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Top 10 Holiday Gift Giving Tips. Maintain Your Financial Sanity

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Buying holiday gifts can lead to greater debt as well as increased stress, family arguments, depression, loss of sleep, headaches and even anxiety if not planned-out properly.

While it may bring you tremendous satisfaction to see your friends and loved one’s expressions of joy and amazement while ripping open their holiday presents, consider utilizing this time of year as a “teachable” moment on both gratitude and personal finance.

As you struggle with your invitations and shopping lists while battling long lines at the mall, the following holiday gift giving tips and money-mindset strategies should help you to gain some financial sanity and control during the hectic holiday shopping season.

1. Budget in Hours

When buying holiday gifts or experiences for yourself and others, consider budgeting each purchase in hours not dollars. This unique perspective will help put your gift purchases and impulse spending in a new light.

For example, that snazzy $9K Rolex you’ve been eyeing would cost you 225 hours of work if you earn $40 per hour. This equates to over a month of your salary or approximately 11% of your annual income.

2. Eliminate Envy

Social media can really mess with your money mindset at any age. Don’t let envy get the best of you when checking out your friends’ new expensive ‘toys’ posted on Face Book along with their “selfie pics in remote locations.

Don’t benchmark your spending or your definition of success based on your friends’ social media posts. Exercise restraint! Shopping should not be a competition to see who buys their kids or grandkids the most expensive and luxurious gifts.

3. Be Frugal

In today’s “PC” (politically correct) post-recession economy where people are being a bit more frugal with their money, take caution in giving lavish gifts that may inadvertently brand you or your business in an ostentatious light.

Many industries have strict guidelines that forbid excessive gifts to employees or clients.

4. Create a Wish List

Whether you celebrate Christmas, Hanukkah, Festivus or Kwanzaa, don’t just “wing-it” with your gift giving goals. Set a budget with your friends and family members so there are no judgments made and less money wasted.

More than 20% of returns happen during the holiday season – about $60 billion per year in merchandise in recent years, according to surveys by Optoro, a logistics provider. Huge trailers of returned goods end up at outlets and flea-markets.

For those looking to avoid adding any negative environmental impact this holiday season, we would avoid gifting clothing. Surveys indicate 75% of all clothing gifts are returns (due to size or style issues) vs 20% returns for technology, outdoor & sports gear gifts.

Have your loved ones create a gift “wish-list” in advance, while setting reasonable guidelines and expectations. This may help to reduce unwanted gifts that end up being returned each year which add to the billions of tons of waste- and wasted money.

5. Pull Family Resources

Expressing love, gratitude and thanks should not be a financial burden to the gift giver.  One of our most valuable holiday gift tips is to be resourceful.

Consider group gift exchanges where each person chips in an amount of money to buy another family member or coworker a gift that may be nicer than what you could have afforded to buy yourself.

6. Combine a Gift with a Future Vacation

Millennials have gained a reputation for their tendency to prioritize experiences over products and are now even influencing boomers. A study by Harris Group found that 72% of millennials would rather open their wallets based on experiences rather than on material items. The media romanticizes this generation’s passion and often attributes these desires to be more worldly as compared to past generations.

Buy something you can do together with your spouse, loved one or child. For example, purchase a trip or a cruise as a needed vacation. By combining a holiday gift with a future vacation or experience, you are saving money and providing an experience you both will remember for years to come.

7. Give the Gift of Education

Contribute cash to a kid or grand kid’s 529 prepaid tuition program or 529 savings program as a gift. Earnings from 529 plans are not subject to federal tax and generally not subject to state tax when used for “qualified” education expenses such as tuition, fees, books, as well as room and board.

Although 529 plan contributions are not deductible for Federal income taxes, over 30 states, including the District of Columbia currently do offer a State income tax deduction or tax credit. In most cases, the taxpayer must contribute to their home state’s 529 plan to qualify for this benefit

Unlike Coverdell Education Savings Accounts or Roth IRA’s, 529 plans have no age, income or annual contribution limits. Contributions up to $15K per individual per year (IRS) ($30K for married couples) will also qualify for the annual “gift tax” exclusion amount under current Federal estate rules.

8. Gift a Stock Certificate

Purchase a small number of shares of a blue-chip company stock for a kid or grand kid in a “custodial account” and give them a framed- stock certificate as a gift.

There are a few reputable online retailers that provide this service in a few easy steps. Purchase a stock from a brand they will be familiar with (such as Disney) and review the value of the stock with them every December.

As responsible parents (or grandparents), educating kids about the value of money and investing may be a gift that will benefit them long after the excitement of the holiday season is over. Perhaps they may even cash in their gift at age 18 to help finance part of their college tuition.

9. Pay in Cash

Utilize cash for your holiday gift purchases where possible and make sure to pay off your credit card purchases in the next month if utilizing plastic. Exercising financial discipline with your shopping online and at the mall could save you significant headaches and money in interest payments over the long run.

Don’t rack up thousands of dollars on plastic while inadvertently hurting your credit score over time. Also, avoid get sucked into opening new retail credit cards with up front discounts and low teaser rates which reset in a year to over 18%.

10. Get Creative Utilizing Gift Cards

When shopping for gifts for a family member, coworker, client, friend or employee, get more creative than buying a generic gift card from Visa or AMEX. Take a few minutes to show you actually care and come up with a thoughtful idea, even if delivered in plastic or emailed to their in-box.

Provide a unique service or experience that someone will appreciate whether it’s getting their car detailed, a day at their favorite spa or an experience they can share with their kids (or grandkids) like an upcoming music, sports or theater event.

Many people today enjoy receiving a subscription gift for a few months to a year- whether from a food or wine of the month club (like Harry & David) or something clever for their beloved pet dog, such as from Bark-Box.

For more information on our firm or to request a complementary investment and retirement check-up with Jon W. Ulin, CFP®, please call us at (561) 210-7887 or email [email protected]. Get Started Today: Contact Us .


Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing

The information given herein is taken from sources that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without Ulin & Co. Wealth Management’s or IFP’s express prior written consent.

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