As a financial planner it feels almost mandatory that I address the topic of holiday spending. Amid all the advertisements and holiday specials you likely have seen plenty of articles on how to cut back this holiday season. That is not (entirely) my message here today. But, I do see that this season causes extra stress for a lot of people, including financial stress.
I have no desire to be a wet blanket or to ruin anyone’s enjoyment of the holidays. If people are spending money they can afford and it feels good to them then that is awesome. Unfortunately, a lot of folks feel external pressure to spend beyond their means. It is a season of more: more food, more alcohol, more spending, more socializing. But more does not always mean better and it does not always bring joy. I would never say not to spend money at the holidays. But I do encourage everyone to spend with intention and purpose.
Holiday Spending or Christmas Spending?
We have all been conditioned to say “holidays,” as if we are referring to a multitude of holidays, even when the focus is really on Christmas. I do completely support schools and other institutions promoting inclusive language and attempting to highlight traditions from different religions and cultures. I also recognize the hypocrisy of many Christians (such as myself) sending out “holiday cards” in mid December once Hanukkah has already concluded. Kwanzaa does run from December 26-January 1, but I am unaware of Muslim or Buddhist holidays this time of year.
Celebrating “the holidays” often seems like an empty acknowledgment that not everyone is Christian, without requiring any actual changes to Christmas traditions. It feels a lot like the treatment of women in business. We are trying to pretend that those with non-dominant identities are simply a variation of the dominant group. We are trying to change the packaging without altering the content. This is particularly true for non-religious individuals of Christian heritage since we don’t even have to make an effort to leave Jesus out of the conversation.
I want to be explicit that when I reference “holiday spending”, nearly all of my personal experience is limited to Christmas spending. The topic of money and holidays, however, does apply to holidays of any religion that focus upon gift giving and large celebrations. This is not necessarily limited to December holidays, though that is certainly what gets the most press.
Holiday Traditions
People from all walks of life grumble about how the season has been lost to commercialism. Religious individuals will complain that the true meaning of the holidays are overlooked. Anti-capitalists decry the materialism and environmentalists condemn the waste.
Yet, many of us still participate in the same conventions that we complain about. It is so hard to break the habits and buck the societal norms. I, personally, lament that my child has more toys than he needs. And then I say “but Santa has to bring toys, I can’t disappoint him.” I think about toning it down in other ways but don’t want to give up any traditions. I love the smell and sight of a Christmas tree. The cookies we only have once a year that remind me of my childhood and relatives who have passed. Exchanging holiday cards with old friends and family makes me feel connected to loved ones, even when busy lives and diverse geographical location keep us apart. And, so, my holiday spending continues at higher levels than I would prefer.
Can we balance our desire for the comfort of holiday traditions with the stress that comes from managing it all? How do we separate what we are doing for joy from what we are doing out of duty? How do we know how much we should spend and where we should spend it?
These questions are all interrelated. We need to listen to ourselves and our bodies to recognize what truly matters to us. Also, We must consider our loved ones and what they prioritize. We can reflect on prior holidays and what brought true joy.
Recently I heard someone say that she only enjoys Christmas decorations for the first few days they are up. After that, she begins to focus on how much work will be required to take them down again. This is such a helpful realization because it is providing her with the information that holiday decorating may not worth the time, energy, or money for her. It is causing more anxiety than joy.
Areas of Holiday Spending
It is helpful to consider holiday spending in terms of categories. The types of spending that come to mind for me are
- Gifts
- Decorations
- Food
- Entertainment
- Clothing
- Travel
Not everyone will have spending in each area. We will all prioritize the categories differently. When we contemplate our holiday spending it is easy to leave out entire categories or subcategories of expenses. We forget about the cost of hostess gifts (I need to find a non-gendered word for that). We don’t consider the new outfit we buy for a holiday party. But, all of these expenses add up and can result in spending in excess of our holiday budget.
Like with all spending, each persons appropriate level of expenses will be very individual. The first question we should all ask ourselves is “can I afford to spend this money without causing myself financial harm?” If purchasing gifts or attending an event will increase debt or bring difficulty in paying bills come January, then I would encourage that individual to seriously evaluate the necessity of those expenses. Some expenses may be things we can decide to eliminate entirely. For example, you may decide to skip the nutcracker this year if the tickets are not within your budget. Or maybe you don’t really need the matching holiday pajamas. Other expenses may be things we can reduce, such as purchasing less expensive foods for a holiday meal or buying the 4 ft rather than the 6 ft Christmas Tree.
