I’m working with a couple in Massachusetts that have a very common money issue – gift giving.
When I asked them to create a list of all the gifts they buy throughout the year, it came to 57! That’s an average of almost 5 a month! They have a large family and between the holidays, birthdays and special events like Mother’s Day and Father’s Day, they felt like they couldn’t get ahead.
With a new baby on the way and certain financial goals in mind, gift giving was getting in the way. However, the new baby gave them an extraordinary opportunity to remedy the situation.
We devised a plan to have them contact their friends and family members and explain that they need to cut back on gift giving in order to be in a financially secure position for when the baby arrives.
Instead of giving gifts to friends and adult family members, they plan to suggest a few get-togethers – allowing them to replace the exchange of knick knacks with the creation of memories.
I use this strategy myself and so have many of my clients. More often than not, family and friends have wanted to reduce their spending on gifts as well, but were hesitant to bring it up.
In my case, I talked to my closest friends and asked if instead of exchanging Christmas presents, could we instead pool together and rent a cabin at Lake Tahoe over President’s Day weekend. That was 17 years ago and with just a few exceptions, has become an annual gathering. Many of my very favorite memories were made on those trips and I’m always looking forward to our next adventure.
If gift giving is getting out of control, talk to your friends, talk to your family members and suggest an alternative. More than likely, they’ll jump at the opportunity to save money and create memories together.