By Lee Sherman
Today is Black Friday, the day after Thanksgiving when retailers steeply discount their products, a day that has become at least as much of an American tradition as Thanksgiving itself. Black Friday is the ultimate manifestation of our consumerist culture and one that can strike fear into the hearts of the Average American.
As you peruse the sales today, you might be wondering how much of your disposable income makes sense to spend on gifts for your family and your friends. Holiday Spending like any other kind of shopping is discretionary spending and comes after fixed expenses like housing, food, clothing utilities, transportation, childcare and medical. But that doesn’t mean you shouldn’t plan for it. Holiday Spending adds an element of peer pressure. Your kid might beg you for a Virtual Reality headset for Christmas because that’s what his buddy has been promised by his parents. But are they just being frivolous, trying to show off, or do they actually have that much disposable income? Let’s say you want to get your college-age kid a computer for school. Do you buy a cheap Chromebook that gets the job done or do you splash out on the latest MacBook Pro with all of its bells and whistles? Other giftable items are the same. You are trying to strike a balance between what the person needs and what they want.
Budget for Holiday Spending
You should start with a Holiday Spending budget based on what you can actually afford. Holiday Spending is pretty far down on the priorities list compared to other common household expenditures but with a little thought and careful planning, you should be able to get something for all of the special people on your holiday gift list. It’s not too late to create a savings account just for your holiday spending. And even though Black Friday is already here, you are still a full month away from Christmas and Hanukkah so there’s plenty of time to avoid frantic last-minute shopping and the shipping charges that come with it.
The old adage, “it’s the thought that counts” might sound trite but it’s never been truer than it is today. Instead of spending vast sums of money, think carefully about the person you are shopping for and what they might like. It’s possible to find something for just about anyone on your list that they’ll love. Conversely, if you are buying for a loved one (say your wife) you might want to splash out on expensive jewelry.
Are they an early adopter? They probably have the latest iPhone already. So, buy them the AirPods Pro instead. Are they a teenage fashionista who’d like to rock Louis Vuitton, Chanel, or Gucci? I’m guessing they’ll be satisfied with the runway knockoffs you can get at H&M or the quality staples you’ll find at Uniqlo. With more and more people forgoing gifts these days (call it the Marie Kondo effect), you might want to make a plan to meet up in real life (at a park, a museum, or a meal out for those foodies on your list). Other reasonable ways to enjoy the holidays include donating to a person’s favorite cause or agreeing to spending limits on gifts, the same way you would with a Secret Santa gift exchange in the office.
Lee Sherman is a contributing writer to www.myperfectfinancialadvisor.com, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.