In 2020, most of us stayed home and skipped the traditional holiday get-togethers. While that didn’t make for a fun holiday, a lot of my clients have been comparing 2020 when they “saved so much money” to last year where their spending was “way out of control.” If you’re anything like most of my clients, you are probably finding that your spending has been a bit larger than usual thanks to a feeling of wanting to “make up” for 2020. The fact is that holiday spending, for any holiday, can go off the rails thanks to an abundance of advertising, social pressure and media pressure to spend without thinking as a way to show status or affection or to fulfill a sense of gift-giving duty. 

The following six tips will give you a new approach to thinking about holiday spending and help you maintain your financial goals while keeping things celebratory. 

Take a hard look at your actual financial situation

Do you have a budget for gifts? As in, do you actually set aside a certain amount of money into a savings or checking account each month specifically to pay for gifts and special occasions? If you’re like 99.9% of people, the answer is no. That’s completely okay, but what it means is that you will have to either cut back on your typical daily spending, monthly saving or monthly investing to cover these costs; or you’ll have to cover these costs on credit. 

Taking this initial step to stop, assess where the money will actually come from, and then reckon with what that will mean for your finances for the next, potentially several, months will give you the perspective you need to guide you while you’re taking the next steps in this list. Get realistic about how much you can actually afford to spend and let it be okay if that number is small. Whether the number is small because you just don’t have a lot of cash available or because you’re actively trying to achieve a different financial goal, it’s always okay to acknowledge that sometimes you just don’t have the extra to give. 

Determine what you want the gifts to mean

Our society insists on obligatory gift-giving for a veritable cornucopia of holidays and occasions. Think about it – we’ve got Valentine’s Day, Administrative Assistant’s Day, Mother’s Day, Father’s Day, Christmas, Hanukkah, Kwanzaa, birthdays, weddings, baby showers, host gifts, teacher’s gifts, gifts for your kids’ classmates, and on and on. 

A lot of us have internalized the need to give these gifts without ever thinking about what they actually mean, why they’re important to us, or if they are important to us at all. If you take nothing else from this article, I urge you to listen to this—when it comes to spending your money at any time, whether it’s for gifts or anything else, know WHY you’re doing it. If you’re going to buy someone a gift, buy it with intention. If giving the gift doesn’t mean anything to you other than fulfilling some socially-dictated obligation, maybe you would be better off just sitting this one out. If you do choose to buy a gift for someone (or even if the social pressure just gets too great and you feel like you have to buy a gift for someone), really think about what you’re giving them and why you’re giving it. It’s easy to just reach for the latest gadget on Amazon, but maybe a box of their favorite chocolates would do while feeling even more meaningful.

Make a list of gift recipients

The next step is to know who you actually need to give gifts to. Especially during a time like Christmas, we have a tendency to end up buying a lot of “surprise gifts.” As in, “Oh shoot —I didn’t know I was expected to give something to the mailman.”

Make sure to sit down and really think about a list of people to whom you want to give gifts during any season in order to avoid these surprises. And then, stick with the list! If you didn’t write “mailman” on the initial list, don’t let some sense of societal pressure force you to add him later. I’m sure he’s an awesome guy, but that means he has people who are actually part of his life who will give him gifts. 

Divide the money you have available across the number of recipients on your list

This is the math part now that you know how much money you have to spend, where it’s going to come from, what you want your gifts to mean and how many people you want to give gifts to. You can literally do some simple division to get a cost average of gifts. This is essentially where you get to figure out if you’re realistically giving people things from Target or Barney’s. 

If you can comfortably pull $1,000 from your budget (ideally not on expensive credit) and have 10 gift recipients on your list, then your average gift cost is $100.

Determine if you want to give a larger / more expensive gift to a certain recipient on the list

What if there is that one person on your list who deserves something a little extra special? If you know that every year you end up wanting to get something a little over-the-top for your spouse, parent, kids, or whomever, factor that in up front. Does 50% of your gift budget need to go to that special person? Factor that into the math. In the example we started above, that means you’re shopping at Bloomingdales for the special person and Marshall’s for everyone else.

Realize that it’s literally not about the money spent, but the thought given that truly counts

The phrase “it’s the thought that counts” is 100% true. A diamond tennis bracelet is nice, but sending the kids to grandma’s house and creating a breakfast-in-bed experience for your spouse could be even better. The newest toy will be fun for an afternoon, but drinking hot chocolate and singing songs is a memory for the kids that will literally last a lifetime. 

We have a tendency to spend money out of obligation or expectation. Just like with the way we may choose our car or home, sometimes we give a certain gift just for the optics because we think they make us look good. I urge you to slow down any holiday season, and beyond, to really think about your recipient. What do they need, what do they want, what type of experience can you give them? Often, it’s the smallest things that can make the biggest impact.

Bevin Morgan is a Financial Trainer at The Financial Gym who has paid off over $200K in debt to become debt free. She is a real estate investor and self-proclaimed personal finance nerd. She specializes in helping Black female entrepreneurs and creators gain confidence in their financial futures with a touch of woo woo. She is on a personal mission to help bridge the racial wealth gap in this country. Black families hold less than 10% the average wealth of white families. Instilling financial confidence in Black women is one small step she’s taking to help change that. 

Find her at www.bevinmorgan.me or on Instagram, @bevinmorgan.

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