The Art of Gift-Giving: How Much Should You Really Be Spending?
Gift-giving is a beautiful thing. But the execution of those gift-giving ideas isn’t always as fun as what you may have conjured up in your mind. Somehow, the pressure of making sure you’re properly gifting begins to riddle you with stress. Are you giving the right gift? Are you spending enough? What if you’re spending too much? Ugh.
First, a piece of advice — pump your brakes. Relax a little bit. Figure out exactly for whom you wish to buy gifts, then take a look at your budget. This is key, people. Yet somehow, the “keeping up with the Joneses” mentality has a tendency to take over when it comes to gift-giving.
According to the National Retail Federation, a person spends an average of $967 on gifts during the holiday season, not to mention all the other gift-giving occasions that pop up throughout the year. For some, spending $1,000 or more every year on presents feels reasonable, for others, it doesn’t. The bottom line? You’re primed to overspend. So, here are a few ways to determine how much you should be spending on the people in your life.
1. Make a solid list
Winging it when it comes to who’s receiving gifts will make the giving process a bit more difficult. Instead, grab a notebook and write out exactly for who you wish to purchase gifts.
Once you’re finished with that process, categorize the list. Inevitably, you’ll have your family, close friends, co-workers, maybe your babysitter, charitable recipients, and maybe even the pooch. Once you break out the categories, stick to a numbered amount that you wish to spend and tally it up.
2. Avoid credit and only use cash
An alarming 52% of Americans anticipate going into debt over holiday shopping. What’s even crazier, some individuals are pulling money out of their 401(k). Huh? Why? The notion that you want to create a spectacular holiday experience for your family and friends is lovely. But that experience can be achieved without incurring credit card debt or tapping into savings and retirement funds.
One rule of thumb to always follow, no matter what the gift-giving occasion, is this. If you can’t pay for something in cash, you can’t afford it. Assess exactly how much cash you can afford to spend, withdraw it from the ATM, and once it’s gone, your shopping is complete.
3. Suss out your budget
You’ve made your list, and you have cash burning a hole in your pocket. Great. Now it’s time to suss out how much you’re spending on each person. If you’ve tallied up your list and realized that you don’t have enough cash to support your original endeavors, it’s time to make some edits.
Perhaps you initially estimated that you could spend $20 to $40 on your close friends or co-workers. It’s perfectly fine to pull back on that number. Instead, only spend $10 to $20 this year.
4. No one really likes the Joneses anyway
Ever heard of animal brain? It’s the idea behind the “keeping up with the Joneses” mentality. Essentially, humans search for the green light from their peers to validate their social and economic status. For reference, nearly half of Americans are spending outside of their means.
This pack mentality of spending more because the Joneses spend more will only send your finances into a downward spiral. Focus on how much you can afford to spend on gifts and avoid being derailed by the assumed expectations of others.
5. Give only 1 gift
So much of the pressures around gift-giving stem from within. It’s not unusual to feel the need to throw in additional little gifts for your people. Don’t fall into the trap of compounding multiple items for your friend or co-workers gift. Whatever you choose will be appreciated. Plus, the simplicity of selecting just one item will eliminate the need to scour the Internet or run all over town searching for something else to add in.
6. Track your spending
It’s easy to lose track of your spending. Everyone is guilty of it. But this is where the rubber meets the road. Stay within your budget by tracking how much you’ve spent. If you opted out of withdrawing cash and have chosen to spend via debit card, tracking can be more difficult. As you purchase gifts, write down how much you’ve spent on your list and check off the person’s name once complete.
7. It really is the thought counts
People always toss around this little phrase, but it’s so true. Sometimes, it’s the mere thought that counts the most. Sometimes, a handwritten card is all that needs to be given. Or perhaps you gift your close friend or spouse an item that may not cost much, but identifies the connection you share. These gifts can be much more special than a gift you find on Amazon.
At the end of the day, a person should never set expectations for what sort of gift they believe they should receive. And you shouldn’t feel any pressure to meet another’s expectations.
8. If all else fails, opt for a non-traditional approach
Many families opt for a non-traditional approach to holiday gift-giving. After all, there isn’t a rule book defining how things should be done. For example, some families put everyone’s name in a hat. Each person pulls one name from the hat and only buys a gift for that one person. This approach makes giving more fun and takes away the pressure of buying for everyone in your family.