While you’re likely excited for the upcoming holidays, don’t let your holiday gifts spending give you a spending hangover in the new year.
In a recent Rubicon Project study, which specializes in online advertising technology, millennials were asked about their shopping plans for the upcoming holiday season. The findings were eye-opening! They found that Millennials were planning to spend approximately $1,427 on their holiday gifts shopping this year. In addition this projected amount is up by 38% from what Millennials were planning on spending last year.
Ladies, this means that you and I, and people just like us in our twenties and thirties are going to be spending almost $1,500 on holiday gifts this year.
Correction…. Not I and hopefully not you!
This amount just boggles my mind. It’s an exorbitant amount of money to spend when there is so much else we could be doing with that kind of money. You could take an all-inclusive vacation; put the money in an emergency savings account for when you really need it; or even put the money into your retirement fund.
Hypothetically, if you were to put that money into your retirement fund and you left it there for 35 years, with compound interest of 5%, at retirement you would have almost $8,000. If you cut the projected spending in half, and just put $700 into the fund each year till you were 65 again compounding at 5%, at retirement you could have a possible $72,000!
I know it’s difficult to think about your retirement when you are young and want to impress people or loved ones with amazing gifts but bear in mind that time creeps up on you quickly and it’s important to be forward thinking.
So how can we go about still buying gifts and enjoying the holiday season without dealing with the repercussions of going into debt or paying more interest on debt already incurred?
Here are some suggestions:
- Try getting together with your family and suggest that you all chip in together to get each family one gift which could be something they really want and you wouldn’t have been able to buy it individually.
- Perhaps you could get together with your family and decide to enjoy one joint experience that each person would cover their own cost. What would be nicer than spending time together in the holiday spirit?
- Rather than giving gifts to everybody, try the Secret Santa tradition where each person picks somebody’s name out of a hat and that way everyone gets a gift and its great fun guessing who it came from.
Regardless if you implement the above, make a holiday plan with a particular budget that won’t send you reeling after. Consider how much money you actually have without going into debt for the holidays and stick to that plan.
Trust me, the people in your life are going to appreciate the holiday gifts, but the cost is not a reflection of how much you care about them or how much you love them. It’s all about thoughtfulness, being together and the holiday spirit!