Money Etiquette: Sticking to a Holiday Budget Without Being a Scrooge

From presents to parties to poinsettia, researchers at Magnify Money, a personal finance website, found that Americans with debt sank an additional $986 in credit card debt over the holidays last year.

This holiday season consumers seemed poised for yet another shopping spree. The National Retail Federation estimates retail sales in November and December will jump 3.6% to $656 billion.

And let’s be real. Partly to blame for our spending? Social pressure. We feel like we don’t have any other choice because, well, tis the season to give, right? And if you don’t give, you’re a Scrooge. In fact, a 2015 survey found an increasing number of shoppers admitting to falling prey to the seasonal pressure to spend beyond their means. About one in three also called the holidays more “financially stressful,” than the previous year. Pressure is building!

So is this just the way life has to be?

Of course not.

Here are 6 ways we can realistically keep a lid on spending (in some cases, spending nothing) without feeling guilty and maybe even coming across as pretty cool.

1. Propose a Limit with Family

If buying presents for all your family members is keeping you in a cycle of debt, it’s time to speak up – and soon. Don’t wait until Thanksgiving. Try sometime in early November when most people have yet to really go down their shopping list. Turn to whoever is hosting the family party that year and suggest an alternative to the usual gift bonanza. Try a line like, “I would love to suggest a twist on gift giving this year. What if we all picked names out of a hat? It’s so hard trying to get all the gifts figured out for everyone this time of year. And this way, it’s a great way for all of us to save. I’m actually trying to [insert financial goal: e.g. pay off my student loans] and could really use the savings.”

Who can argue with that?

And I’m willing to bet that if you’re feeling like your family gift tradition has gotten out of hand, you’re probably not the only person with this sentiment. Be the brave relative to suggest a Pollyana or Secret Santa where you draw a name and buy a gift for that family member only and usually below a certain agreed-upon amount (e.g. $50 or $75). One gift and you’re done and everybody gets to open up a present.

2. Gift an Experience or Your Skills

Your expertise or skill can serve as a great present for friends and family. From web design to yoga and painting, turn your craft into a gift for someone who would most appreciate it. For example, my sister-in-law is a phenomenal photographer. In a recent holiday year, she surprised us with the gift of beautiful portraits of our son (whom she had photographed in adorable Santa clothes unbeknownst to us while babysitting him one day). And while she, of course, did pay for the developing and framing, I suspect it would have cost more to buy us stuff from the mall that we didn’t need. This gift, instead, showcased her magnificent skills as a photographer and it was delivered in the most meaningful and touching way. It was priceless and remains one of our favorite gifts ever.

3. Regift…But Within Reason (Read: Rarely)

Re-gifting has its place and time and should be done carefully. Don’t look at regifting as a way to just save money and de-clutter your garage. First and foremost, your decision to re-gift a personal item – especially if it’s been opened or slightly used – should be based on whether the recipient would actually love to have it. A first edition book of an author they admire that’s just collecting dust in your library is a good example of an appropriate re-gift. Also acceptable to regift: a family heirloom that you’d like to pass on to another family member.

4. Don’t Feel the Need to Reciprocate

If an acquaintance or co-worker you’re not really buddies with gives you with a present – and you’re completely caught by surprise – you don’t need to do the same (even though you may feel compelled to reply, “Oh thank you! Uh, I have your gift at home! (not)). Next thing you know you’re running to the mall and trying to match their gift, only adding to your credit card balance. Just offer your thanks and follow up with a hand-written card and maybe treat him or her to a drink at the next happy hour.

5. Pay with Points

One way you can wisely use your credit card this year is by cashing in those racked up points and buy presents with them. Make a note of retailers that may have special relationships with your card issuer that my offer cardholders more spending power per point. You may also be able to purchase retailer gift cards with your points, which could make for great gifts.

6. Gift Those Who’ve Made Your Life Easier or Better or Both

If you are going to buy gifts this year, be sure to reserve some of that budget for those who have worked hard to bring joy to your life or have made your year better. People like babysitters, teachers, coaches, etc. No need to go overboard but do show your appreciation in the form of a thoughtful gift. Something homemade, even.

 

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at editor_mint@intuit.com.

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.