I know a couple who is drowning in debt. The IRS is after them. Their credit cards are perpetually at their limit. They pay nearly $375 a month in interest, all of it on costly short-term debt. I was helping them come to terms with their spending habits by putting together a Personal Spending Plan when the wife told me, “You have to budget money for the holidays.”
“Okay. What do you need to spend?” I asked her.
“Well, we need presents for the kids and each other.”
“How much will that be?” I asked.
She looked at her husband for a moment and said, “$2,500 to $3,000.”
This was a couple with three college-age kids. The kids were fine, and they didn’t really need anything. In spite of being deeply in debt, this couple felt obligated to buy them expensive gifts. To the wife, it meant spending over $2,500 and charging more on their credit cards to do so.
For her, the holidays were a time to show her love by giving expensive gifts. When I asked whether they would consider scaling back or eliminating the expensive gift giving, they said it was out of the question. Their need to spend a lot on gifts was automatic, one that was repeated each year during the holiday season. They’d never even considered an alternative approach to the holidays.
Where do we get the idea that we have to show affection with expensive gifts? As though Aunt Mary is only going to love us if we buy her that $150 bread maker for her birthday!
Whenever I put together a Personal Spending Plan for a client, I break his or her expenses into three categories. Committed expenses are expenses that have to be paid, such as a home mortgage, utilities, taxes, or car payments. Discretionary expenses are those expenditures in which we have some measure of choice, such as groceries or new clothing. Very Discretionary expenses are for little luxuries, things that are not truly necessary. Often, expensive gifts fall into this last category.
Now, I’m not talking about the small stuff here. An occasional gift of candy and flowers for your sweetheart isn’t going to break the bank, and I’m not promoting an end to giving presents. I’m no Scrooge. What I am advocating is the application of reasonable restraint in gift giving—which has reached runaway proportions in many of today’s families.
Just look under the Christmas tree of most families in America and you’ll see what I’m talking about. Stacks of presents are bulging out from beneath the tree—or two or three gifts for every night of Hanukkah. This is not cheap stuff we’re talking about! It can add up to thousands in a season of unbridled gift acquisition for a family, and tens of thousands over a period of years.
One client comes from a large family, and he could no longer keep up with all of the gift-giving demands in his life. He realized he was giving presents because of an automatic compulsion—just because it was the “thing to do.” He realized that he was giving presents not from the joy of giving, but because he felt obligated to do so. So he decided to find a way to show his love for his family other than buying them presents. He explained to his family that he wanted to stop giving and receiving gifts, and why.
Since going cold turkey and stopping the gift giving, he has not experienced any loss of love from his family. In fact, he feels as loved as ever, and he enjoys the holidays more. The fact that he receives fewer presents from his family than he used to is fine with him. He would rather utilize the time he previously spent hunting for and buying gifts to visit with his family. He saves hundreds of dollars every year. And without saying so, he believes his family members are secretly glad to have one less person on their lists they feel they have to buy for.
Maybe the best gift we can give those we love is our time. After all, how much time do we spend dreaming up an appropriate gift, driving to the store, parking, shopping for it, buying it, wrapping it, and then giving it? What if we gave half that much time to someone by taking a walk in the park with them, or having lunch together?