Post-Holiday Financial Recovery + 3 Tips for Planning Gift-giving

Take a holistic approach to giving that lets you give more and spend less!

Happy New Year! If you’re anything like us, you’re looking over those newly-created resolutions and physically/financially recouping from the holidays. If you got a little tooo carried away with gift-giving, you’re not alone. The average American spent upwards of $1,500 or more in 2022. The good news? Even if you overspent, it’s possible to get your financial wellness into recovery mode–and make a fresh financial start to 2023. How? By planning gift-giving for the entire year now. While this may not be your favorite resolution, by being intentional about your spending, you can keep your financial goals on track, while protecting savings and reducing stress and anxiety.

?In this article, I’ll show you how to implement an achievable strategy for balancing generosity with financial wellness. January is Financial Wellness Month, so by reading this blog you’re already keeping an important resolution! Now go refill your water bottle (that’s on your list too, right?) read on and learn how.

?Something’s Gotta Give

“Holidays and birthdays always sneak up on me, and not only that - they seem to multiply!” groaned my client Fran while we did her budget review in early December. As we examined her annual spending, we tallied up how much she was spending on Christmas, birthdays and other gift-giving occasions. It was evident that her monthly budget was being stretched to a breaking point. How did this happen? Like many of us, Fran purchased the majority of her holiday gifts right after Thanksgiving. Prior to this, she’d purchased gifts for numerous family members with back-to-back birthdays. For Fran, spending on gifts is non-negotiable. Christmas is her favorite holiday, finding and giving presents to her family is one of her greatest joys. But as Fran’s friend and family circles expanded, her gift-purchasing frequency increased and expenses began to mount. On top of all the other financial stressors, you can imagine Fran’s anxiety level.

The Thrill of the Hunt, Why Do We Overspend?

There’s a psychology to it, and pressure. We have a desire to give meaningful gifts to loved ones that make them smile, and we’re rewarded when their eyes light up. However, this requires time and attention, which are usually in short supply. When holidays and birthdays ‘sneak up’ - we feel tension, and are more likely to overspend to compensate. It feels great in the moment, right up until you see your bank balance or credit card bill. Cue the holiday hangover, and worse yet - regret. So what’s a better way to think about gift-giving?

?Aligning Your Giving to Your Financial Strength

It starts with setting realistic expectations. When it comes to gifting, it’s important to find the balance between enjoying the moment while staying mindful of your spending limits. By taking a holistic approach to holiday giving, you can create many more realistic options that align to your financial strength. Start with a plan and a budget. Planning removes pressure, and helps you gain emotional and financial confidence. When you become a confident planner, you can resist the impulse to overspend.

?How to Build a Holistic Yearlong Gift Plan

Now that the big holidays are in the rear view mirror, it’s a perfect time to get organized for the entire year. Here are 3 steps to getting your arms around the financial component of gift-giving.

?Step 1: Inventory Your Past Gift-giving

Start by making a list of everyone you’d like to gift along with estimates of what you have spent in the past or would like to spend this year for each individual.

• Use a notebook or Excel/Google Sheets to compile your list. Note each gift-giving holiday, i.e. Valentine’s Day (Feb), St. Patrick’s Day (Mar), Easter/Passover (Apr), then list every holiday where gifts or extra spending tend to occur. Don’t forget the ‘major’ events, Christmas, Hanukkah, Kwanzaa, etc. Be sure to add the recipients name and amount of the gift.? Pro Tip: I like to list each month on a separate page or tab and then review my gift spending (including cards & gift wrapping).
• Add in family, friend or coworkers birthdays for each month of the year,
• Next, list out graduations, anniversaries, weddings or baby announcements that you know are occurring this year.????

?Step 2:?Review your total spending

Add up the spending column for each month and add that amount to your personal Spending Plan for how much you plan to give.

• How does it relate to your income (or other spending categories)?
• Does it total more than you thought?

?Step 3: Gift ‘Validation’

• Go back through your list and validate each of these gift-giving opportunities.
• Prioritize those most important to you. If you’re like Fran, it could be all of them!?
• Next, consider if a gift is required or if that individual would appreciate time spent with you and/or a nice thoughtful card. Here are some great examples that will create long-lasting memories:

1. Get outside! Schedule a hike or walk, and have a nice long connecting conversation with a family member.
2. Gather: Host a potluck, or a salon-style gathering for a friend’s birthday with your mutual pals.

?Alternatives for Family Gifting

Here’s an opportunity to unpack what the holidays are all about. For many, it’s about spending time with family and friends. And while it can be a little tricky to navigate, with a little advance planning it can be an opportunity to shift spending from consumption to something very mindful and meaningful. Here are a few tips:

• Tip 1: With family, during your next seasonal celebration, you could discuss how best to celebrate events.You might discover that others want to simplify their gift-giving too and are glad, or even relieved that you brought it up.
• Tip 2: For holidays like Christmas, Hanukkah or Kwanzaa, you could put all your family member names in a hat, and draw one person each or suggest everyone pitch in to donate to a charity for those less fortunate.

?Gift yourself a break- with Intentional Spending

Being intentional with your holiday gift-giving can prevent you from overspending–and derailing the progress of your financial goals.Take some time to plan out your yearly gift-giving with your budget and determine your best path forward for each event. In your monthly budget, put money aside in a separate savings account every month to use for gifts.

?Need Help??

You’ve got this! For more how-tos, find additional articles here. Need help now?

Simply schedule a free 20-minute Clarity Call on my calendar today.

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