It’s hard to untangle gift giving from the winter holidays. If that’s all you’ve ever known — like most Americans — it’s almost a given: At the end of every year, you brace your bank account for a spectacular holiday shopping splurge.

Here's how to take a more mindful approach to holiday spending this year with these three tips so you can celebrate your way, with way less money stress. 

Create a holiday spending budget

Annual gift giving calls for a budget. One of our favorite budgeting methods at Ellevest is the “one number” approach, which ‌is ‌especially helpful for figuring out ​​how to stop overspending. Here’s how it works:

• Add up all your monthly fixed costs — the things you pay for every month, like rent, subscriptions, utilities, and minimum debt payments. 

• Then add up everything you’re putting toward Future You, like debt payments beyond the minimums and investing.

• Add up your non-monthly expenses like annual fees, then divide those by 12.

• Subtract those three numbers from your monthly take-home pay. 

• What’s left over is your “one number” that you can spend each month on everything else.

If it’s late in the year, you’ll factor your holiday spending costs into your monthly “one number.” Be prepared: You might have a smaller amount to spend over a shorter period of time. That doesn’t mean you should grab your plastic — nobody wants to go into the new year with credit card debt. Instead, look at ways to extend your budget. Maybe you can use credit card points or cash back to buy things on your list.

Feeling a little disappointed? Think of it this way: Now you know exactly how much you can afford on holiday spending without doing financial damage to yourself (and Future You). That might be the most important gift you give all year.

To maximize your holiday shopping potential, consider the cost of gifting as a “non-monthly expense” in your “one number” starting in January. Then watch each month as your holiday spending budget grows toward your goal.

Have a holiday spending talk 

The way people spend money has changed a lot over the past few years. For you and the people you care about, holiday shopping might be more stressful than it was in the past. Your holiday spending budget will make that clear for you. But wondering where everyone stands is also stressful. 

It might be awkward to think about money talk entering the group chat, so here are some ideas to break the ice with friends and family:

• Throw it out there: 

Life has been so expensive lately, and now it’s almost holiday time!? Is anyone else feeling a strain on their budget for gifts? I’ve been thinking about ways to celebrate for less. Can I share them?

• Tell it like it is:

I’m *really* excited for the holidays, but I don’t think gifts are in my budget this year. Would you be open to trying different ways to celebrate? Or tweaking our traditional gifting plan? 

• Swap in shared interests: 

“I know this group loves a good dinner party. Instead of gifts this year, could we schedule a special get-together for the new year?”

If you decide not to give gifts, celebrate your shared values.

With holiday spending off the table, there’s an opportunity to lean into a different kind of “gift”: one that represents your shared values. You know, the ideals that drive you and your everyday choices, like authenticity, creativity, or service. If you haven’t identified your personal values, make a list or download our Core Values worksheet (free for Ellevest clients). Next, zero in on the values shared by your group. Maybe ask yourself what’s important about your time spent together, and how the gifts you’ve all exchanged in the past have reinforced that. How can this year feel just as meaningful?

For example, say your family usually gives gifts to show each other love and appreciation. You could use the time you typically spend holiday shopping to write a letter of gratitude to each person. Writing down how much someone means to you can be for you both. 

Or say your friend group values togetherness — that whatever time you manage to carve out for the group, especially in the middle of a busy season, means a lot. You could plan a holiday decorating day or spend an evening baking holiday treats.

Or maybe to your siblings, tradition is important — when you suggest changing it up, they tell you, “But we’ve always done it this way.” If it’s not the right time to start brand-new traditions, maybe you could honor the ones you already have differently, without extra holiday spending. Can you still gather remotely at the “same time, same place”? Can you re-wear ugly sweaters or pajamas from past seasons? Can you agree to push gifting to a time of the year when there’s more wiggle room in the budget?

If you did have a budget for gifting — big or small — you can always roll it over into your holiday shopping budget for next year to get ahead of the game. Or, consider making a charitable donation for this year’s Giving Tuesday. 

If you go ahead with gift giving, coordinate a plan.

Now that you’ve agreed gift giving is doable, decide on what that’ll look like to help the holiday spending budget stick — and get everyone feeling good about the plan. You can try: 

• Setting a maximum dollar amount for each recipient. “We’ll spend $50 per person, and you can put it into one gift or several.”

• Only giving to the kids under an agreed-upon age or generation.

• Organizing a secret gift exchange or gift grab-bag to have everyone draw one name and buy one present. 

• Deciding on a max number of gifts instead of a max budget. This option could let people in the group who have a bigger budget spend how they like without it feeling too obviously lopsided.

Also, ask if your group feels comfortable sharing the meaning behind each gift when it comes time for the big exchange. It’s a small gesture that’ll remind each other of your shared values — and may even become a new tradition. 

Practice intentional holiday spending

True: We’ve been focused on cutting back on gifting costs. But now that your budget is locked and your plan has the green light, that doesn’t mean you have to pounce on the first affordable thing you see. Those shared core values you sorted out? They can help you use your money for good by practicing intentional spending with your holiday shopping.

Your core values can help you determine what companies, causes, products, and organizations you support with your holiday spending. Maybe that means shopping earlier to buy from a small business instead of indulging in the convenience of next-day shipping. Or maybe you purchase something from a local maker to cut your carbon footprint a little. Or you might spend more on a smaller item that’s sustainably made. 

At the end of the day, you’re making tradeoffs. But when your values guide your holiday spending, it should feel less like a sacrifice and more meaningful. 

The same idea applies to deciding how much to spend on each person on your list. Besides being another guardrail for overspending, it can help you be more thoughtful about what you buy. Maybe your best friend has everything, so you lean into a less expensive gift that has more meaning. Now, you have the wiggle room in your budget to get your sibling that one thing they really need. The more you think about the why of gifting, the easier intentional holiday spending gets.  

Need a second set of eyes on your holiday spending plan? Book a complimentary 15-minute call ‌to figure out which Ellevest session is the right option for your financial goals.

Disclosures