I am 100% average. When it comes to the average American, he or she spends $906 a year on Christmas. If my Google Sheet lieth not, I’m about to be able to say samesies.
You read that right. I’m a personal finance blogger.
Who practices frugality.
And mindful spending.
And toys around with minimalism.
And is still set to buy a whole lot of presents this year.
But here’s the catch. While I’m set to dole out about $900 worth of gifts, I’m not actually coughing up that much cash. Here’s how:
Ask to Opt Out
The most important thing that we’ve done is to make sure that we let family and friends know that we are fine with not exchanging gifts. So very, very fine. This is the second year in a row that my best friend and I have decided to forgo gifts in favor of grabbing lunch or coffee or pedicures together. Admittedly, hers were great gifts. But great gift, good gift, or bad gift, I’m still willing to opt out.
Of course, this notion doesn’t sit well with everyone, so we have some backup strategies. For instance, now that we have a kiddo, we have told other relatives that they shouldn’t feel obligated to buy us anything. In fact, on my side of the family, once someone spawns an offspring, the gifting baton is automatically passed. So we’re hoping to spread that around some more.
Additionally, we’re big fans of grab bags. If you have to exchange gifts with a certain circle of relatives or friends, this is an outstanding way to shrink many gift-giving obligations into one. Bonus points if you do what we do with my relatives and go in on the experience as a couple. While we aren’t opting out entirely, we are certainly reducing the number of presents under the tree that we will both give and receive.
Save All Year
There are dozens of ways to do this. Just ask Pinterest. The 52-week challenge or reverse 52-week challenge are two fairly painless methods to sock away about $1000 to deck the halls each year.
We prefer a simpler strategy. Each month, we set aside at least $200 into a short-term savings fun. This fund is used for gift giving, among other things, throughout the year. That way, we don’t have to sweat the idea of a birthday present in July or a wedding in September either.
In addition to setting aside a bit of money from every paycheck into a short-term spending fund, I squirrel away all of my dollars and points from credit card rewards all year. This year, I had over $400 to spend on my Discover card alone. That cashback couples nicely with the end-of-year bonus categories and online shopping portals. The best thing is that it doesn’t really come out of my pocket because it isn’t something that we anticipate or budget for like a paycheck.
Spend Strategically
I believe in Black Friday. I believe in Cyber Monday. I also believe that there are dozens of other opportunities to spend wisely throughout the holiday season and year round. Not only do I shop sales and use price comparison tools like Camel Camel Camel, I try to get clever with when I spend.
If I’m set to buy something at Kohl’s, I’ll roll my Kohl’s cash into my next gift. If Target has a gift card promotion, I’ll look to score than and then apply the gift card to the next purchase. If I can’t earn any points at Walgreens, I’ll look for opportunities to spend the points that I’ve earned throughout the year. This year, Santa’s sleigh is filled with over $50 in treats—think popcorn tins and boxes of tea—that came straight from my Walgreens card, not my pocket.
While not every story offers some kind of promotional offer or rewards program, most of them are connected with Ebates or shopping apps like Ibotta. It may not save me a ton of jingle, but any spending that I can minimize is something that I’m all for.
Be Part of a Larger Plan
This is the first year that I’ve worked hard to gift experiences and consumables above all else. Not only do I hope that this sets the tone for the gifts that we receive—if we don’t just get coal and wood—I also think that people actually prefer these kinds of gifts even if they don’t know it yet.
The problem is, though, that a lot of experiences are really expensive. In the past, I never would have considered gifting something if it wasn’t the whole kit and caboodle. Now, I realize just how silly that idea was. I’m not Santa Claus. I’m not Oprah. I’m not a millionaire (yet). So I’m not giving out vacations. But I can buy Southwest gift cards that people can put toward their vacation. The same is true for gift certificates that can be applied to dinners out, manicures, highlights, and more. Even if I’m not responsible for highlighting my mom’s entire head or painting every toe on my aunt’s foot, by gifting them with $25 or $50 toward the experience, I’m showing them that I know what they really enjoy and reminding them to take time for themselves.
Buy the Dang Presents
I cannot stress this enough. It’s OK to buy presents. If you can buy gifts without jeopardizing your financial goals and your personal beliefs, get on it, little elves. While it is entirely true that the holiday season—or any time of year!—should not be driven by consumerism, there is no need for harsh criticism or guilt, either. In the words that Christmastime legend Mr. Scrooge, “Keep Christmas in your way, and let me keep it in mine.”
So Tell Me…How do you save on gifts?
