Tips to Avoid Overspending on Gift Giving

Tips to Avoid Overspending on Gift Giving

November 20, 2020

Pretty much everyone can agree 2020 has been a very weird year. It will be interesting to see how the holiday season comes together as everyone adjusts to an increase in COVID restrictions. Many families will be skipping large gatherings for Thanksgiving and Christmas this year. As for gift giving there are people who are struggling to make ends meet due to job loss or scaled back work hours. These folks most likely will be concerned about spending during these difficult times.

One industry that is bound to do very well this holiday season are online retail outlets. People are going to want to avoid crowds whenever possible and more than likely will shop from home. It is good to have the option to shop from home. Gift giving is fun , but it is important to keep spending in check and be cautious when shopping online. It is easy to overspend, especially when you do not immediately receive the goods you purchased.

There is a bit of psychology that occurs with online marketing. You have probably noticed that when you search online for an item suddenly you are seeing ads pop up in your browser, on Facebook, and via email about that item. This is intentional marketing that occurs through browser ‘cookies’. Cookies are data stored in your browser that contains information about your online habits. It helps browsers, such as Google, determine what information has the most appeal to you. It can be very manipulative, so try not to fall for any marketing ploys. Ignore the popups and shop online with intention and with a budget to help you avoid overspending.

A few tips to keep in mind when shopping for yourself or loved ones: 

  1. Do not binge shop.

    Shopping for the sake of shopping is a surefire way of throwing money away unnecessarily. If shopping is a hobby for you, then it would be wise to keep it in check. Determine how much you can REALLY afford to spend and then stick to the budget. Think of it this way, overspending on a gift that you give takes away from a need that you have. Paying the electric bill is a need. Giving a gift you cannot afford to give is not.
  2. For holidays and other occasions, make a list of who you would like to bless with a gift.

    Determine how much you can afford to spend on each person and stick to that number. Do not forget to include sales taxes, the cost of shipping, wrapping paper and cards, too. Sometimes the little details of gift giving can become a bigger cost than expected.
  3. Consider a monetary gift.

    If you are in a good financial situation and can afford it, consider giving your loved ones a monetary gift that will continue to grow into the future. A financial gift such as 529 plan contributions, savings bonds, and Roth IRA contributions would be a gift that would last a long time. Another gift idea is paying for a financial planner for your teenager or adult children. Shenandoah Valley Financial Services consultants would be happy to conspire with you to provide a financial planning gift package. Reach out to us to discuss it.
  4. Once you have a list in mind for gift giving research each item to find the best deal possible.

    Do not automatically default to Amazon or Costco. Although they have great products, and their online platforms are easy to use they are not necessarily the least expensive outlet.
  5. Be careful with Black Friday and Cyber Monday ‘deals’.

    Amazon is particularly good at promoting deals during the holiday shopping season; however, this does not mean they are necessarily the best option. You may find online retail stores and even local shops have similar or even better discounts right before a shopping event, or immediately after. For instance, the first week in December is still a good time to find deals for Christmas. Also, Black Friday and Cyber Monday often leads to shopping for yourself. That is fine, too, if you have the need and can afford it. But if not, you may get caught up in spending money on items you truly do not need.
  6. Consider shopping local.

    Yes, it is definitely harder (and risky) to do in person shopping this year with COVID restrictions in place, however, many local jewelry stores, boutiques, bakeries, and niche stores (such as vineyards, brew-your-own beer, and equestrienne shops) have embraced technology by offering online orders with curbside pickup. Local businesses in your neighborhood may have some amazing merchandise at a good price, and they would greatly appreciate the support from their community.
  7. Consider a gift from the heart to someone truly in need.

    With so many struggling during these difficult times, a gift of your time, food donations and monetary giving to worthy causes is a gift that keeps on giving. There are many charities in Shenandoah County, Frederick County, Winchester city, and surrounding areas in Virginia that would be thrilled to receive your donation.

If you would like to discuss your budget, provide a financial plan as a gift, and/or tackle your own financial planning for 2021 please schedule a complimentary, no obligation, financial review with John Clawson today.

This is for educational purposes only and should not be considered advice.  (11/20)