by Michelle Maton, CFP®
Spending this holiday season is estimated to run up to $1 trillion (yes, that is trillion with 12 zeros). We will spend $2.2 million on 400 million Christmas trees. We will spend $5 million on our pets. Forty-six percent of us will do our shopping online.
And how will we pay for all this spending? Most of us (68%) are paying from savings. That is the good news. But a high number of shoppers are running up balances on their credit cards, some are borrowing from family or friends, and are looking at debt hangovers in January.
It is estimated that men will spend an average of $725 this holiday season and women, $609. Gen Xers will spend an average of $782, Millennials $609 and Baby Boomers $576. What are we all buying this year? Sixty-one percent are buying clothing, 30% are buying electronics, and 20% are giving cash.
Do you really think that Amazon is giving you free shipping? You are paying, just not upfront. Merchants pay for the privilege of being the “Fulfilled by Amazon” vendor and has built the cost of shipping into the price you are paying. Comparison-shopping might be the best way to make sure you are not overpaying.
Tips, lists, to-dos and do nots on how to make your shopping less stressful and within your budget, are everywhere. But if you need a reminder, here goes:
- Set a budget
- Make a shopping list
- Don’t wait until the last minute
- Resist buying for yourself
- Shop with cash or debit card
- Or better yet, use “points” earned on your credit cards
Now let’s think about what to buy each person on your list. Buying an “experience” is the gift that keeps on giving. Research reveals that the enjoyment of sharing a concert, a stage play, a movie, or a meal with loved ones gives at least three ways; anticipating, the experience itself, and the memory that lives on. There is an added benefit if you are included in the “experience.” It becomes a gift doubled.
Time is another gift that is often overlooked. Taking an elderly neighbor to the grocery store, babysitting for an overworked mother, taking your mother to brunch, your father to an afternoon movie, sharing an afternoon at the art gallery or museum—all are rare gifts that money can’t buy. These gifts have the added bonus of being kinder to your budget.
Gifting to special causes or passions may be an opportunity to share your values with younger children in your family. Bake cookies together and then deliver them to a sick neighbor. Set aside a part of your charitable budget for contributions chosen by your children and/or grandchildren.
Set an amount of charitable giving for children, and give them the responsibility of choosing the recipient. Younger children may need some guidance, but it is never too early to begin modeling your own values and generosity to others. Make your spending this year meaningful and kind to your budget.
Finally, remember to keep all supporting documentation for your charitable giving so you can make all of the deductions you are entitled to on your tax return.
Michelle Maton, CFP® is a Partner and Senior Financial Planner in the Chicago office of The Planning Center, a fee-only financial planning and wealth management firm.
Please email her at: firstname.lastname@example.org.