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No one wants to be called Scrooge. They don’t want to be The Grinch either. Christmas and the overall December holiday season is a time where generosity is the word of choice. Research shows American families spent about $900 on holiday gifts in 2024.1 TV advertising tells a different story. After you eliminate the Medicare Advantage ads and the “Ask your doctor about” drug ads, the types of ads left are often car ads, jewelry and perfume ads. Can you see how clients overspend at Christmas? How can you help them?
As their financial planner or advisor, this fits within the category of budgeting. If you are helping them dig their way out of debt, neither them or you want them hopping back in again.
Here are some ways to look at gift giving over the holidays.
1. Determine who gets gifts. Family members you see in December are on the list. Young nieces and nephews usually make the list. Your spouse or partner tops the list. Your parents and in laws are on the list too.
2. Do you exchange gifts with friends? There is a difference between a house present and a holiday gift. If they attend your party and bring a bottle, this does not mean you need to ring their doorbell and hand over a different bottle.
3. Establish a threshold. This might sound mean. “How can you put a price on love?” Do it anyway. You and your partner agree on exchanging one gift each. You agree on a dollar amount. You often have a lot of fun finding the perfect gift within your range.
4. Discuss a budget for each recipient. You use the same logic to set an overall budget amount for all gift giving and assign a dollar amount for each recipient. Make notes about their interests. We know a financial planning couple who used this strategy. They came up with the most thoughtful gifts.
5. Shop all year. OK, it might be too late for that. Gifts will be expensive or sold out if you wait until the last week. You will find things on sale throughout the year. Setup a present closet at home. Know where the holes on your list are. When you see the ideal gift at the right price, buy it and put it away.
6. The one, collective gift. You would not spring for a car as a gift unless you were very rich. If it is a family member and the gift is a big one, get the group together and talk about giving a joint present.
7. When the vacation becomes the gift. You want to give your partner a gift they will remember this holiday season. They feel the same way. You also want to take a cruise next summer. Make the future cruise the Christmas gift. Put down a deposit. Get a picture of the ship, frame it, wrap it and open it together on Christmas morning.
8. Service people gifts. In cities like New York, you are expected to give the doorman, parking garage attendant and others a holiday gift. Find out what is expected (from other neighbors) and plan accordingly. With my business I would give small gifts to the folks at the bank, post office and office supply store.
9. The secret Santa. You see this as a plot element in Christmas movies. Instead of buying a gift for every coworker, you each draw a name and buy them a gift within a specified price range. Everyone gets a gift and everyone has a good time.
10. The charitable gift. You know people who have everything. So does your client. Finding a gift is both difficult and expensive. Consider making a small gift in their name to a charity that is important to them. You might buy them a one year museum membership.
11. Baked goods. If you are a good baker, this is an option. You want to give gifts to the neighbors. A nice box of freshly baked cookies is a good gift. You can find gift boxes or tins at an art supply store.
As their financial advisor, you can help clients be generous while also keeping their generosity within a budget
Related: How To Persuade Clients They Need an Emergency Fund
1. https://explodingtopics.com/blog/christmas-spending-stats