The holidays are right around the corner, and it's time to set a holiday gift budget for Christmas and other seasonal celebrations.
Most people don’t see how enjoying these special occasions is possible without maxing out your credit card or denting your bank account. You can get together with friends and family in meaningful and budget-friendly ways by capping your gift expenses. Here are strategies for a wallet-conscious holiday season.
Start by looking at your bank account. How much disposable income is available? Do you have funds put aside for the holidays, or are you living paycheck to paycheck?
While most people relate the festive season with gifts, the essence of the holidays doesn’t lie in material things. Yes, gift-giving is a wonderful tradition, but is it worth taking on debt for items that may only bring temporary joy?
Don’t feel guilty about tweaking your gift list if funds are tight. Prioritize close family members and special people in your life.
Consider do-it-yourself (DIY) options like homemade cards, knitted scarves and baked treats. Handmade items often hold special meaning and show you care without stretching your wallet. It's one of the best holiday budgeting tips for anyone looking to give thoughtful presents without breaking the bank.
Once you understand your financial situation, save for the holidays by setting a realistic budget for gifts. Be objective about your finances. The last thing you'd want is to welcome the new year with an outstanding loan because you overspent.
It’s expected that shoppers will spend $641 on gifts for family, friends and co-workers this holiday season. This number is a good reference point, but you should adjust them based on what’s comfortable for you.
Is there an ideal number? Not really. If $600 seems too much, cut the budget to an amount you’re comfortable with.
Parents tend to indulge their children during the holidays, buying whatever their fingers point to. If you only have one child, this might seem like no big deal, but it can be a significant expense for households with multiple kids, especially if you consider that you also have friends and other family to buy gifts for.
Set a specific budget for children’s gifts to avoid overspending. This approach helps you stay on track financially and encourages kids to understand the value of thoughtful giving over the cost or quantity of presents they give or receive.
Seeing you splurge may negatively affect how they manage their expenses as they grow older. Instead, teach them how to earn and save for things by working. Create a system that encourages them to complete specified chores from a young age. This role-playing may seem silly, but it’s one of the best ways children learn the value of a dollar. These lessons will come in handy when it’s their turn to buy gifts for others.
Before you begin perusing catalogs and placing orders, write a list and include everyone you plan to buy a gift for. Consider the recipient’s personality when deciding on a present. You probably already have an idea of what they like, but include a second and third option so you have an alternative.
If the first option item is out of your budget, go for the second or third pick — no need to go back to the drawing board. You have nothing to be embarrassed about if your present costs less than $10. Most appreciate the thought more than what's inside the wrapping paper.
Aim for things that get the most value for the price. Family games that can be played endlessly can make for fantastic long-term gifts. Gadgets and devices that will be used every day can make for big quality-of-life improvements for the people who receive them. Short-term gifts like baked goods and scented candles can be great as well, but you don’t want all the presents to be gone by January.
Clothes are another great gift choice, especially for gifting your young kids. Since you’ll likely be purchasing their clothes anyway as they continue to grow, dedicating some of your gift budget to outfits you know they’ll like can save you money down the line.
However, avoid low-cost fast-fashion options, which seem like a bargain but come with significant quality concerns. The clothes rarely last long and will ultimately cost you more in the long run. What’s more, some products from fast-fashion outlets have been found to contain unsafe concentrations of lead and other chemicals. Opt for sustainable brands or high-quality pieces that will last beyond the first five wears.
One tip to get the first dibs on offerings is to sign up for website newsletters. Big stores, like Amazon and Target, use them as part of their holiday marketing strategies. They give deal priorities to subscribers or members of their loyalty programs.
Most e-commerce sites offer holiday sales promising significant discounts or promotions like “buy-one, get-one free” for a limited time. Watch out for these deals to score Christmas gifts on a budget.
Track your spending to help you stay within your budget. This is especially important if you buy for multiple kids and family members.
One trick that allows you to observe the gift-giving tradition while still keeping spending within your means is organizing a Secret Santa among the adults. Everyone draws a name from a hat and gives a present to the person they pick. The best part is that you only have to buy one gift but everyone receives one.
Here are three more practical strategies you can apply to add a little more to your holiday gift fund:
The best holiday memories come from spending time with loved ones, not from spending money on gifts. With a little planning and creativity, you can make the season special for your family while staying within your means.
Jack Shaw
Author