Saving and Spending During the Holiday Season

It’s time people! Whether you like it or not, the Holiday season will be upon us in the blink of an eye. Are you financially prepared?

“The wise man plans and saves for the future, but the foolish person squanders what he has.”


Today I will outline two basic concepts. One will touch on saving for a “traditional spending” Christmas, and the other will challenge you to do what we do… Forget commercial Christmas and develop your own idea of giving for the season.

Because it makes more sense, I will spend most of my time on the latter.

Two very differing views toward Christmas

1. Participating in the modern gift exchange culture as we know it.

The following represents the “normal” point-of-view in our culture:

  • Wait until December
  • Go buy a ton of gifts for friends, family, and coworkers — on credit, no less
  • Attend a bunch of Christmas parties
  • Exchange gifts at each one

What’s my opinion? Don’t participate. Modern gift exchanges in our culture reek of binging, excess, and indulgence. If you must participate, make sure you start saving now… You’ll need it.

If you are firmly entrenched in this camp, then create a separate fund for Holiday spending and contribute to it for the next few months so you can fund your upcoming retail extravaganza. This will help you avoid using your credit card as much as if you did nothing to prepare.

Instead of simply following the status quo, why not start thinking outside the box. Here are some reasons why:

  • You don’t really have any money. If you’re reading this, there’s a decent chance that you’re in debt. Stop pretending you have more money that you really do, and use any extra available funds to move toward financial freedom. Once you’re free from the bondage of debt, then go buy gifts with money that you actually have!
  • Most Americans don’t NEED more stuff. In most cases, our needs our well provided for, so Christmas is (more often than not) all about want want want. If that’s the case with you or your family, consider using your money for something more useful this year — like paying off your debt.

If you’re still intent on giving gifts, read on…

2. Participating in gift exchanges on your own terms.

I’ve said it before, and I’ll say it again… Break free from a culture of temptation. Live outside the box and exercise the lost arts of creativity and resourcefulness.

Here are several ways for you to change your approach toward gift giving for Christmas 2009:

  • Greatly limit your participating in gift exchanges this year. My wife and I have done this for the last several years. We give sensible gifts to our nieces and nephews, participate in one $20 gift exchange with each side of our family, and limit our spending on each other to $50.
  • Communicate with your loved ones. We’ve made clear to our family and friends that we’re not planning on giving gifts, and that we expect nothing in return. Were they upset? No. Quite the contrary. Once we spoke up, it turned out that most everyone agreed. We all saved money and focused instead on simply spending time with each other.
  • Make homemade cards and gifts. Instead of feeding the corporate consumerism monster, consider a homemade gift. Aside from being a great way to save money, boost creativity, and build your self-reliance, it’s also a great family-building exercise. Some of my best memories of Christmas-time are of making homemade Christmas ornaments, decorations, and gifts with my family when I was growing up. Give it a shot… I promise you won’t regret it.
  • Offer your services as a gift. Don’t have the time to make cards and gifts this year? Make a few simple coupons for your services and give them away to loved ones. Often times they need your expertise way more than another tie, pair of socks, or a gift certificate. Are you a computer technician? Give people coupons for a free computer clean-up. Are you a massage therapist? Give people coupons for one free massage. Are you the ring master at a circus? Give people free passes to the show. You get the point. Not only will you be helping them out, but you’ll also create an opportunity to spend time together.

Don’t limit yourself

One more thing… Don’t limit your use of this approach to Christmas. Use it for birthdays, anniversaries, etc. To give you an example, my wife just made “Tub Crayons” as a birthday gift for our friends two year old. The recipe was pulled from the Dining on a Dime Cook Book: 1000 Money Saving Recipes and Tips (which we HIGHLY recommend). It was both inexpensive and simple to prepare.

Don’t be selfish… Share your ideas with us!

I’ve just offered up a few idea here, but don’t limit yourself to what I’ve mentioned. Consider your family and friends, and think about what you can do to make this year extra special for them.

I encourage you to save your money and be creative. Make people dinner, write them a song/poem, or offer to babysit. Instead of spending your time shopping for them, spend your time coming up with a creative way to show them that you love them. I can promise you this… They’ll remember it much more fondly than they would another $15 tie from Walmart!

29 Responses to “Saving and Spending During the Holiday Season”

  1. Anonymous

    @Meg: Keep working on your husband Meg. Make sure you let him know that you are a beauty that needs rescuing from this type of modern day Christmas, and that you would love to return to habits that reflect a more simple time. You may also want to try making it into a competition for him… men love to rescue their lady and the love a good competition! Be creative.

  2. Anonymous

    What do you do when your family and your in-laws refuse to respect your wishes for gift-giving? My parents insist on getting me lots of gifts that I don’t need, and my in-laws continue to do the insanely huge gift-giving tradition even though we’re all adults. They absolutely will not listen to reason and get offended at any suggestions to cut back. Homemade gifts are out of the question because they’re viewed as cheap. My husband would rather continue the insanity as well. Help!

