With the holidays fast approaching, you need to decide just how much money to spend on presents. And while you don’t want to seem like a Scrooge, you also need to be realistic about your budget. How much should you spend on everyone on your shopping list? Are there some people you can cut?
We offer some guidelines and tips that might help you spend more wisely this holiday season.
GUIDELINE #1 How much to spend on someone’s present should be directly correlated to how much time you spend with them.
Do you see them at least once a week or text with them on a daily basis? If so, then they are in the running for a pricier present. Also, if they regularly laugh at your jokes and buy you drinks at the bar, feel free to spend a bit more. Economy suggests this simple and totally unscientific equation: $5 x number of times you see someone per month = price of gift. Also to consider, how hard, do they laugh at your jokes? Be precise here or you won’t spend the
GUIDELINE #2 How much to spend on someone’s present should be directly related to what gifts they’ve given you in the past.
A fundamental building block of economic theory: the tit-for-tat principle. If they have given you gifts that you actually like and use then make sure you spend a little more on them. Even if it was a bit boring like gloves or a scarf at least it’s useful. Remember, they could have given you a candle, i.e. the gift that says, “I couldn’t care less.” If they gave you a candle? Retaliate, it's what economics wants you to do.
GUIDELINE #3 How much do you actually like them?
Yes, it’s a bit harsh, but when you’re on a budget you have to make some tough calls. This often comes into play if you have multiple siblings. Just think back to how nice they were to when you were younger. Did they ever write a paper for you when you were at school or buy you liquor when you were under age? If so, Santa should be extra nice to them. However, if they ever tattled on you to your parents or accused you of cheating while playing Monopoly (even if you did) coal in their stocking is not out of the question.
GUIDELINE #4 Make more effort if you’ll actually see their face when they open it.
The actual giving of the gift is an often overlooked but vital factor to consider in the choosing of the gift. Will you be giving the gift in person or will you be sending it in the post? If you will actually be in their presence when they open the present you’ll get instant gratification when you see their reaction. So spend enough so that you won’t have to apologize or mumble excuses as they open it. If you are sending it in the mail however, you’re off the hook. Just tell yourself they were thrilled when they opened that tin of McVitie’s biscuits; who wouldn’t be?
GUIDELINE #5 Consider what you may need from them in the year to come.
You know what they say – every man for himself, even in the holiday season. Do they have an IN at an especially hot restaurant? Might they have a friend you’d like to date, or a home in France you’d like to ‘borrow’ for a weekend or three? If the answer to any of these questions is ‘Yes’ then you’re going to have to spend more money than you really want to spend. But at this point it’s not spending, it’s an investment! It’ll be much harder for them to say no to any favor you ask of them down the line if you’ve got the memory of that Gucci wallet you placed under their tree on your side.
Disclaimer: The above does not constitute financial advice. Economy is not liable by law for any budgetary or emotional repercussions of the guidelines outlined above. The equation really works though. Try it. Go on...