When we were in the thick of a recession in 2009, I was working as a newspaper reporter. News cycles were filled with stories about foreclosures, businesses shuttering and mass layoffs. When December rolled around, I remember being tasked to write a story about how to prevent the brutal economy from throwing a Grinch into people’s holiday plans.
As I was interviewing people, I recall a source flipped the script, and asked me a simple question: “What’s your favorite childhood, Christmas-time memory?”
(I’ll pause for a moment as you think of your own.)
Like a slideshow, some great memories began flashing through my mind: Making Christmas cookies with my aunts, grandma and mom; an unusually balmy Christmas day spent rollerblading with my dad; and how our neighborhood would have a Christmas Eve party, and, one year, we kids swore we saw reindeer tracks in the snow.
The idea here? None of my memories centered around gifts. In fact, it was hard for me to even recall the presents I received. All of my fondest holiday memories revolved around time spent with family and friends.
While we’re not in a recession this year, budgeting for the holidays is still relevant for most families. Of course, you already know the 101’s of saving during the holidays: Setting a budget and sticking to it, shopping sales and maybe even sending e-cards rather than mailing them out.
But here are some expert-level tips that will not only help you save, but also manage expectations in your family.
1. The ‘Rule of 3’ when giving presents
Cherie Lowe, a personal finance blogger at Queen of Free and author of the book “Slaying the Debt Dragon,” tells us that her family re-thought the holidays while paying off more than $127,000 in debt. She set up her children’s expectations by giving each child three gifts. One is the “wow” gift, frequently a toy. The other is a piece of clothing. And, the third is a book.
“These boundaries helped us exercise wisdom when it came to making purchases,” Lowe says.
2. Give ‘family gifts’
Gift-giving can become majorly expensive when you have a large, extended family. Lowe says she also re-formulated how she gave gifts to extended family.
“Instead of buying for each and everyone of our brothers, their wives and their kids, we began giving a gift for the entire family,” she explains. “This took pressure off our budget, but still allowed us to give good gifts to the people we loved.”
Some ideas for a family gift? A “game night” bundle with fun board games and snacks. Or, you could choose a movie night theme with gift cards to the movie theater or some DVDs, popcorn and popcorn seasonings.
3. Pick a charity
Donating to charity such as a toy drive or local food bank can help families focus on the meaning of the holidays—love and giving—which can then curb excessive spending, explains Orna Rawls, a licensed marriage and family therapist.
“By helping other people within our means, we raise socially conscious children, protect our bank accounts, save our homes from clutter and contribute to the community,” Rawls says. “A win-win for sure.”
4. Wear high heels when shopping
Admittedly, your podiatrist isn’t going to like this one, but consumer research is backing us up. A 2013 study from Brigham Young University found that consumers experiencing a heightened sense of balance are more likely to weigh their options and go with a product that falls in the middle of the high-end and low-end scale.
“If you’re someone who tends to overspend, or you’re kind of an extreme person, then maybe you ought to consider shopping in high heels,” suggests author Jeffrey Larson, a BYU marketing professor said in a news release about the study. (Side note: We’re guessing he’s never felt the pain of traipsing through a mall in stilettos!)
5. Buy gift cards at discount
Sites like GiftCard Granny discount gift cards, and, applying some good ole’ fashioned supply-and-demand principles, you’ll find deep discounts on gift cards that aren’t as highly coveted. As an example, restaurant gift cards are up to 57 percent off and clothing ones are up to 47 percent off.
6. Wrap gifts creatively
Wrapping paper, gift tags, tissue paper, ribbon and other gift-wrapping accouterments can be total budget-busters! Instead, you can DIY some gift wrap.
This tutorial from Instructables.com shows how you can turn a cereal box into a gift box and there’s instructions from Martha Stewart for transforming cupcake liners into adorable paper carnations to adorb boxes. You can also DIY a gift bag with some old sheet music and greenery with instructions from The Feathered Nest blog.
7. Understand the ‘paradox of gift giving’
You may think that pairing an expensive cashmere sweater with a pair of cozy socks that match will impress the recipient. But consumer research from the University of Virginia actually found that bundling together an expensive “big” gift and a small “stocking stuffer”-like gift reduces the perceived value of the overall package for the recipient.
The researchers believe that’s because the recipient evaluates the gift with an averaging strategy, and the lower-cost item brings down the value of the expensive gift. What we’re getting at? More isn’t always better, according to science.
8. Get your Christmas tree at the thrift store
Before you head to the store to buy a brand-new Christmas tree, check your local thrift store. Many could rival the Christmas tree lot (except with, you know, artificial Christmas trees).
Pro tip: If the tree you’re eyeing as strings of lights attached, double check that they’re still working before you haul it home. You’ll probably be able to find some vintage decor, as well, like ornaments, snow globes and cookie tins.
9. Have Santa check-in
The Passionate Penny Pincher published a blog post about budgeting for Christmas. One of the nuggets of advice? Don’t try to keep up with the Joneses. And, if your children question why Santa brought more toys to the neighbor’s house, you can tell them that Santa checks in with parents before he hands out Christmas gifts.
“Since our children know we choose to live differently, they seem satisfied with our answer,” writes Laurie from The Passionate Penny Pincher.
What are your favorite ways to save money while making the most of the holidays?