Holiday Shopping Best Practices

Tis the season to spend tons of money on stuff we hope other people want. In return, hopefully they’re spending tons of money on us, right? Because let’s be honest, I would really, really, really love to get a Switch, Mario Odyssey, and Breath of the Wild. That’s a pretty expensive present right there. Yay holiday shopping.

I swear, I’m only slightly cynical about this stuff. I really do like giving and receiving gifts. However, it’s an area where that good intention and the awesome warm glow from giving a gift can spiral out of control. Plus, just think about it. Would you want a family member to be financially uncomfortable but get you a gift or would you rather their full, unperturbed presence? Let’s dive in to it.

Set a budget

The first thing you should do is set a reasonable budget. I like to either aim for a max amount per person or set a max total amount and work backwards to a per person amount. Personally, I aim to keep my per person amount spent under $50. My wife and I, if we include ourselves, have 15 people in our immediate families. That’s $750!

When I was still in grad school money was tighter. Then we set a max holiday spend of $400. That’s closer to $27 a person. We were fortunate enough to find gifts that fit that price range that our family still seemed to enjoy. If they’re worth spending on they’ll understand if you are less able to afford gifts.

The overarching point is that it’s important to be mindful of your spending and make sure you can actually afford it. While I hated having to spend less on my family for the holidays I appreciated being able to make my tuition payments. Luckily it was only a short-term tradeoff but if needed we would have kept it lower.

Plan ahead

holiday shopping plan

This is pretty much always going to be my recommendation for anything. Plan ahead! There are a couple of things you can do that can dramatically reduce your costs while also reducing your stress.

Save throughout the year

This one’s pretty simple. Set aside a separate savings account that you routinely put some money in for gifts. This could (and probably should) include for gifts like birthdays and anniversaries.

My wife and I use CapitalOne360 which lets us set up named subaccounts. It’s easy to transfer money to them and naming the account as the goal takes advantage of our weakness to mental accounting. We’re less likely to touch the money for other things if it’s marked for gifts.

If you set a budget up ahead of time it’s really easy to set up this kind of saving. For instance, if we wanted to save $750 by the start of December that gives us 11 months. So if we set aside $70 each month we’d hit the goal!

Monitor deals

There are of course great deals to be had on all sorts of stuff on Black Friday and Cyber Monday. However, there are tons of great deals throughout the entire year. If you keep your eyes open for discounted gifts that might match what someone on your list might want you’ll likely save money. For instance, I get my brother a birthday and Christmas gift each year. I’ve gotten him tons of great games via Steam sales that I didn’t actually gift to him until the event. Unfortunately, Steam got rid of that option this year.

Minimize temptation

yes, his name is still cookie monster
Even Cookie Monster knows

Plan ahead for what you’re getting someone so you reduce the likelihood that you’ll spot something else to buy and get it as well. Think of this like having a snack before you go to the store to get groceries. If you’re hungry you’re much more likely to succumb to the temptation of other purchases. Similarly, if you’re browsing a store or Amazon then you’re likely to buy more than you intended. Plan out what you want, go straight to it, and then close the browser or leave the store once you have it. You’ll save yourself a lot.

Non-monetary gifts

My mom loves experiences. Absolutely adores them. She’d rather get a commitment to go on a series of hikes (or a series of dog walks) than she would a physical gift. Knowing this, my wife and I tend to give her experience gifts that we also enjoy. That way, we’re saving money, spending time with my mom, and often getting exercise. It’s a win all around.

Of course, it depends on the person, but if someone in your life would love a non-monetary gift then it can make sense to err in that direction. This last bit is personal opinion, but I also think in general experience gifts are much richer and better remembered than physical gifts. Even though my wife gave me the jeans that I wear most days I look back much more fondly on a cooking class we took than I do the jeans.

Gift exchanges

My wife’s extended family reached the size where it became financially impractical to get gifts for everyone. They set up an annual exchange in the extended family where each member draws another’s name (outside of their immediate family) and sets a cap on spending. This is an awesome way to save money with everyone still getting gifts and enjoying themselves.

If your family and friend group is reaching that point I’d highly recommend setting up something similar.

Conclusion

grinch holiday shopping
But not actually- just be smart about it!

You do you. For some folks, gift shopping is the ultimate expression of affection and they would feel lost without it. That’s fine. Those folks just need to know that about themselves and plan around it. We all have those things that we value and are willing to sacrifice for.

The rest of us should do our best to be measured and intentional in our holiday shopping. Planning ahead, setting a budget, looking for non-monetary gifts, or setting up gifting structures that reduce how many gifts you give all work well. Monetary stress is real and the more we all can do to alleviate it the happier we’ll be.

You don’t have to figure this out alone. This is what we do- help streamers and young professionals make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.