by | Oct 27, 2023 | Personal Finance | 0 comments

Did you know that the average American spends around $1000 on holiday gifts each year?  

Regardless of whether that number seems low or high to you, there’s no denying that holiday spending has the potential to “gift” you with a holiday hangover just as much as it can bring you holiday cheer.   

But a hangover can be avoided!  Let’s explore 4 straightforward steps on how to manage your holiday spending, NOT go broke this holiday, and still have a meaningful season. 

Be a holiday S.T.A.R.  

  • S = Story 

First, you need to think about what story you tell yourself about the holidays and how things “should” go.  (This is digging in a little deep to begin with, but I know you can handle it.)    

What story are you expecting to unfold over the next several weeks?  How do you feel about that story?  Do you compare your story to someone else’s story?  

We all have some expectations going into this time of year.  Giving yourself some time early in the season for a little healthy introspection could help you enjoy the season more.  Are there any attitudes or expectations that don’t fit anymore?  Maybe you still find joy in revered holiday traditions.  Or maybe some no longer work for you.  Is there anything you’d like to let go of?  It’s like taking out the old holiday decorations, dusting them off, and looking at them with fresh eyes.  The result could be a brighter, more meaningful holiday.   

  • T = Target 

This step is where the dollars and cents come in.  Having a holiday budget, or target, can not only help to keep you out of trouble; it can also motivate you to get creative!  Stick with me.  I like to create an Excel spreadsheet (nerds unite!) but if you cringe at the word “spreadsheets,” you can keep a list in a notebook.   

Here are the items to track:  

WHO: the friend, the family member, the charity, the neighbor… where is your money going?  Sometimes just creating this list can be surprising.  If you’ve never done it before, you may suddenly realize how many people are on your list and how many gifts you’re buying in the first place!  This can lead to a helpful tune-up.  Does the neighbor really need another gift card?  Or might they like some homemade jam instead?  Have you really heard from that distant cousin in 10 years?  Maybe you can leave them off the list this year.   

WHAT: I like to write down the item I actually give each year.  This helps to jog my memory so I avoid duplication (awkward!) and so I can remember what each person likes.  I also use this as a place to hold ideas early in the season, to help focus my shopping later.  For example, if I notice my mom admiring candles, I’ll jot that down.  Then when I’m out shopping later, I can consult my list instead of staring blankly at the shelves and buying something uninspiring.  Finally, this step can help keep me in line and accountable to myself, much like taking a list to the grocery store can prevent impulse purchases.   

HOW MUCH: I have 2 columns for this; a “budget” and an “actual,” so I can see if I am on track.  I figure out the “budget” amount first by reverse-engineering.  (I warned you I was a nerd!)  Let’s say I start out with an overall holiday budget (for example, that $1000 average).  Then I break it down by categories.  Then each item in the category gets a target price.  Now I can go out looking for holiday sales!  

Kind of like figuring out a monthly budget, I can move money into different categories if I am super smart in my spending.  For example, if I find something perfect for my nephew on sale and save $10, I can add $10 somewhere else in that category and still stay within budget overall.  Doing this not only feels good; it also engages the “FUN” part of your brain so the task seems less onerous and encourages you to continue.    

Don’t forget categories like office parties or charity events or anything else that you participate in and spend on during the holidays.  Even cards, postage, and gift wrap should have a place (if you use them).  Tracking at this level of detail can help keep you mindful and aware – avoiding that holiday hangover!   

  • A = Achieve  

You can get lost in numbers, so let’s zoom back out and remember what you are trying to achieve in the bigger picture.  Why are you giving?  Remember the season doesn’t have to be a giant gift fest.  What do you want each person to feel or experience?   

Do you want to delight a friend with a surprise?  Make them laugh?  Introduce them to a new product that you love?  Do you want to support a local business or a charity?  Do you want to express gratitude or appreciation?  Make a statement?  Getting clear on what you are trying to achieve with a gift can be truly helpful.  It can serve as a guide to direct your decisions and expand your thinking to get un-stuck from old habits, if necessary.   

  • R = Resources 

Not everything has to be purchased at a store.  What about making something that’s heartfelt and homemade?  Someone once said that “love equals time.”  I know that during the holidays that it can be very tricky to carve out time for anything, but it’s also very fulfilling.  And it might help you achieve what you are really trying to say with a gift.   

For example, have you ever made cookies with a child?  That could be one of their best memories ever and it doesn’t cost that much (or get lost or broken after New Year’s).  As a young adult, I used to like to write parodies.  One year I created a parody of “Twas the Night Before Christmas” using the current year’s events and it was a huge hit among my family!  All it took was a little time and creativity.  No budget required.  

What do you love to do?  Painting?  Baking?  Gardening?  Fixing tech?  Have you considered sharing that as a gift rather than going out and buying something?  It could be a worthwhile exercise, not only for your budget, but also for your relationships.  Meaningful gifts go a long way throughout the year.   

And there you have it!  How to avoid going broke, have a meaningful season, and become a holiday S.T.A.R. in 4 mindful steps.   

I hope this helps you to stress less and enjoy the holidays more this year.  Enjoy!