The holidays have become a time for taking on debt in order to honor the “time-honored” tradition of giving gifts at the holidays. CNBC reported in November that many American still have credit card debt from last Christmas. However, according to this article in The Atlantic, the tradition of gift giving at the holidays started after our country was founded and it was originally focused in giving gifts to children only. Obviously, that changed over time and we now give gifts to not only our children, but our families, friends and often co-workers. This change has been driven largely by retail who want to encourage us to spend more money to grow their profits and this is a great year for them as sales are up from last year.
While it is good for retail, I’m not convinced that the growth of this annual spending frenzy is helpful to the rest of society. The problem that I see with the proliferation of gift giving is twofold. First, people are spending more at the holidays than ever due to social expectations and it drives many people into terrible debt that they take months or, for some, years to get out of. I personally do not want friends or family to ever take on debt to get me a gift; their own financial freedom is the best gift that I can receive. Second, we generate a lot of waste at the holidays in shipping gifts, wrapping materials (read my blog on Eco-Friendly Ways to Wrap Gifts at the Holidays) and in unwanted gifts.
Yet the problem is that people like the tradition of giving gifts and it truly is a nice thing to spend some of your hard earned money and take the time to think about what to get someone that you care about. I think though that we can give smarter at the holiday season, generating less waste, spending less money and hopefully eliminating the cycle of people taking on debt at the holidays. Here are three ideas of how you can revamp your holiday season to give gifts in a more financially responsible and environmentally friendly way.
- Setup a Secret Santa. Rather than buying gifts for all adult members of your family, put all of the names in a hat and randomly assign each member of your family one person that they need to buy a gift for. Set a maximum price for the gift that is affordable for all members of your family; this will vary depending on circumstances.
- Book Exchange. If the idea of only buying a present for one person in your family is hard to imagine, try a book exchange where you buy a book (or eBook) for each family member. Most books can be purchased for under $20, so it naturally limits the amount you spend on each gift. If your family does not mind used books, you can often get them in excellent shape for a fraction of what they cost new, which is good for your pocketbook and good for the environment.
- Make a List. Children make lists to Santa to help parents know what their child is interested in receiving for Christmas. As adults, we should not be afraid to do this so people have a sense of what we will actually enjoy and use. If there is nothing you can use, ask for a donation to charity; my husband frequently does this and it makes him feel empowered to have his holiday season help others.
- Set Spending Limits. I think it is human nature to want to keep up with what the people around us are doing. At the holidays, if we do not set limits on the amount that we will spent per person on each of our family members, I find that over the years, the following pattern emerges: someone buys me something much nicer than I bought them. The next year, I remember what they got me last time and I try to get something just as nice, or more often nicer, since last year they got me something so lovely, I expect they’ll do the same again, and I want my gift to be of equal quality or even of better quality to what they are going to get me to make up for my misstep last season. This attempt to keep up with the Jones can result in spending more and more at the holidays overtime and can be avoided by setting clear spending limits with family members up front that everyone can afford.
Do you have other ideas on how to give gifts at the holidays in a more sustainable fashion that have worked for you? Please share them in the comments!