  3. Anonymous

    We’ve had to go the same route with Christmas in our extended families. On one side we’ve eliminated gifts for adults (but kids still get them from everyone), and on the other we’ve imposed a limit of one gift per adult in a coordinated gift exchange. The kids will still get their normal “load” of gifts, but each adult will get only one, and in turn, give one to another adult.

    The combination on both sides of the family saves each family hundreds of dollars each season.

  4. Anonymous

    Last Christmas my family tried something new. We still got new presents for the little kids (there are 5 between my 4 sibs; my kids are grown) but the rest of us exchanged used gifts we found at Goodwill or garage sales. It was really fun. Granted, there were a lot of books exchanged, but there were other fun things as well. We had to be more creative. One gift cost 14 cents! We’re doing it again this year. It was much more fun than exchanging gift cards.

  5. Anonymous

    It gonna be family gathering as usual during Christmas. Just stay near to home and be cozy with everyone home, is the way to enjoy Christmas with less spending.

  6. Anonymous

    This year, for the first time, my partner is coming to my family Christmas instead of me going to his. I’m hoping the example of a Christmas where you just hang out together for a few days and eat a lot of food and don’t have a giant mound of presents to unwrap or 5 different places to be in 3 days will make him realize that I’m not just crazy when I say Christmas would be more fun if we could do less of it.

    We’ll see.

  7. Anonymous

    We didn’t do it this year but now with a kid we will be doing it in the future. We plan to have a christmas fund. $5 a week out of each check or whatever we can afford at the time and set it aside for the holidays. That way we’re not spending a bunch of money out of our account. Then be frugal about it don’t blow it all and save it for each year then big christmas’ (for when a new gaming system comes out for my husband or whatever) we’ll have the extra money in the account for the more expensive items. 🙂

  8. Anonymous

    Interesting post considering I just started an automatic withdrawal into my savings account for this very subject.
    I always overspend on Christmas and really enjoy myself but shouldn’t be spending like that. This year starting January 09 I decided to be more responsible and we will be making most of our gifts as well as having money set aside for Christmas.

    The withdrawals are very generous and we certainly won’t be spending all the money in there so after Christmas I will roll that money over and shoot it at some leftover debt.

  9. Anonymous

    Reading others’ comments reminds me…

    I use MyPoints to buy gift cards for obligatory folk (i.e. parents, who don’t appreciate really anything). I save up points through the year and spend them now-ish. When possible, I’ll make purchases for other items through MyPoints so I can get points for the purchases. (Of course, if I can find it cheaper somewhere else, I go that way – the points aren’t worth extra $)

    For girlfriends, I’ve been hosting a ladies’ tea one afternoon. It’s difficult for us all to get together, so we plan now, pick a date in December, and get together, drink tea, eat cookies, and talk 🙂

  10. Anonymous

    @Bargain Babe (Julia): The coolest word on this entire webpage is “ginormous.” Here & I thought I was the only one who used it. 🙂

    @George: Great idea… that falls under “spending quality time” and I couldn’t agree with you more!

  11. Anonymous

    My sister and I stopped giving gifts to each other for any holiday. Saved us extra money also since we don’t have to spend on shipping fees as well.

    I do have one gift that I give to all of my friends at once though. I usually hold a party where I cook a main dish, a couple side dishes, and have some drinks. I ask anyone that attends to bring either a dish or snacks. It has worked out great for the past couple of years. A nice meal is a great gift to give any time of the year!

  12. Anonymous

    I’m right with you, Matt, especially on No. 2. Most of my friends and family don’t need or want anything, but they want to feel appreciated and loved. I think thoughtful homemade gifts, “time together” gifts, and gifts of service are a great way to show I care.

    I ask myself what I could do to show that I care? The answer is different for each person I am exchanging gifts with.

    I also plan to rely on a ginormous stack of gift cards I have accumulated and rewards perks through Swagbucks to buy some gifts. Two years ago I spent $400 on Christmas, last year I brought that down to $300. Think I could do it this year for $200?

  13. Anonymous

    So many great comments… I particularly like this one from Noadi:

    “…if it’s not enjoyable to give then it’s not really a gift is it?”

    That is a very simple, honest, and truthful way to approach it – thank you for that insight.

    I think making gifts is especially fun for children. Make them part of the solution and include them in making ornaments and decorations for the house along with gifts for loved ones. You will be amazed at how excited the will be to give gifts they made!

  14. Anonymous

    I usually don’t do a lot of gift giving for the holidays and my family doesn’t expect it. My grandparents had a lot of kids and last count there were something like 90 grandchildren so within each little nuclear family is where all the gift giving goes on, it wouldn’t be possible for anyone to afford giving gifts to everyone. That said my brother and his wife are expecting their first baby at the end of this month so I’ll probably spend the bulk of my christmas shopping on my new little nephew.

    I only have a handful of people I buy gifts for (immediate family only and I keep those under $30 each) everyone else gets gifts I make for them, usually in the form of a handmade ornament and/or baked goods. I love to give gifts so the time it takes to make them is worth it. Instead of any sort of stressing about what I’m giving people I have fun with it, if it’s not enjoyable to give then it’s not really a gift is it?

  15. Anonymous

    I have often given coupons for services (usually babysitting for folks with small kids) and they have never been redeemed. Not once.

