When Holidays like Christmas or special occasions like Birthdays come along, it's really easy to get caught up in the gift giving euphoria and overspend. After the Holidays have passed, you're left with the regret of destroying your budget and blowing through your savings.
You might actually be surprised that you're not alone to feel this way. I did for many years until I made a personal decision to make a change with spending and gift giving that has changed my life for the better. I'll be sharing some of my personal tips and strategies with you in this post.
Gift Giving Obligations
I want to talk about why we give so many gifts at Christmas and other holidays first. If you were raised on this tradition and your family practices it, you almost reach a point where it's required to have an extravagant spread of presents under the tree. Failing to be able to buy these gifts can cause you to actually feel depressed, and yet the end result causes more depression from the money spent that you could've used in other ways.
Friends and especially family feel obligated to give each other presents for the holidays and other special occasions. This is especially true for immediate family members like your mom, dad, brothers, sisters and kids. It may even apply to extended family likes uncles, aunts, spouses, cousins, grandparents, grandkids and more. In some families, this can end up being an overwhelming number of people. Trying to buy presents for everyone will simply break the bank unless you make a lot of extra money.
Think about the amount of cash that you typically end up spending on Christmas each year. Now multiply that number by the number of families that get together for your Christmas gift exchanges. There's a pretty good chance that the total amount is staggering, and your family spends that every year. Couldn't that money be better used elsewhere?
Peer Pressure Gifting
I had a couple of Christmases in the early years of my marriage when I was completely broke. We would all gather at my dad's house each year to exchange presents and enjoy a meal together. Showing up empty handed without a single gift to give to anyone else was demoralizing. My wife and kids got presents from others, but nobody received anything from us. We were lucky to even have things under our tree back home for the kids.
After working really hard for years, I started to make better money. Then I went on a Christmas present shopping spree to be the big shot and also to make up for years of not giving any gifts. Everyone was happy with the things I bought, but I later started to realize just how much money was blown and whether it was really worth it.
I personally enjoy gift giving and making others happy by providing them with the things they want. However, it's really become much more than that in recent years. It feels more like an obligation. Even worse, it feels like a really bad financial decision that wastes thousands of dollars every year. That same amount of money contributed to a retirement account each year would serve a much better purpose.
Talk with Friends & Family
If you feel like I do about gift giving, you might be afraid to say anything about it to your friends and family for fear of looking like a selfish and heartless person. However, you might actually be surprised at how many other people close to you feel the same way.
Personally, I highly recommend trying to talk to anyone that you exchange gifts with each Holiday season. See if they're concerned about their own spending habits and discuss yours with them too. At the very least, this makes it clear that it's really more about money and not about a desire to avoid gift giving and the holiday spirit.
When other people in your family feel the same way, everyone can band together and a make a decision to put an end to the crazy spending. The Holidays can be really enjoyable and all about family without having to spend money on a single present. With everyone on the same page about this, you can eliminate the peer pressure that is likely the main reason that people overspend in the first place.
Secret Santa / White Elephant Exchange
For some families, Christmas and the holidays just doesn't feel the same if you completely avoid gift giving. Luckily, there is a way you can have the best of both worlds - still exchange presents but not deplete your bank account in the process.
Secret Santa or White Elephant gift exchange games are the perfect solution. Let's say you have 20 people in your family, including you, and everyone normally gets a gift for each other person. That's 380 presents! With secret santa, you can reduce that number of gifts to just 20.
The strategy behind this tip is quite simple. Put everyone's name in a hat and have each person pick a name. My family likes to do this when we all get together for Thanksgiving, that way everyone has plenty of time to pick out something. It also lets people take advantage of Black Friday or Cyber Monday sales, for those that like to go shopping right after Thanksgiving. When everyone gets together for Christmas, you go around the room exchanging gifts.
What is Christmas and the Holidays really about? For kids, they might be all about presents. However, the Holidays are really more about spending time with family and those you love. That doesn't require you to run yourself ragged shopping while spending all of your savings.
These days, I still provide a great Christmas for the kids, but I've drastically cut back on spending elsewhere. There have been numerous years recently where I haven't given a single gift except to the kids, even when I had the money to go all out. To be honest, I've enjoyed these Holidays a lot more than I did when it was all about gifts.
Sometimes when you can eliminate the gift giving, you're left with more time to focus on the other things that are more important but may often go overlooked. You can make your family feel like they're the only thing that matters in the world without spending a penny on gifts.