Planning for Gifting 2015

. November 2, 2015.
overspending_holidays

by Chris Watson

The problem is as ancient as the three wise men who tried to out gift each other with gold, frankincense and myrrh. Gift giving during the holidays often leads to budget pressure, hard feelings, wasteful anxiety, and stressful days that defeat not only the purpose of the gift, but also the point of the season.  Unfortunately, it can be anything but relaxing.

With families extended, blended, and spread out, expectations for holiday spending can be overwhelming. According to the National Retail Federation (NRF), over $600 billion was spent on the holidays last year.  The easiest way to corral our impulses during the season’s frenzy is to remember three don’ts and three do’s.

Three Do Nots

Spending behavior is driven by patterns established from our earlier life. “A good number of people in our age category have forgotten that their income years are drawing to a close,”  remarks Mary Witt, a Licensed Relationship Manager at Key Bank.  “We forget to plan for emergencies or budget for money we spend each year, like birthdays and the holidays.” Three don’ts help us relieve that old thinking and move to a better way of using limited holiday dollars.

Don’t complain, don’t compare, and don’t compromise.

Complaining during the holidays has become common. “He spends too much,” or “she always picks the perfect gift” are often driving and constant worries.  Comparisons to others. also creates pressure. Both produce a credit card bill in January that is burdensome.

This leads to the most common problem, compromising. It is easy to compromise budget, good sense, and even gift choices because of the first two don’ts.  Attempts to meet a gift expectations we compromise on the gift itself, resorting to cheaper or knock off products that end up being unused and under appreciated.

Three Do’s

How do we avoid these gift giving blues?  Remembering three principals will go far. 

Set a budget, shop locally, and seek combinations

First and foremost, set a budget. The amount spent shouldn’t effect financial stability or everyday living needs.  Large or small budget, of equal importance  is is sticking to that budget (as in do not compromise).  Surprises do arise and the person we are buying for may be seeking something that we really want to get. However, if it is not in the budget range don’t fall into the trap.  Budgets are the firewalls of our personal finances and protecting us from our own impulses.  If possible, save during the year. “I recommend to all of my clients that they have a holiday/birthday fund,” says Witt.  “These accounts are easy to set up,”        

Shop locally.

Local sources usually provide more bang for the dollar.  Most local retailers offer shipping and many offer gift wrapping services.  Buying local and shipping rather than using an on line service personalize the gift in a way that Amazon.com cannot.

Finally, seek to combine gifts.  When buying for each individual becomes too burdensome, look to buy gifts for the entire household.  Movies, food treats, board (or electronic) games, a month or two of a subscription service (like Netflix or Amazon Prime) or gifts that can be enjoyed go a long way to stretching a gift giving budget.   These occasions should be enjoyed, not stressed over. Gifts can be fleeting, but the memories we create while giving them are timeless.

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