Holiday Gifting While Saving for a Home – yes or no?

11/20/2019

The holidays are stressful for most. You’re running from store to store, cooking, cleaning, traveling, trying not to bring up politics in front of that one uncle… But what weighs us down the most is the pressure to buy gifts. This can be particularly stressful when trying to save for a large purchase, namely, a home.

You don’t have to halt your home savings fund to buy popcorn tins and scented bath gift sets for everyone under the sun.  Instead, focus on what you can do to keep your savings on track so you can spend next holiday season in your new home.

Take a serious look at your budget.

We’re assuming you already have a comprehensive monthly budget that you follow line by line… right?  With your total expenses and savings goals in mind, figure out how much you can comfortably spend on holiday gifting.  

But there’s no wiggle room in the budget!

If there’s absolutely no extra cash for gifts, no biggie!  Have an open and honest discussion with friends and family about why you’re not buying gifts this year. Don’t feel pressured to buy for the sake of buying. The people who you would buy for are the ones who will understand the importance of your savings goals anyway.

Definitely don’t buy on credit.

When you’re in the home buying process, adding more debt is a big no-no.  Americans, on average, rack up an additional $1,000+ in consumer debt during this time.  This will not only affect your Debt-to-Income ratio (DTI) but can affect whether you get approved for a mortgage or not.  If you can’t buy gifts with cash, don’t buy them at all.

Draw a name.

If you can’t get the idea of gifting out of your head, suggest that your family and friend groups draw a single name out of a hat and buy one gift for that person.  Set a spending limit of $25 (or whatever everyone is comfortable with) so that you’re still giving, but within your means.

Gifts don’t have to be material things.

How about gifts of time (i.e. babysitting, pet sitting, house cleaning)?  Handmade gifts? Experience gifts (i.e. hike with a picnic)? These things are often more appreciated and won’t get tossed in the garbage when the allure is gone.

Bottom line:  Keep your eye on the prize.  Yes, the holiday season happens only once a year, but it’s worth limiting your participation in the short term when you envision years of holiday enjoyment in your new home in the long term.  And don’t worry. Even if you opt out of gift giving this year, you’ll still be on Santa’s Nice List next year.

Other News