Love this! Last year we saved money by DIYing presents. I really enjoyed it since I love DIYing, but our family felt otherwise. 😉
This year we’re buying presents and trying to do so in a frugal, mindful way. We put all of our expenses onto a cashback rewards credit card all year. When it’s time to pay for presents, they’re covered with our cash rewards.
Great post! I love that you said – spawns an offspring – lol! We did the same thing with our families. We said there was no need to get us anything once we had our kids! We also encourage our families not to bury our kids in toys at Christmas – we are a minimalist family. We encouraged consumables – such as art supplies. My in-laws found that gifting our girls age related workbooks are awesome. Our girls LOVE them and will spend hours tracing letters and numbers, circling the triangles in the pictures, and matching the momma horse to the baby horse, etc! My parents this year are gifting the girls with a brand new winter set – jacket, snow pants, hat, gloves. I love this as well!
And this year, Chris and I are gifting our kids a single toy each they really want. Then we are focusing on experiences, but a little differently. We are going to get the girls ice skates so we can go skating as a family. We are getting them sleds so we can go sledding. And we are surprising them at Christmas with our trip to Hawaii (though this is not to be expected every year, haha).
I love your idea of gift cards not needing to cover the entire experience! I’m no Oprah either!
Gift giving has really turned out to be an area fraught with difficulties through the years. Mrs. Oldster and I have really tried to concentrate on the little ones in our orbit and with adults we’ve tried to either a) mutually agree not to exchange gifts, or b) give charitably in the name of the other person. We like local Humane Society Shelters, Heifer International and also Samaritan’s Purse. Most folks will agree (sometimes grudgingly) to the charitable route,
I tend to spend a fair amount each year, though I’ve tried to cut back by limiting some of the presents (especially for the adults in the family, other than Jon) and cutting out some of the extras that mean less.
But I started early this year, and that’s meant I’ve picked up a bit more than anticipated.
I did save money, though, on some of it. I took advantage of some awesome October toy discounts at Target to take care of my nephews and some of my daughter’s stuff. I also used the Amazon Black Friday sales for some deep discounts, bought some discounted gift cards I knew I could use on presents, and stockpiled some Swagbucks and reward points. So at least my out of pocket expenses are well within my budget, even if I have spent a bit more.
This year I’m opting out of most present-giving, but that is just because my girlfriend and I are on a pause. I love giving her presents. Other than her, I have opted out of everyone but young children and food to her family. I buy presents whenever I see a good deal on what I intend to give. Keeping things around is easy when you don’t have too many folks you are obliged to shop for. I’ll spend probably $150-200 this year. It would be more than double that if I was spending for her too.
I love receiving gifts & consumables and gift cards that are for something I intend to buy anyway. My friends making big batches of jam and sharing them is delightful for them to do and for me to receive and it does not demand a permanent space in my home.
Our gift list is extremely limited. Mostly through luck, we’ve managed to not exchange with almost everyone. Even with each other, we tend to not buy gifts but rather go out and enjoy an experience together. I know many families, friends, and workplaces are filled with eager gift exchangers, and for that, I offer my sympathy. Gift giving can be fun, but the absence of gift giving can allow you to focus on the simpler joys of the season.
These are all really great tips and ideas. We have pretty small families so Christmas spending is minimal even if we buy nice presents.
I still have some shopping to do but can say we’re definitely spending less than $500 this year. I also try to use rewards or earned gift cards whenever possible.
I’m still trying to come up with a good “experience” gift for my mom and step dad.
Hey, Penny. About 10 years ago or so, I suggested to the family that we forego gift-giving for Christmas. I thought I was going to get some fierce blow-back. But to my surprise, everyone loved the idea. So now every year we do a grab bag and everyone contributes one gift that costs less than $25. And we always have a blast. I think this year Mrs. Groovy and I will get the reward for coming up with the most-fought-over gift. I’ll let you know what it is because I don’t think anyone in my family reads your blog (sorry about that). Wait for it… wait for it… Okay, enough with the suspense. One our two gift contributions to the grab bag is the Corey Feldman “Go 4 It” CD. The grab bag this year is going to be epic. Merry Christmas to you, Mr. P, and Half P.
Very helpful article. I actually spent only $700 this Christmas. My plan next year is to save a little every month as you stated in the article. Also, I’ve started watching every dollar I spend in the last few months and started to make a dent into my debt. Thanks for sharing and I appreciate the advise.
That’s awesome! I think we spent around the same, maybe even a little less thanks to gift cards.