While many may look forward to the holiday season for family traditions, time spent with loved ones, and sinful meals (no regrets!), there’s one thing that may suffer during this time: our wallets.
There’s a lot of joy in giving and receiving presents, but the downside is that it can often feel like an obligation that sets us back financially.
The good news is, there are many ways to partake in the coziness of the holiday season without breaking your wallet (or worse yet, your bank account).
Here are a few suggestions to enjoying a holiday season with the fam, while keeping your finances healthy:
Decide Ahead of Time on a Mutually Agreed Upon “No Buy” Holiday
Would your friends and family be relieved at taking the idea of exchanging presents completely off the table? Take the question mark out of whether there is an expectation to gift giving at all.
These days, your significant other, family, or friends may not even be expecting presents. If you agree ahead of time to celebrate the holiday season with a “no buy” rule in place, then you can go into the holidays without worrying about hunting for the perfect gift and wondering whether you have forgotten to budget Uncle Ted in the process.
A different take on this may be to agree upon a price limit for gifts, so that no one feels pressured to reciprocate in a way that is out of their budget.
Having a mutual “no buy” agreement helps level set expectations and allows you to focus on the other parts of what makes the holidays so special.
Partake in the Holiday Spirit: Gifts of Time & Love
The spirit of the holiday season is not about consumerism, but rather spending quality time with your loved ones. “Giving” does not necessarily mean gift-giving, but rather lending a helping hand, showing love and support, and spreading goodwill.
There are many organizations that have volunteer positions available during this time of year. Find a volunteer event where you can roll up your sleeves with your family and friends. Spend time and create new memories with your loved ones while helping and giving back to your community.
Organize a Secret Santa, White Elephant, or Gift Exchange
A Secret Santa or white elephant can be an inexpensive way to partake in the fun of exchanging gifts while helping you spend quality time with friends and family.
With a Secret Santa, each participant gives one gift and receives one gift. This makes it a simpler and less financially draining way to exchange presents.
The White Elephant gift exchange involves a party game where funny gifts (generally set at around $25 or below) are selected and stolen. At the end of the game, everyone ends up with a gift. Like with Secret Santa, each participant gives one gift and receives one gift. The focus is more on the entertaining nature of how the game unfolds (and the priceless memories) rather than the gift itself.
A gift exchange can also help take the pressure off the prospect of buying gifts of multiple people – since the price range, participants, and recipients are determined ahead of time, you can enjoy the fun of gift giving without breaking the bank.
Consider Handmade Gifts
Every year, my sister and I really rack our brain when it comes to figuring out what to give as gifts to our parents (we usually go in on it together).
To be honest though, my mom’s favorite present from me is a handmade heart ornament that I made for her when I was in third grade. It’s quite simple – two pieces of heart shaped felt pieces with beading that I sewed together with colored thread. She’s kept it throughout all these years and has had it displayed in her office at work (I can’t say the same about most of the things I’ve bought her as gifts).
There is something to be said about a personalized, handmade gift that you know your recipient will love and cherish for the years to come. And bonus – handmade gifts are definitely one of a kind.
Plan Ahead with a Sinking Funds Tracker
At the end of the day, there is nothing wrong with gift giving if it fits into your budget! (And for some who are short on time, it may be the most convenient as well).
A well planned gift does not have to break the bank or shake up the budget.
The problem that most of us encounter is that we don’t really plan for a specific “gift” line item in our budgets, much less plan ahead for gifting during the holiday season.
Planning ahead is key – it allows you the space and time to come up with a thoughtful gift, rather than something that the receiver will store away or regift. And financially, it allows for you to set aside a manageable amount of money over a period of time so that you can spend guilt free (and debt free) when it comes time to make your purchase.
One method of getting ahead of saving for holiday gifts is to use the sinking funds method. This will allow you to make a savings plan and put away money over time so that you don’t need to purchase with money you don’t actually have. Another benefit: you can buy during times when demand is low and there are plenty of deals and discounts (like Black Friday).
Read more here on how to use the sinking fund method to make small steps towards making your holiday purchases.
Shop Through Rakuten or Honey if Purchasing Gifts Online
When shopping and placing orders online, don’t forget to check for cash back rewards through Rakuten, Honey, or other cash back reward sites.
There are a variety of participating stores where you can receive cash back up to 20%, such as:
-Department stores:
Macys, Bloomingdales, Kohls, Neiman Marcus, JC Penny’s, Saks Fifth Avenue, Bergdorf Goodman
-Home and decor:
Bed Bath & Beyond, Lowe’s, World Market, Container Store, Pier 1
-Beauty & Health:
Sephora, Ulta, Dermstore, Walgreens, CVS, Rite Aid, MAC, Sally Beauty
-Clothing & Accessories:
H&M, ASOS, Uniqlo, Anthropologie, Shopbop, Revolve, Urban Outfitters, Net a Porter, Zappos
-Discount sites:
Groupon, eBay, Living Social, The Outnet, Overstock
-Gift themed
-Electronics
-Subscription boxes
-Books and media, and
-Other great ideas:
Masterclass, Rosetta Stone, Coursera, Skillshare
Check out the complete list of stores here.
I use Rakuten when I need to make purchases throughout the year, and it’s a great way to get some cash back when making holiday purchases online.
If you haven’t already, sign up for Rakuten here (it’s free!) so that you can take advantage of cash back on a wide variety of stores!
Take Advantage of Credit Card Bonus Cashback Rewards
While this may not be recommended for those who are working on paying off their credit card debt, leveraging the cashback rewards from credit cards can be an easy way to shave off the cost of your purchases.
My Citicard Double Cash gives me 2% cash back on all purchases, and my Citi Dividend Card gives me 5% cash back on categories that rotate each quarter. The latter would be great to use for purchasing gifts when the reward categories are department stores and Amazon.
For those who are looking to leverage their credit card rewards, this may be an easy option to save some money on your purchase.
Enjoy the Holidays with Your Loved Ones While Keeping Your Wallet Intact
The holiday is about family, helping, love, and goodwill. Enjoying the holiday spirit with loved ones can be warm and cozy without needing to break the bank on gifts.
The best advice I have is to choose to really honor the spirit of the holiday season and to plan in advance, whether that is setting expectations ahead of time, planning to save ahead of time for purchases, or organizing exchanges or traditions for family and friends.
Cheers!