Strategies for smarter gift-giving

The holiday season is all about family and togetherness, but it can also be a major source of stress. Gift-giving is a big contributor to this festive season anxiety.¹ In one poll, 72% of US adults said they feel some level of stress over holiday shopping and 57% say they would feel relieved if a friend suggested not exchanging gifts.²

It's not just spending the time and braving the crowds that makes holiday shoppers stress out. There’s also the matter of paying for all those gifts. Consider this: The average credit card interest rate is 20%.³ If you buy $1,500 in gifts on credit this holiday and then pay only the minimum of $40 each month, it could take you 13 years to pay off the balance, including $1,890.06 in interest.⁴ A 2024 survey found that of the 69% of Americans who gave holiday gifts, nearly half (47%) admitted to going into debt due to holiday spending in the past — and 43% of that group believe debt has become synonymous with the holidays.⁵

But it doesn’t have to be that way. Here are some tips for savvy, stress-free gift-giving.

Set a plan and start early

Our research shows that 61% of people who report having high financial wellness say they are good at setting up a long-term plan for their financial future.⁶ By mapping out their spending and sticking to a budget, they’re less likely to fall into the holiday overspending trap. So, if you take a little time to plan your gift-giving and make sure it fits your budget, you may be able to dodge buyer’s remorse and keep your finances on track.

Choose experiences over expenses

Want to wow a loved one and think the only way to do it is to spend a fortune on a lavish gift? Think again. Research has shown that experiential gifts have a bigger impact than material ones.⁷ Arranging to go to a concert, show, or museum exhibit together or sharing a meal at a favorite restaurant encourages feelings of connectedness and tends to bring people more happiness than pricey goods. This holiday season, aim to make a memory not blow your budget.

Save in advance and pay later 

It can be tempting to just put all your holiday gifting on a credit card just to get the shopping over with. But by doing a little advanced planning, you may be able to check everyone off your list without going into debt. Look for stores that allow you to put a down payment on an item and pay it off — without interest — over time. You may also be able to take advantage of a Christmas Club account. Invented during the Great Depression, these temporary savings accounts let you deposit money all year and then withdraw it at holiday time with no fees. Many credit unions still offer them. You can also create your own specialized savings account for gift-giving by setting up a savings account at your bank or credit union and making automatic deposits throughout the year.

Resources for your well-being

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DIY instead of IOU

Why not get creative and make your own gifts? Not only does it show you’ve really put your heart into it, but it’s also a fun way to add a personal touch. Use your woodworking, needlework, painting, photography, or cooking skills to create a personalized and thoughtful gift. Or, create a curated playlist made especially for your loved one. Imagine the smile on someone’s face when they unwrap something made just for them. The real value comes from the time and thought you invest, not the price tag.

Go digital

Let tech do the heavy lifting for you. Online apps can turn your smartphone into a combination shopping list and budget tracker. Other apps can help you find the lowest price on gift items, locally or online.

Think out of the box — and into the bank account

Thinking about giving a financial gift this year? Not only can it make a lasting difference, but it's also way more meaningful than the latest gadget or trendy item. If you’re looking for a financial gift for a young person, consider stock in a favorite company.⁸ You can help them start their investment journey — and spark some great conversations about what brands they think will grow. Or, if you want to support their future, consider adding money to a 529 plan. It’s a smart, tax-efficient way to help with education costs.⁹

Savings bonds are another thoughtful choice. They take a bit of patience to pay off, but that’s the perfect lesson in how saving today can mean a bigger reward tomorrow. The US Treasury website makes it easy to give a bond as a gift.¹⁰

Looking for something easy and efficient? Custodial gifts let you transfer money or property to a minor and have an adult custodian manage it until the child’s old enough to take over. It’s a practical way to give a gift that grows along with them.

We all know the saying, “It’s better to give than to receive.” But honestly, giving shouldn’t leave you stressed or strapped for cash. With these ideas, you can make your gift memorable — while keeping on track with your financial goals. Now that’s a win-win.

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