“It absolutely can affect your self-esteem, it can affect your self-worth, and it can affect your self-image,” says psychotherapist Adrine Davtyan, LCSW, of the financial need to scale back holiday gift-giving or worse, accept an expensive present while you're in the fiscal trenches. And yet, you shouldn't feel bad about drawing a line in the sand (or snow, rather) when it comes to gift expenditures, given the importance of prioritizing your financial well-being.
To get ahead of uncomfortable gift encounters, it's helpful to learn how to tell family and friends you're cutting back on holiday gifts this year before the time comes. Read on for expert advice on approaching that talk, plus smart tips for reducing your gift expenditures without scaling back on holiday fun or memories.
How to tell family and friends you're cutting back on holiday gifts this year
Lead with honesty and vulnerability
In order to be upfront with loved ones about your decision to cut back on gifts, it's important to be honest with yourself first, says Davtyan. Acknowledge recent costly events that may be influencing your holiday spending cap—maybe you had a surprise increase in rent, or your car needed an expensive replacement, or perhaps you had an unexpected medical procedure. Or maybe you’re trying to save up money for a baby on the way or tackle student loan payments. “When we're honest with ourselves, we bring awareness to what our life experience is, and sometimes, the cards that we’re dealt can just mean it's out of our control,” says Davtyan.
Bring the same honesty to the money talk with loved ones, well before the time for gift-giving arrives, says Davtyan. “If you're changing something, it's important to let your friends and family know as soon as possible to give them space to adjust to the change and shift their own gift-buying accordingly.” This way, you're unlikely to run into that awkward scenario wherein you receive a gift more extravagant than the one you were planning on giving.
“If you're changing something, it's important to let your friends and family know as soon as possible to give them space to adjust.” —Adrine Davtyan, LCSW, psychotherapist
Allow your tone and choice of words to reflect your emotional vulnerability when having these conversations, suggests Davtyan. “It can prevent misunderstandings from happening when you're being really honest and authentic, and it's coming from your heart,” she says. “Make sure they know that the relationship you have with them is secure, and this decision isn't personal.”
Offering some context for why you're scaling back on gifts can also be reassuring—though you certainly don’t have to share every detail about your personal finances, says financial advisor Elle Hall-Coleman, MBA, CEO of Girlfriend’s Budget. If divulging information about the source of your debt and low holiday budget is going to stress you out, keep these chats short and sweet. Still, Hall-Coleman suggests telling your loved ones that you’re being intentionally conscious about how much you spend on gifts this year in order to meet your personal financial goals.
Remember, too, that just as your family might not know about your financial situation, you may be unaware of theirs. Sharing that you’re adhering to a tight gift budget could alleviate some anxieties in those who may be similarly struggling with money and hoping to spend less on gifts, too, says Hall-Coleman.
Set boundaries and expectations
Be clear about what your loved ones can expect from you, and express that you would prefer not to receive any lavish gifts in return. Chances are, they’ll understand and follow suit, but if they challenge you, stay firm in your boundaries while also acknowledging that their resistance is valid. “It's so important to be considerate and open to hearing how your loved ones feel,” says Davtyan. “This might be an unexpected change that’s dropped right in their lap, and they may not be happy to hear it, at least at first.”
In this case, you can suggest establishing a spending cap for gifts among a group of your family members or friends—so that others know they're not expected to spend anything more on a gift for you than you're planning to spend on a gift for them, within your new budget. And if Aunt Sue *still* insists on gifting you a flashy present, simply reiterate that she should not expect anything luxe from you in return, and accept the gift knowing that you have relieved yourself from the pressure of reciprocating it by setting clear expectations.
4 tips for minimizing spending on holiday gifts (without skimping on meaning or fun)
1. Shorten your overall list
If you’re someone who likes to buy gifts for anyone and everyone, consider whittling down the list of people you’re shopping for, suggests Hall-Coleman. It can be exciting to buy gifts for coworkers, bosses, teachers, and next-door neighbors, but trimming your list will help ensure you can afford to give what you'd like to give to the people closest to you. “Look at your discretionary spending, or the spending money you have left after your expenses are paid, and then determine from there how much you’ll realistically be able to spend and on whom,” says Hall-Coleman.
Another way to quickly shrink your list? Suggest that your family or friend group participate in a Secret Santa-style gift exchange this year, says Hall-Coleman. This way, everyone can anonymously draw the name of one person from a hat, and then get one gift for that person within a predetermined budget (rather than feeling obligated to get something for everyone in the group).
2. Fill the holiday season with memorable events
Material goods break down over time, but memories last forever. And those can be created without using any money at all—by instead offering your time, effort, and energy, says Davtyan.
A few ideas? Create a craft table to make DIY ornaments or paper dreidels, plan a group hike, or go caroling. Decorate a gingerbread house together (we love this one inspired by the Barbie movie), or make luminarias (aka Christmas lanterns) using paper bags, sand or pebbles, and LED tea candles.
According to Davtyan, emphasizing the experiences you share with loved ones (rather than the gifts you exchange) can establish new holidays traditions and create fun memories that your loved ones will cherish for years to come.
3. Focus gift-giving on meaning, rather than monetary value
You can still get something memorable (and absolutely fabulous) for your friends and family members without blowing your budget, says Hall-Coleman, but it may take some ingenuity and time.
One of Hall-Coleman’s favorite budget-friendly gift ideas is to shop for a collection of small items that you know a loved one would like, and assemble them in a thrifted gift basket.
For a new homeowner, for example, consider hunting for small, inexpensive household items that align with their style or needs; for a foodie, dig around at local eateries for bottled versions of their favorite sauces and spices, or go thrifting for unique (and low-cost) glassware that suits their aesthetic. “It’s thoughtful because you know what that person likes, and you're able to put a few of those things into one gift,” says Hall-Coleman.
4. Give yourself grace
Money is fluid—it comes and goes for all of us. Just because you’re low on funds this year, for instance, doesn’t mean that you will be next year, says Hall-Coleman. (To get ahead of holiday money stress in future years, she suggests setting up a specific holiday fund now and dedicating a small amount to that fund from every paycheck.)
Understand, too, that cutting back on gift spending is, again, totally valid—and a tight budget certainly doesn’t have to hold you back from having an enjoyable holiday season. There are many, many ways you can express your love for your family and friends that don't involve spending money, Hall-Coleman reiterates. And in the spirit of the season, letting go of financial shame or guilt around the holidays is one of the best gifts you can give yourself.
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