We all have complicated emotions tied up with the holidays and gift giving. Rachel Rabinovich, CFP®, helps you plan a Grownup gift-giving budget.
My family celebrates three December holidays: Hanukkah, Christmas, and Russian New Year, all of which traditionally involve gift giving. I know what you’re thinking…How fun! What a lucky kid my daughter was to get gifts on three different occasions!
Fun, yes…but also expensive and problematic. Even if we could have afforded eight nights of presents at Hanukkah, a visit from Santa, and a third round at New Years, the non-stop gift parade could have turned her into a diva. That wasn’t how we wanted to bring her up.
We weren’t alone, then and now. As a CERTIFIED FINANCIAL PLANNER™ professional, I see Grownups (with multiple celebrations or just one) trying to step out of the commercial whirlwind; instead, they want to slow down the spending and focus on the meaning of the season.
The spending trap: I think many of us find ourselves becoming sentimental about holiday gift giving, and want to shower those we love, particularly our children, with presents. But that quickly becomes unsustainable, whether there are multiple holidays or not. When our daughter was young, we were still climbing out of student loan debt and trying to save for a house. A boat load of presents just didn’t make sense with our values, goals, or budget.
Here are my budgeting tips for a meaningful holiday season.
Strategize Your Gift Giving
The earlier you come up with a strategy, the better: You’ll set expectations for yourselves, family, and (of course) your children. It’s far easier to establish good habits at the beginning rather than change old ones.
- Figure out the gift list early and (if you have multiple celebrations) determine which gifts are given at each holiday event. For us, since Hanukah was never about gift giving for my husband growing up, our daughter got one or two “big” gifts on the first night. Then the rest was divvied up between Santa and wrapped gifts from Mom and Dad.
- Keep a spreadsheet tracking which gifts were given when each year—this is particularly useful when you have more than one child.
- As part of your holiday preparations, take time with your child to sort through toys, books, clothes, and donate no longer used items to charity. This serves dual purposes of clearing out inventory before the next round comes in, as well as creating a habit of charitable giving. (CFP® tip: Don’t forget to get a receipt for those tax deductions!)
Prioritize Your Gifts
Don’t assume you know what your loved ones are hoping for this year. Have a conversation, then get going.
Encourage kids to prioritize the items on their wish lists. Even though we might want to fulfill all of their wishes, it’s often not feasible or even wise to do so. For our daughter, this helped to create a sense of mindfulness about what is most important to her—and what is realistic.
To help children prioritize, establish a four gift rule:
- Something they want
- Something they need
- Something to wear
- Something to read
Designate a part of the holiday budget to make a donation as a family to a charity. Engage kids by researching organizations together that have some meaning to their interests. For older kids, task them with picking an organization. Many people find more joy in giving rather than getting at holiday time.
Reflect…and Communicate with Your Family
Regardless of background, we all have complicated emotions tied up with the holidays and gift giving. For interfaith families, it can be especially tricky to establish new habits and traditions. For my family, it’s gotten easier over the years to maintain our own traditions, although it remains an ongoing exercise. Ultimately, thinking about the values and goals you have as a family will help inform how you create—and update—your unique holiday experience.
Rachel is a CERTIFIED FINANCIAL PLANNER™ who believes that financial planning can be a positive and powerful tool for changing lives.
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While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.