Goodbye, gift debt. Here’s how to participate in holiday giving without breaking the bank
There are plenty of holiday sales happening, and many of them promise big savings. Between the deals and the anxiety surrounding gift giving, the holidays can bring on a lot of emotions… and also cause debt. Most of us are making tradeoffs to afford the holidays, including buying less and shopping for fewer people, according to a CNET holiday spending survey.
Despite these tradeoffs, it’s easy to overspend. Shang Saavedra, a CNET Money expert and founder of Save my moneysays that far too often people start the new year stressed and trying to get their finances back on track.
“I’ve seen consumers spend hundreds or even thousands of dollars on parties, travel and gifts during the winter holidays, only to be faced with an insurmountable credit card bill in January,” Saavedra said.
That doesn’t have to be your reality. You can start 2025 with confidence budget and even put some money aside for yourself new year goals. And you can still give your loved ones a meaningful gift without feeling guilty. This is what we recommend.
Set expectations with family and friends
A lot of the fear surrounding it give as a gift arises from trying to match the recipient’s efforts and expenditures. Before you start buying gifts, set up guardrails with your friends and family, Saavedra said. For example, set a dollar limit of $10 per person or only buy gifts for the kids. By setting expectations now, everyone can participate at their leisure without having to worry about expensive gifts.
Another way to keep costs down is with a gift game, like White Elephant or Secret Santa, where you are responsible for buying just one gift for one person. It’s expensive to get gifts for everyone, so this is more budget-friendly.
Read more: My spending trigger is FOMO. Here’s how I keep it under control
Categorize gift recipients
To stay on track, set a budget that you won’t exceed and set limits per person per category. Saavedra suggests dividing the people you buy gifts for into three groups:
For example, you might consider sending acquaintances or colleagues a thoughtful gesture, such as a handwritten card. Or you can give them something smaller, like a Christmas decoration.
Figuring out how to reduce costs for the first two groups of recipients can free up money for your loved ones, like close friends or family, on whom you’ll probably want to spend a little more. But even for them, you should set a dollar amount that you feel comfortable with.
Read more: No, you don’t have to give Christmas gifts this year. How to skip it without shame
Choose thoughtful gifts without high price tags
Saavedra knows how disappointing it can be not to be able to afford the fanciest gift, but it’s best to prioritize your own financial needs and goals. There are thoughtful alternatives that can be just as useful but cost a fraction of the price.
Get creative with homemade crafts and treats
Think of a homemade card, Christmas cookies or a family photo in a frame. Saavedra said there’s no shame in re-gifting an item you received from someone else during the year.
Buy gifts in bulk
If you’re giving to multiple recipients, Saavedra also recommends buying in bulk. You can save money by purchasing gifts at discounted prices from wholesale clubs such as Costco and Sam’s.
Give the gift of your skills and time
Your time and other special skills can also be great gifts. One of Saavedra’s favorite gifts for parents with young children is babysitting coupons. “It might cost you time, but it would be incredibly meaningful for parents, where babysitting these days sometimes starts at $25 an hour,” she said. A four-hour night out can easily cost them a hundred dollars.”
Think about how your creative skills can help others and create a coupon or gift certificate. Here are a few other examples of service gifts for your loved ones:
- Filing taxes for a family member who is struggling with this task
- A home-cooked meal that you can prepare for them next year
- Walk dogs, babysit pets or run errands during your friend’s next vacation
- House cleaning for a family with a newborn baby or a friend who is busy with work
- Create a website or logo for a friend with a new business
- Carpooling for children whose parents have conflicting work schedules
- Home repairs or upgrades for someone who may need a handyman or doesn’t have the time
Read more: The best last-minute gifts you can print or email
Don’t wait until the week before Christmas to start shopping
To stretch your budget as far as possible, buy early to get the best deals. Saavedra used browser extensions for her favorite retail websites, such as Camelcamelcamel, to check the price history of higher-priced items.
If you wait until the week before Christmas, the best deals may disappear, as retailers often increase prices later in the season.
However, the holiday sales are in full swing right now, so you can find some good deals on gifts right now.
Resist using credit cards and BNPL subscriptions
Too often, Saavedra has seen people trying to get their finances back and recover from the overspending and debt they accumulated during the holidays.
While it’s tempting to consider spending money on gifts through financing options such as a “Buy Now, Pay Later” plan, doing so can seriously harm your finances for years to come.
“These are essentially high-interest consumer loans to get you to spend money you don’t have.” Instead, Saavedra recommends spending only the money you have and looking for alternative gifts instead.
If you want to buy a gift that you can’t afford now but know you can pay for in full later, consider Amazon’s layaway option, which offers more protection to help you avoid debt. And if you decide to use a credit card to finance a purchase, consider a 0% APR card, which can prevent interest charges from accruing for a period of time if you can’t pay off your balance immediately.
