JOINT BASE CHARLESTON, S.C. --
The holidays are approaching once again, and so the season of gift giving is upon us. Its arrival is marked by barrages of nonsensical advertising and holiday specials on everything from sweatshirts to new cars to payday loans.
Although it’s not new advice and you’ve likely heard it before, please be wise and responsible when giving gifts this year
, and don’t jeopardize your long-term financial foundation in the name of short-term gain by buying stuff that you can’t afford. Buying and spending more in the name of bringing joy to others - and especially children - is a given during the holidays, but it’s vital that you spend and give wisely, because it’s easy to derail your own financial goals without some vigilance.
This doesn’t mean that you should jump to the other end of the spectrum, and be a stingy cheapskate by giving only secondhand junk. Be reasonable, that’s all.
And, of course, let’s acknowledge that the holidays aren’t about giving and getting gifts anyway, and you shouldn’t base your worth or feel like your worth is being judged by how expensive and flashy the stuff you and your kids get as gifts. Don’t be shallow. You want to treat your family and significant others well, sure, but out of a spirit of giving and magnanimity, not out of a spirit of consumerism and materialism.
That said, when it comes to buying gifts for your own kids, their well-being is dependent on your own, so it’s important to balance gift-giving without digging yourself into a financial hole.
One of the surest ways to do this is to realize that spending more money on gifts won’t necessarily make anybody happier. What does make folks happier is smarter gift-giving.
Realize that the amount of money spent on gifts and the happiness they bring are not interlinked. The sooner you can separate the two, the better off you’ll be. More expensive gifts don’t always bring more - or longer-lasting – happiness, and if executed poorly, the negative financial effects of spending haphazardly on gifts can do the exact opposite of your intention – you can end up unhappier because of the poor place that you’ve put yourself in.
Don’t take this as a stern warning, but rather as an understated reminder to always consider your financial future and weigh it against happiness today. After all, you could save a ton of money if you didn’t buy any gifts and went and lived under a bridge, but the happiness consequence that would result wouldn’t be worth it. It’s about finding balance.
Start planning long before the holidays.
The holidays don’t come by surprise – everybody knows they’re coming, so think long in advance about what gifts would give the best happiness return on investment. Don’t just go to the mall or the department store and think that you’ll bring the most happiness by just buying off-the-shelf consumer products. Show that you put some thought into the gifts that you want to give, and also you’ll likely spend less.
Create a holiday spending plan.
I prefer to not use the word “budget” because its connotations are so strict and rigid. Instead, know that you have around a certain number of dollars you’re willing to spend per person or for the whole season, and do your best to stick to it. This doesn’t mean you have to be stingy – you can give as prolifically as you want, as long as you can support it.
Don’t use a credit card to buy any holiday gifts if you carry credit card debt.
Buying with a credit card isn’t inherently bad, and can actually work to your advantage, but only if you pay it off every month. This is why you should start planning early – if you have credit card debt, don’t make the emergency worse by digging the hole deeper.
Make sure you still meet all your regular financial obligations.
Your regular bills will still be there during the holidays, so don’t think that you can spend more on presents by skimping on a bill and catching up later. If you think you might slip up, pay them all ahead of time.
Give stuff that will actually be used.
As a result, if you don’t know what to get somebody, something consumable – especially food – is a good choice. Make it something fancy that they otherwise wouldn’t get for themselves.
Don’t fall into consumerist traps.
Don’t buy extended warranties, because they’re hardly ever worth it. Don’t sign up for credit cards at the checkout to save 10 percent on your purchase. Don’t make huge purchases on payment plans that demand high interest. Don’t be susceptible to advertising, because businesses don’t invest heavily in advertising to help you out.
The overall point I’m trying to make is that you shouldn’t damage your financial castle in the name of some short-lived happiness that you expect to get from giving, or because you feel the obligation to financial plans in the name of short-term gain. You’re not doing your dependents any favors by spending money you don’t have to buy stuff that doesn’t add any real value.