may even feel compelled to do so – but doing so comes at a huge cost.

A Gallup survey estimated that adults in the U.S. will spend about $885 on Christmas gifts this year.

• 33% expect to spend at least $1000 on gifts.
• 22% expect to spend between $500 and $999.
• 29% expect gift spending to be between $100 and $499.
• 3% plan to spend less than $100. (https://goo.gl/sf4Tqq)

And we need to keep in mind that actual spending tends to be higher than the forecasts. Holiday sales are expected to increase over 2017. Spending will likely exceed $700 billion.

Another item worth noting is that many of the gifts that make it onto wish lists are bigger ticket items – smart phones, tablets, laptops, video games systems, etc. In our desire to give our families a merrier Christmas, we can get ourselves into some seriously bad financial situations – or we simply feel guilty because our kids can’t get the latest and greatest like all their classmates seem to have.

It’s easy to fall into this trap, so you need a plan for safe spending this Christmas season. Here are a few tips to keep in mind.

Set a budget. It sounds so easy, right? Even so, many people refuse to set a realistic spending budget for holiday gifts. They’d rather just go with the Christmas flow. Caution – Don’t begin with the wish list. Begin with a spending limit for each person.

Set expectations. If money is tight this year, then tell your family so. Don’t pretend you’re better off than you actually are. Might your kids (or spouse) be disappointed? Sure…but you can’t let guilt be the driving factor in your finances.

Be careful with credit cards. Credit offers a false sense of prosperity. You can get what you want now, but the bill comes due a bit later. The wise of use of credit can be a good thing, but too many get stuck with having to making minimum payments on credit cards and getting hammered by interest charges. Limit the amount you put on credit cards.

Be careful about spending on yourself. I have to confess that this is one area where I struggle. When looking for gifts for others, I inevitably find stuff I want. After all, it’s on sale, I could really use it, and no one is likely to get it for me. This is especially true when I wander the aisles of stores like Home Depot or Lowes.

Remember that you’re not in competition with other families. TV commercials make it seem like you should give our husband a pricey car with a big red bow or give your wife a sparkling diamond necklace. Somehow we have been convinced that our children are being deprived if they don’t have the latest iPhone or gaming system. The truth is, some families can afford a Christmas like that, but most can’t. Do the best you can with what you have, but don’t try to compete.

Plan ahead for next year. This year is what it is, but to avoid getting caught in the same Christmas trap next year, begin planning early. Put a little money aside each month in an account just for Christmas. In fact, living on a budget in 2019 will help in a lot of areas.

Have a Merry Christmas!