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Avoid Gift Guilt This Holiday Season. Expert Tips to Keep Your Spending Low

The best gifts often don't come with a high price tag.

Robert Rodriguez / CNET

The holiday shopping season is in full swing. And if you’re feeling the pressure to overspend on gifts, you’re not alone.

There’s a lot of angst and nervousness around gifting this year, according to Shang Saavedra, a CNET Money expert and founder of Save My Cents. Between the resumption of student loan payments and ongoing inflation, many are straining their budgets to afford the holidays. 

There can be a lot of pressure to find the perfect gift or spend more than you’re able to. “You are not alone in feeling overwhelmed when it comes to gifting,” she said. 

But think twice before pulling money set aside for other financial goals out of your savings account or tapping that credit card more times than you can afford. Instead, consider these expert tips on how to navigate the gift-giving season without overspending. 

Set gift expectations with family and friends

Much of the anxiety around gift giving is trying to match the recipient’s effort and spend when finding the right present. Before you start buying gifts, set guardrails with your friends and family first, Saavedra said. For example, you may set a dollar limit of $10 per person or decide to only buy gifts for the children. Setting expectations now can make everyone comfortable participating without worrying about giving or receiving an expensive gift. 

Another way to keep costs low is to try a gift-giving game, like a White Elephant or Secret Santa. “That way, you’re able to spend your money on one quality gift instead of trying to spread your dollar across many people,” said Vivian Tu, founder of Your Rich BFF. “Everybody walks away having a gift that they’re excited about.”

Set a budget and stick to it

To keep yourself on track, you’ll want to set a budget that you won’t exceed. Saavedra suggests dividing the people you’re buying gifts for into three groups: 

  • Acquaintances
  • Colleagues, teachers and others who play an important role in your life daily
  • Close friends and family 

Dividing recipients this way can help you set per person limits by category. For example, you might consider sending acquaintances a thoughtful gesture such as a hand-written card. Or you can keep the spend low by gifting them something smaller, like a holiday ornament.

You may strategically give gifts to your colleagues or your child’s teachers. Baked goods, coffee gift cards and mugs with hot chocolate or coffee are a few low-cost gift options that may fit into your budget. If you have several people who fall into this category, you could save money buying gifts in bulk at wholesale clubs like Costco and Sam’s at discounted prices.

Figuring out how to lower the cost for the first two groups of recipients can free up money for your loved ones, like close friends or family, who you might want to spend a little bit more on, but it’s still best to set a dollar amount you’re comfortable with. 

Resist the urge to turn to credit cards and BNPL options to finance gifts

Although you may want to splurge on your loved ones, spending beyond your budget can lead to debt, which can be difficult to dig yourself out of. While it’s tempting to use a credit card or Buy Now, Pay Later plan to purchase something now and worry about the bill later, it can severely hurt your finances for years to come.

If there is a gift you want to purchase that you can’t afford right now, but know you can fully pay for in a few weeks, then these options might help. But you might also consider Amazon’s layaway option, which has more protections in place to help you avoid debt. And if you decide to use a credit card to finance a purchase, consider a 0% APR card, which can help you save on interest for a period of time.

Don’t wait until the week before Christmas to start shopping

To stretch your budget as far as possible, start buying gifts early to get the best deals. 

If you wait until the week before Christmas, you may find that the best deals are gone. Typically, retailers know when you’re crunched for time to buy gifts and may mark up prices, said Tu.

Amazon, Target and Walmart have all started Black Friday deals early this year. For example, you can save up to $60 on popular headphone brands right now at Walmart, Amazon and Best Buy. 

But there’s still the risk of overspending given longer holiday shopping periods. Most people that are planning to overspend will do so on Black Friday and in December, according to CNET’s recent holiday spending survey

If you set a budget and start now, you’ll have more paychecks to pull from, so you don’t have to worry about affording gifts in a shorter window of time. And you can keep earmark money for gifts in a high-yield savings account to earn a little extra interest, while separating this money from your everyday checking account. Just make sure it’s easy to transfer funds back and forth.

Remember, it’s the thought that counts

Gift-giving should be enjoyable, but if you can’t afford to spend money this year, you have other options. Your time and any other special skills can make great gifts.

One of Saavedra’s favorite gifts for parents with young children is babysitting coupons. “It might cost you time but it would be incredibly meaningful for parents where sometimes babysitting these days starts at $25 an hour. A date night out for four hours could easily cost them $100,” she said. 

Think about how your creative skills can help others. Here are a few other examples of service gifts for your loved ones that you can make coupons or handmade gift certificates for. 

  • Filing taxes for a family member who struggles with this task. 
  • Pet sitting or walking dogs during your friend’s next vacation. 
  • House cleaning for a family with a newborn or a friend who’s busy with work. 
  • Creating a website or logo for a friend with a new business. 
  • Carpooling for kids whose parents have conflicting work schedules. 
  • Home repairs or upgrades for someone who may need a handyman or doesn’t have time.

If you still want to give a tangible gift, consider a homemade card, holiday cookies or a family photo in a frame. 

Both Saavedra and Tu agree that giving gifts shouldn’t place a strain on your finances. “At the end of the day. It’s really about the thought, said Tu. “It’s about making sure that you’re getting a meaningful gift and it doesn’t need to be the most expensive thing on the shelf.”

Dashia is a staff writer for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.