It is approaching the end of the year and many holidays are about to begin. According to the National Retail Federation, Americans spent over $1 Trillion on Christmas in 2019. That breaks down to 27% of Americans are going to spend over $100 on gifts, and 58% will at least spend over $500 on Christmas gifts. This all adds up pretty quickly. (Investopedia). Unless you are planning on not taking part in the holiday, you can easily spend more than you like.
Find your true Christmas Gift Budget
With most financial decisions, it is important to set a budget you are comfortable with and do not deviate from your financial goals and responsibilities. Try to avoid the top dollar budget approach on Christmas gifts. This means for example do not say I can spend $800 on Christmas gifts because any more will be too much on my budget. Instead, determine some factors described in the article below such as shopping and saving early, getting creative, make a list and most of all have fun with your loved ones. Do not get me wrong, it is good to know your top dollar but find what is your true budget. You might find you truly only need to spend $600 for example this year on Christmas gifts.
When starting on your Christmas gift shopping it is best to start early. Starting early will give plenty of opportunity to shop around. When a sale comes along for a gift you were looking for, you can take advantage of those savings vs a last-minute purchase with higher markup.
Starting early also allows for proper budgeting and savings for your Christmas gift budget. If you can put away $50 dollars a month starting in January, you will have $600 dollars by December. Budgeting and saving early plus leaving time for finding sales will help maximize your spending and your Christmas gift budget.
If you have little time left to save and budgeting for Christmas gifts, remember it is never too late. Make a plan and start today.
Make a list
Just like Santa, it is best to make a list and check it twice. Start with the names you want to give gifts to. It could look something like this:
- Immediate Family (Children, Spouse)
- Close Friends
- Extended Family
- Neighbor and Other friends
Then set who is a must have and how much money you want to allocate to whom. It could be something like this:
- Children (15% – varies based on number)
- Spouse (20%)
- Parents (10% each)
- In-Laws (10% each)
- Close Friends (5%)
These numbers are just suggestions but play around how much you want to give and even what you want to give this year for Christmas gifts.
Be Gift Smart
With your list set and starting early will help you save and maximize your gift giving on Christmas while being budget smart, but there is more to it. You can easily go overboard on gifts. Remember, quantity of gifts does not always mean better gifts. A high price gift might be nice but might not be the gift that person wanted. When it comes to gift giving find gifts that meet what you can spend on that person plus something they want. This could be as simple as giving Starbucks or Amazon gift cards. Maybe its giving your neighbors and friends some homemade baked goods so you can spend your extra money on your spouse to get that gift they really wanted. Be creative, spread joy and happiness with your Christmas gifts while being friendly to your wallet.
Giving a Christmas gift does not always need to be something off the store shelves. Sometimes making a gift personally will mean more to the person receiving the Christmas gift. Maybe this year get a custom ornament made with a picture on it. I know one of my wife’s favorite things to give out is printed pictures in a picture frame that means something to that person. Make some of your famous chocolate chip cookies or come up with some clever ideas from Pinterest. Other creative things you can do is give experiences as a Christmas gift. Maybe offer to take your father out to something he likes to do with you. Not only do these gifts help with your Christmas gift budget, but often mean more to the person you are giving them to.
Give From the Heart
No matter how you do Christmas gifts this year, remember that Christmas is a time to spend with loved ones. Staying on budget on Christmas gifts is important, but remember when you give those Christmas gifts to do it with a joyous heart to the ones you love.