Question: I’m not one of these people who gets up at 3am to go shopping on Black Friday, but I do like to get my shopping done early. It’s easy for me to get caught up in the moment and overspend. How much do other people spend on Christmas and how much is too much?
Answer: By the time you are reading this, Black Friday will be just a memory. If you overate on Thursday and overspent on Friday, maybe you should call today sated Saturday.
Americans’ average Christmas spending actually peaked in 2001 at about $1000 per shopper. It fell by half to less than $500 when the economy bottomed out in 2008. Since then, holiday gifting buying has rebounded to an estimated $850 for this season.
Also, this will likely be the first year that over half of all Americans make a Christmas purchase over the Internet. The whole Cyber Monday thing seems to have firmly caught on.
So much for what everyone else does. What about you? How much should you spend?
I won’t try to offer a dollar amount, but allow me to suggest a couple of boundaries.
First, don’t shop with the bank’s money (as in, buying gifts with a credit card you won’t be able to pay off in full at the end of the month).
Second, don’t spend money you’ll be sorry you spent by Groundhog Day. Think of most of the people on your Christmas list. Can you even remember what you bought them last year?
Follow these tips to become a more careful Christmas gift shopper:
1. Don’t comparison shop. By this I don’t mean comparison of prices; I mean comparison of the gift you buy to the gift someone else is going to buy. Don’t compare yourself to your sister, your brother, your mother, your friend or your vague idea of Mrs. Perfect-Christmas.
2. Don’t try to create an experience through unbridled gift buying. After watching It’s a Wonderful Life reruns for the 99th time and overdosing on Christmas music, we can fabricate memories of Christmas past that are much more perfect than real life ever was. But that doesn’t stop us from trying to re-create that experience…at any cost.
3. Shop first in your mind, then at the mall. Many, many of us show up at the mall in mid-December with no idea of what we will buy, hoping to “get some ideas” as we shop around. You’ll be a better shopper if you spend 30 minutes before you go with a pencil and paper, brainstorming gift possibilities.
4. Buy quality over quantity. We never did this, but I’ve head of families on a budget that instituted the Wise Men rule. The Wise Men brought three gifts, so that’s what everyone in the family gets – three gifts, period. It makes the gift buyer much more careful about random (useless) purchases made just to fill up space. And it can leave room in the Christmas season experience for more important things.
5. If you’ve already overspent, make a plan to pay off the debt ASAP. OK, so you broke rules one through four a month before Black Friday. What to do? The best advice I can offer here is the make a plan to pay off any debt you incurred ASAP. Then sit down and write yourself a note, to be read on Halloween 2015, about how badly you feel having overspent this much, this early.
Gift giving can be viewed as a lovely compliment to a meaningful time of the year, or it can become the 800 pound Christmas gorilla, creating tension and wrecking havoc on your finances.
Today is a great day to decide which kind of gift giving experience you want to have this Christmas.
Byron R. Moore, CFP® is managing director / planning group of Argent Advisors, Inc. Email him at email@example.com. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. No forecasts can be guaranteed. Argent Advisors, Inc. does not offer tax, insurance or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.