    My husband and I buy for each other out of our “fun money” accounts and can spend as much as we want. What I spend depends more on what I think he’ll like than how much it costs. His mindset? Not sure 🙂

    His family is huge (lots of siblings, all with kids, some of the kids with spouses), and no one exchanges except mom with everyone.

    We send a gift to my parents (I tried bailing out of that twice already and there was significant backlash) but not to my siblings.

  16. Anonymous

    I’m a little older now, 35, but I’ve never spent much at Christmas. When my husband was my boyfriend and we had no money – we didn’t buy much for each other – we spent less than $50 and we probably should have spent less than that. Today we just buy whatever – cause we have the money – but its usually along the terms of something we were going to buy anyway. Like we’ve been talking about getting a netbook – that might be a gift. Or we’ll buy each other some books we’ve been wanting (that we would have bought for ourselves anyway). Sometimes shoes come into the picture – my husband runs a lot and goes through running shoes. I’ll probably get him a pair – he’d buy them anyway – he’ll probably get me a pair of tennis shoes or a new racquet I’ve been eyeing. So we aren’t wasting money we’re just labeling things we’d eventually buy anyway as a “gift”.

    As far as friends and co-workers we just go out to eat or have a big potluck and wish everyone a good year, etc. If any gifts are exchanged its usually because someone has a knack for making something like candy or jellies – something small and its more of a token than a gift.

    The only people I give gifts to are my parents, sister, my in-laws and my brother-in-laws (all are joint gifts with my husband and me). We don’t go any further than that. I have a large extended family and I find that visiting them (most live an hour or two away) is gift enough. That’s all we really want – to be together.

  17. Anonymous

    Buying stuff online (and early) can also save you a lot of money. Look on eBay for deals, or Craigslist to find the perfect gift that is cheaper than a store price. Also, every week in the Sunday paper there are loads of coupons that are probably better now than they will be closer to the season (supply/demand), cut coupons! I try to have most of my shopping done by thanksgiving because I am on a limited budget and need to spend wisely… this also makes for more thoughtful gifts. Besides that, places like Vista Print offer customizable items that can make great gifts- many of them “free” (for just the shipping and setup costs)

    I like your suggestion of making things for people. I do this a lot as well.

  18. Anonymous

    We only give gifts to the children in our family – no adult gifts whatsoever.

    In terms of ideas for giving coupons for services, I would LOVE to get a babysitting coupon – way more than any sweater or other such thing.

  19. Anonymous

    It’s difficult to save and spend during the holiday season so the best plan should be to save a little before the holiday season planning out a general idea of what presents costs.

  20. Anonymous

    We’ve found that the first year of cutting back on gifts is the hardest – some friends still got us gifts, even though we told them we didn’t want to exhange presents. The second year was much easier.

    We have a big social network but a tiny budget. I stock up on holiday cards in January for the next year, and make sure that every friend/co-worker who once got a gift still gets a nice card. With postage, we might pay $20 per year to send cards to EVERYONE, about 30 friends. Close friends also get a homemade gift, usually baked or canned goods.

  21. Anonymous

    The biggest thing we do is simply limit the amount of people we purchase gifts for. We buy for our parents and nephews / nieces only. We don’t even exchange gifts with our siblings. I think the gift part of Christmas is more about the kids anyways.

    My wife and I still exchange gifts as well. Yes – it’s probably a little unnecessary, but we don’t have kids and it’s the one time of year that we go out and buy each other something. It’s nice and I always get excited about picking her out something that I know she will love.

  22. Anonymous

    If you have to go the traditional route I suggest converting your credit card reward points to gift cards then use the gift cards to do your shopping. It’s like shopping with found money – you are not charging up the cards or drawing on your bank account. I usually order my reward cards now so I have them in penty of time for any shopping I have to do.

    I’m a big fan of baked goods as gifts But that’s because I love to bake). The whole family gets involved and we have a lot of fun. Tins and plates for packaging can be found at the $1 store.

  23. Anonymous

    Good stuff, Matt!

    My husband likes to open lots and lots of gifts Christmas morning. So I buy and individually wrap the ‘luxury’ foods that he eats during the year as part of his Christmas stuff. Six cans of pitted black olives, same amount of powdered cheese (for cheese popcorn making), etc. They get paid for out of the normal food budget, and bought when on sale.

    My mother is more of a challenge. She’s over 90, and I’ve been encouraging her to eat well by sending her a Fruit of the Month club. She has admitted she hates that. She’d far prefer a cake of the month! So I’m going to bake and send her a big batch of cookies each month. I considered sending a cake, but those would have to be sent overnight … and the shipping costs on that are outrageous.

    Frondly, Fern

  24. Anonymous

    Instead of buying gifts for each other for Christmas, my girlfriend and I each set aside some money toward going somewhere together. It keeps us from blowing money on something the other doesn’t really need and we really enjoy the time together.

    I’ve also never understood gift cards as gifts except for grandparents to give their grandkids or something like that. How about instead of you spend $30 on a gift card for me for Olive Garden and me spend $30 on a gift card for you for Chilis we both keep our money and go wherever we want with it?

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