1. Set a Spending Plan Before the Season.
In the Meakem Group’s Four Buckets system, holiday gifts are a Bucket 2 expense (Meakem Group Bucket 2: Escrow Fund). You know they are coming and you can plan for them! In addition to gifts, don’t forget to plan for travel, parties, décor, and charitable giving.
2. Focus on the Experience, Not the Price Tag.
Many people’s favorite holiday memories involve time spent together, not expensive gifts. Consider family outings, homemade or sentimental gifts, and doing acts of service together.
3. Avoid Using Credit as Part of the Spending Plan.
Using a credit card for convenience or to collect points is one thing. Using it to spend money you cannot repay quickly is another. If holiday purchases will take months to pay off, consider scaling back.
4. Establish Family Expectations Early.
Open conversations can prevent financial stress. Family members may welcome spending limits, “pick a name” systems, or more of a focus on shared experiences. And setting expectations will help set an example of financial discipline so when it is your kids’ turn to rein in their adult spending, they’ll know how it’s done.
5. If you have a group of friends or acquaintances who tend to buy each other impersonal gifts or gift cards each year, consider a theme or something creative to shake up the monotony, expectation, and expense.
A “gift exchange” could be exchanging lists of all-time favorite books, movies, or bucket-list activities. This kind of exchange can lead to shared experiences and deeper relationships, a gift that lasts throughout the year.
6. Start Saving for Next Year.
After the holidays, estimate what you spent and divide that amount by 12. Setting aside a small amount each month can make future holidays much less stressful.
Remember to spend according to your financial goals, not according to others’ expectations. A meaningful holiday season doesn’t require overspending, and the best gift you can give yourself is avoiding financial stress in the new year.
For more details, check out the tips we posted a few years ago: https://meakem.savvyadvisormarketing.com/five-ways-to-be-smart-about-holiday-spending/.