Ruth's Two Cents: Aligning Christmas Spending With Your Money Values

As a seasoned money adventurer and financial blogger with the gift of the gab, who better to ask for money advice than Ruth The Happy Saver? Read the guidance she shares with our blog readers and beyond. No agony aunts here, just Ruth’s two cents.

Hi Ruth,

My partner is a big Christmas spender, and comes from a family where it is only a success when the food, decorations and gifts are as extravagant as possible. I’m more reserved when it comes to Christmas, and like to take a more frugal approach for the obvious financial benefits and to concentrate on the less materialistic parts of the holiday like spending time with loved ones and giving thanks. This always causes a bit of stress, so how can we align our values so we get a Christmas we both enjoy this year?

The entire festive season is a period of compromise, of which gift-giving is just one part of the puzzle. If you have a partner, and your partner has family, then it is a rare couple who doesn’t dance a delicate balance between trying to keep all of the people happy all of the time. 

Immediate family, extended family, and family friends all pull on your time and your wallet during the holiday season. This can often come at the detriment of your enjoyment of the holidays, making the festive season something to be endured rather than enjoyed.

Some people love to give and it gives them immense pleasure to do so; I like believing your partner has a huge heart and gets as much from giving as they do from receiving gifts. And, of course, the other side of giving is receiving, so while you arrive at their family’s home and empty your car of the gifts you are giving away, you are likely also filling it up with gifts you have received for the drive back home. Giving is a two-way street.

What exactly is a “big Christmas spender”?

In my home, PocketSmith has helped clear up many a miscommunication when one of us has assumed the cost of something only to get pushback from the other.

I’d encourage you to put some numbers around this “big Christmas spending” to find out exactly what amount of money we are talking about here.

When each gift turns up as a transaction in PocketSmith, code it to a “Gifts” category and write notes about who the gift was for. This way, you can both see the reality of your generosity at a glance. Plus, this information will help you shape your generosity from now on.

I looked at my family’s gifting and saw that we spent $1,700 on gifts last year. This works out to $33 a week or $142 per month.

Because I put a small note with each transaction saying who the gift was for and why, e.g. Mum’s birthday, I’ve created the perfect template to use in the coming year.

Too much spending or not enough?

Only once you have actual figures can you decide what is too high for you, and too low for them. PocketSmith offers you the chance to add context to your conversation about gift-giving and allows an open discussion.

For example, we gave the same dollar amount ($1,700) in gifts as we spent on electricity. We spent two times that amount on clothing. We spent slightly more on gifts than on our two pets! We spent three times the amount on gifts taking holidays throughout the year.

From an earnings perspective, given I make about $24 an hour after tax, I had to work 70 hours to earn the $1,700 used solely to buy gifts for friends and family. I only worked 14 hours per week, so I had to work for five weeks to earn enough money to buy gifts. I ask myself — is this too little, too much, or about right?

Putting a bit of context behind your numbers can create some sobering observations. You don’t see the whole picture of generosity when you look at each gift/expense in isolation. It’s only when you add it all up that you know the extent of it. 

Then you need to have the conversations and ask each other, in the broader context of what you are trying to achieve as a couple, does this level of spending seem appropriate?

Once you have the facts, devise a plan

Hopefully, digging down into the facts, figures and time spent on giving gifts creates some discussions, and you can find some common ground about how to structure your gift-giving. How much feels like the right amount for both of you? In our case, we feel comfortable gifting this amount across a year, and knowing who we want to give gifts to and how much we have to spend helps us plan. 

Create a gifting sinking fund

Starting on January 1st, I open a new bank account, call it “Gifting” and set up an automatic transfer of $33 a week. This will begin to build all on its own and over the course of a year will grow to $1,700. As a gift is purchased, I use money from this account to pay for it.

Create a gifting list

By using the PocketSmith transactions and notes you have from the previous year, you already know who you are likely to buy for in the coming year, so create a gifting list of each and every name. 

Make sure to include birthdays, Christmas, anniversaries and weddings and any other occasion that requires a gift. 

Finding balance between your two values

If you are more reserved about Christmas gifts and feel more comfortable spending less on people you want to give a gift to, then do so. Give the appropriate gift to the person because no one is keeping score. It took me years to learn that when I asked someone what they wanted, and they told me it was something relatively small and inexpensive, they meant it. Gift the gift they want.

If you have created a list that still feels extravagant to you, but feels spot on to them, then I’d put the onus on them to find the money required to bridge the gap. Task them to make up for the shortfall.

If you can’t beat them, join them

Sometimes in life, we have to feign interest. If you really want to keep your big Christmas spender of a spouse in check, they might need you on their team to reign in their generosity when it comes to shopping. Because you have a list of gifts, as the year trundles along, help them buy them early and at a discount, using money saved in the gift bank account.

Help them fulfill the list throughout the year instead of waiting until Christmas is upon you. Then tick them off your list. This removes all the drama and the panic shopping as December 25th draws near. The gifts, the seasonal decorations, and the food have all been thought of and purchased.

Some people love to give gifts

I’m not an overly creative gift buyer, but when I’m given a gift by someone who clearly loves to give gifts and has thought long and hard about what I would like to receive, it is a joyful experience for both of us.

I’d hate for joy around to be stamped out around the holiday season when you know there is an argument looming over the whole gift-giving process. Before Santa jumps aboard his sleigh, work together to put some parameters around gifting as a family. I’m pretty confident that you can find a compromise if you approach a conversation with an open mind, acknowledging that they love to be extravagant and give gifts, but this is less important to you. You can all enjoy the reason for the season, which is, as you say, to spend time with loved ones and give thanks.

Got a burning money question for Ruth? Send them through to [email protected]!

Ruth blogs at all about how she and her family handle money. What’s the secret? Spend less than you earn, invest the difference, avoid debt and budget each dollar that flows through your hands. She firmly believes that if you can just get the basics right, life becomes easier from there on in.

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