How to Enjoy Financially Savvy Holidays



With the coming of fall, the holiday season is almost here.  As stores start displaying holiday products and are decorated to welcome the upcoming gift-giving season you may start feeling the joyful spirit or pressure of gift- giving.

While exchanging gifts in December was originally common in the Christian community, many other religious groups did not want their children feeling excluded and therefore started giving gifts.  With the global inclusive marketing approach, holiday shopping has changed from post-Thanksgiving to pre-Halloween.  Even before the Halloween candy has been removed from the store shelves, signs of Christmas are firmly planted down the shopping aisles.

It is easy to feel overwhelmed by the season expectations and the associated marketing and advertising campaigns.  While you enjoy being generous, it is difficult to fulfill everybody’s wishes without exceeding your holiday budget.  But do not fear being labeled “The Grinch that stole Christmas,” with just a little bit of control of the passion spending, you too can survive the holidays without feeling the guilt of Ebenezer Scrooge.

Enjoy the gift-giving season … without breaking the bank

To get off on a good foot as early as possible, choose to discuss with your friends, family members, and loved ones how you would like to handle the season.  Please remember to take into consideration that some individuals have different financial circumstances.  If it has been a tough employment year for some family members and friends, keep their financial situation in mind when exchanging gifts.  The best way to avoid messy gift-giving exchanges, just ask your family member or loved ones what is truly in their heart to brighten up their holiday season.  This will provide you with a range of options to find the sweet spot for your shopping list that may not break the bank and offer the other party a way to contribute to the gift giving season without breaking their bank.  This is what I call the balanced approach.

Please remember giving meaningful and personal gifts can have a significantly higher value than an item with a pricey ticket that misses the point.  I know this all sounds familiar, just keep in mind: the goal is to stick to your spending limits.

Okay, here are some common points to remember:

  1. Children and the holidays are tough issues.  You want to give what is on every child’s wish list, but you also have to manage your holiday budget.  Talk with the child to find out what the kid really would like for the long run and then seek out advice from the parent.
  2. Your child and the holiday is a tougher issue.   I know, almost everyone with children on the holiday list is asking themselves what should be the expected value?  As a first step, check out the toy closet before reviewing the wish list.  If last year’s gift is still pristine since the last holiday then maybe a more personal gift instead of a commercial product will be well received.  Remember, it is the surprise of the gift that truly brightens up the eyes of children.
  3. Concerning adults – keep it simple.  If you are looking at an item that will bust your budget then this is the time to show restraint.  Big kids like big toys, but they also appreciate the experience of being surprised with a gift coming from the heart.  But most importantly, keep in mind a gift can be pricey and still not be well received while a well-chosen personal gift can be priceless.  And who does not appreciate a well-chosen gift coming from the heart?

To help you with your budgeting skills, I have included one of my favorite tools, which is a simple-to-create spending table.

The goal is to create a written spending plan based on the total amount you can afford to spend without negative financial consequences.  If you create the plan on a laptop or mobile device, you can easily update it when you get a gift.  A sample spending plan is listed below:

Name Likes Gift Spending Plan Actual Spent
Child $50 $65
Spouse $50 $45
Relative $50 $55
Friend $50 $30
Total:  $200 Total: $195

Start with determining your total spending plan limit (e.g., $200).

Write down all individuals, who you would like to consider for a gift (e.g., 4 individuals).  You can take the amount of the total spending plan limit (e.g., $200) and divide it by the number of gift recipients (e.g., 4), which provides you with an equal amount per person (e.g., $200/4 = $50).

Now after going through the efforts of creating a spending plan follow-through, just remember to take the spending list with you when you go shopping.  Each time you get a gift, write down the gift behind the person’s name and list the actual amount spent.  In our case, our total actual spending ended up being $195.  This way you can be sure that you have a gift for everybody and you keep track of your finances.

You might have had the opportunity to save throughout the year because you like to be more generous or you have a larger number of gift recipients.  Regardless of how much money we have saved or how many gift recipients we would like to surprise, creating a written spending plan is always a helpful tool.  The spending plan helps us to stay within our budget.  Further, it assures that we do not forget a loved one and need to get some overpriced last minute gifts.

Take advantage of seasonal sales or year-end sales.  Be flexible and keep in mind that many items will be significantly discounted shortly after the winter holidays.  If you can postpone the gift exchange, you might get a higher quality item or a combination of items for a comparable amount as the pre-holiday gift.

Keep in mind, you can always purchase a gift throughout the year because it would be the perfect surprise for the special one.  This way we do not feel pressured to commit to last-minute shopping and getting a gift solely for the sake of the gift exchange.

Also be creative.  In addition to shopping early or late, consider creating very personal gifts.  What about a gift coupon that you will wash and detail the car for someone special?  How about an invitation for a delicious home-cooked dinner?  A gift certificate to a sunrise or sunset picnic in a scenic park?  Are you handy and could somebody appreciate your talent at the house or in the garden?  What about a gift certificate to be the pet sitter while the gift recipient is going on vacation?  How about an invitation to a museum to spend time together?  Time spent with a loved one is so much more precious than anything else.

As of today, I remember a very special person in my life who always gave me a box with my favorite homemade cookies.  Interestingly, I do not recall all the purchased gifts that I received at the same time.

Wishing you and your loved ones a wonderful Holiday Season and a Happy New Year!


Martina Beverly is a Money Smart Week Partner with the Federal Reserve Bank of Chicago.  Martina welcomes you to any of her upcoming Money Smart workshops:

Online Tools:

Christmas Budget Calculator