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The time left for holiday shopping is quickly dwindling. You’ve been searching in vain for the perfect present, and finally find one — for a much heftier sum than you’d consider spending any other time of year. But ’tis the season to splurge on those you love, right?
This is the time of year when American consumers ramp up spending — and when some succumb to an end-of-year overspending cycle that can hike their credit-card balance and leave their budget in shambles. Gifts for friends and family can be one of the biggest culprits, as people often feel pressure to prove affection with a lavish present.
It doesn’t have to be this way.
There are approaches to gift giving that won’t ruin your budget or your relationships, and you can cut back — or even skip out entirely — on buying gifts during the holidays. In fact, experts told MarketWatch, there are actually some very good reasons to do so. Here are three of them:
No. 1: You’re prioritizing your finances this year — instead of overspending
It’s OK to buy fewer gifts this year, Paige Pritchard has told her 634,000 TikTok followers. In fact, it’s OK if you don’t buy any gifts at all.
Pritchard, a money coach and the founder of “Overcoming Overspending,” a program and online community designed to help women develop sustainable spending habits, has been trying to encourage her followers to prioritize their financial health this year over the “perfect” holiday they may often feel obligated to provide for their families.
“I think we get this idea that the holiday has to be magical. That doesn’t really exist at any other time of year,” she said. “The pressure [to spend] can be greater this time of year, but it’s self-imposed.”
Too many shoppers spend beyond their means in the name of holiday cheer, she said.
Many Americans actually go into debt to finance their end-of-year purchases. Last year, 35% of consumers took on holiday debt, according to a report from LendingTree. The average amount owed was $1,549, and more than a third of those who went into debt said it was going to take them five months or more to pay off.
Excessive spending isn’t a requirement for connecting with family and friends this season, Pritchard said.
“I’ve been in situations in the past where the one thing I could afford was a plane ticket home for Christmas. My presence was the present,” she said. “I found that pretty much no one cared.”
Holiday spending may be an even bigger concern this year after high prices continued to squeeze household budgets in 2023, Pritchard said.
“Don’t put yourself in a financial pinch; don’t go into debt,” she said. “The people who truly love you don’t want to see you pay 28% interest on a credit card for a gift that you got them.”
No. 2: They (probably) don’t want the gift you’re giving them
Research shows we’re not always as good at giving gifts as we may think. We opt for superficial gifts over sentimental ones. We offer material goods instead of experiences. We focus on presents that are “fun” as opposed to useful.
“I’m not saying we’re always getting it wrong,” said Julian Givi, an assistant professor of marketing at West Virginia University who studies gift giving. “[But] the research shows there are several ways that we tend to err.”
One of the key mistakes that gift givers make when selecting and buying a present is focusing on the wrong part of a gift exchange, Givi explained. Instead of considering how the present might fit into the recipient’s life weeks or months in the future, givers focus too much on the moment the recipient opens their present. That can lead to unwanted items that end up just collecting dust, Givi said.
Take a gag gift, for example. “It might be fun in the moment,” he said. “But three weeks later, if I’m sitting there with a gag gift, it’s not going to be that great. I might want to receive a less fun gift that is actually reasonable for me to use.”
As gift givers, we also tend to focus too much on the price tag of an item, Givi said — even though as recipients, we’re much less likely to attach our appreciation of a present to its monetary value.
“We basically think there is a correlation between how much we spend and how much they’ll like it,” he said. “As [gift] receivers, we never see one.”
It’s common to imbue the gift-giving process with a lot of unnecessary stress, Givi said, viewing exchanges as a reflection of our closest relationships. The reality is that the stakes are almost always lower than they seem — and a small, sentimental present is just as meaningful, if not more, than an extravagant one.
“We think there’s a major downside if we don’t do a great job of gift giving,” he said. But the research shows that “we tend to overestimate it.”
No. 3: Your gift might just go to waste
Holiday gift giving can also lead to a lot of waste — as in, literal trash.
Each holiday season, Americans produce 23% more waste than they do at any other time of year, said Malia Becker, an organizer at the Center for Biological Diversity who manages the center’s Simplify the Holidays campaign.
That includes a fair number of unwanted gifts. Last year, more than a third of shoppers were planning to return at least one gift they received. About a quarter of those returns will head to the landfill, NPR reported last year.
Over the course of the entire year, U.S. returns create almost 6 billion pounds of landfill waste, according to estimates from the returns and resale company Optoro.
Overconsumption has become a regular part of the way many of us celebrate the holidays, Becker said. The Simplify the Holidays campaign was launched in part to encourage people to reconnect with other values of the holiday season.
To produce less waste, she suggested giving the gift of an experience or time, crafting something homemade or purchasing an experience like concert tickets or art classes.
“There are these beautiful gift ideas that maybe don’t come to mind that are no less meaningful or special than getting a gift in a box,” Becker said.
It’s highly likely that we all need less stuff anyway, said Joshua Becker, founder of the Becoming Minimalist website. He wrote a post on the site arguing that a focus on gifts has taken away from the joy of the holidays.
“I’m not against the idea. Humanity has been giving gifts to one another to show love and respect since the beginning of time,” he said. “I’m just thinking that we should probably think differently about the way we’re giving gifts.”
Many Americans may actually be open to that idea. According to a 2023 survey from the Center for Biological Diversity, 90% of Americans wish the holidays were less materialistic, and 84% agreed that there was too much of an emphasis on giving and receiving gifts.
Changing that emphasis might make the winter holidays a lot less of a burden, the Becoming Minimalist founder said — on both our wallets and our minds.
“The less focus we put on giving gifts, the more focus we can put on the things that matter,” he said.
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