If you can afford to spend the money, it is still important to ask yourself why you are doing so. If it is an expense that provides value or brings joy and it is within your budget then, by all means, go ahead. That’s what money is for! But, if you are spending out of feelings of obligation or habit, then try examining the expense further. Is this really the best use for your money? Are there other ways you could spend the money that would provide greater satisfaction? Are you spending because you want to or because it is expected?
Gift Giving
Many people equate holidays with gifts. For me, purchasing gifts is easily my greatest holiday expense. In addition to the financial aspects, gift giving is also the area that causes me the most stress. I want to give gifts that are meaningful and desired by the recipient. Giving just for the sake of giving creates waste and clutter. I am also conscious of how shopping for gifts affects my finances. Trying to find the right gift for a lot of people takes enormous time and energy.
Give Fewer Gifts
One way to avoid breaking the bank when holiday shopping is to shorten your gift list. Do you really need to purchase a gift for everyone in your office or the cousin you only see once a year? Often we buy gifts because we feel like it is expected. But, maybe it is time to change the precedent. Try discussing the gift exchange beforehand. You may find that the other person is just as glad to stop exchanging gifts. Within groups, including friend groups, families, or offices, randomly assigned gift exchanges (Secret Santa, White Elephant, etc.) can be a fun and frugal option for gift giving.
Within my partner’s family, this year, my sister-in-law took the initiative to approach me about gifts. She suggested that we only by gifts for children since the adults do not really need anything. Or, if we do, we just buy it for ourselves. She was concerned I would be disappointed. Instead, I was thrilled to have one less demand upon my time and money. For us, reducing the gifts increases our appreciation for the holiday.
Set A Budget
Another way to cut spending is to set a gift budget before you begin shopping. Decide how much money you can afford to spend, in total, on gifts. Make a list of everyone to whom you wish to give a gift. Assign a dollar value to the gift(s) for each person. If your total amount exceeds your total budget, then look to where you can decrease the assigned amounts. Not only will this method limit your spending. It will also eliminate that buying frenzy that happens when we are making extensive purchases. It is so easy to think “I just need one more thing.” Having a pre-set list with names and amounts will provide you with explicit instructions on when you are done shopping.
Homemade Gifts
Handmade gifts are another way to decrease your holiday spending. I know, I know, this suggestion makes me shudder a bit too. Every time I read this idea I think “yeah, sure, I am already overextended. How can I make gifts?” I recognize that not everyone has the time. And often the same people without the money to buy gifts also don’t have the time to make them. Additionally, I do understand that if you make the gifts for your twelve year old they may never speak to you again.
Still, hear me out! I think this idea does have merit for certain people and situations. Homemade gifts work particularly well if you wish to give a lot of token gifts. Food, such as homemade cookies or canned preserves, can be a wonderful gift for co-workers or larger groups of friends. If you have children, helping them to make gifts can be a great way to combine family activities with gift giving.
For students, retirees, and others with more time than money, Commitments of time also make a great gift. Promises for coffee dates with grandma or to babysit from your brother may be a lot more valuable to them than a coffee mug or candle.
Allign Gift Giving With Personal Values
One thing that I have tried to do this year is to align my gift giving with my values. Rather than purchasing items mass produced from big box stores, I made a large portion of my purchases from businesses owned by women and/or people of color. For that person who has everything, I have also made donations in their name to a favorite charity in lieu of unneeded gifts.
Anyone on my personal Christmas list knows that I don’t have gift giving all figured out. I know there are plenty of ideas I am leaving off my list. My point is that capitalist societies promote expensive and excessive gift giving. That does not mean that we need to bankrupt ourselves in order to meet those expectations.
A Belated Message
I recognize that I am addressing this topic a bit late. Hanukkah is over. Many people are done with their Christmas shopping, decorating, etc. Holiday parties have already happened. But, this is not a one time deal. Next year we get to do it all over again! So, even if you make no changes this holiday season, it is a great opportunity reflect upon the experience.
Are you enjoying the parties, events, decorations, food? Do the gifts you give make you feel good. Or do they feel hollow, overlooked, or stressful. Will you get credit card bills next month and feel remorseful? Or will you think fondly of the recent festivities and consider it money well spent?
Let’s try to observe and make note of how the holidays affect us. If something brings you satisfaction than remember that for next year. And, if something causes you distress, unhappiness or hardship, add that to the column of traditions or habits to revise in the coming seasons. Unfortunately, for many of us, money is a major source of stress in our lives. A season that encourages us to spend more than we can afford will exacerbate that stress. It is important to recognize what you actually want and how you desire to spend your money rather than to let society’s expectations or your own traditions dictate your expenditures.