November 23, 2023
With Thanksgiving upon us, we are now in the heart of the holiday season, and I hope you will hold one of my most important lessons close:
For a gift to be truly generous it must be as generous for the giver as it is for the recipient.
And I worry that many of you are not generous to yourself. When you spend more than you can afford, that’s not being kind to yourself. When you run up a bigger credit card balance because you think you must buy gifts you can’t afford, that’s downright cruel to yourself given that you likely will be paying 22% annual interest on any unpaid card balance. When you dip into your emergency savings fund to cover the cost of gifts, that’s the opposite of generous – you just decreased your financial security to buy a gift.
I am worried because I just read a report that people expect to increase their holiday spending by 14% this year, compared to 2022. The average per-person spending is expected to be more than $1,600.
I am not being a Grinch. I am being realistic. This report that people expect to spend more comes at a time when credit card debt has reached a record high of $1 trillion. And this bears repeating: the average interest rate on card debt right now is 22%.
If you feel compelled to buy gifts, I want you to put in extra time to find meaningful gifts that are within your budget. No budget you say? C’mon. At a minimum, you must, must, must give yourself a hard budget for your holiday spending and stick to it.
And as for what the budget should be, your main guideline must be that whatever you spend you can pay for in cash or pay off immediately when the credit card bill arrives in January.
But I will never tire of telling you about the extreme joy KT and I have in making gifts for each other. And I can tell you receiving something homemade from KT is just the best. Talk about being generous to the giver and receiver!
For those of you with young families, why not make it a family tradition that everyone makes gifts? That not only will satisfy the generosity test, but it will also make for incredible memories.