Present price panic? – Do your maths first.
We are a nation of present buyers. We love the process of spending hours planning and searching for the perfect gift followed by that unbeatable heartwarming feeling when watching a loved one unwrap it. There are health benefits to our generosity too: some studies even show that giving in this way can reduce stress and depression. Unfortunately, the price tag that comes along with it can have completely the opposite effect. We are a country of givers but also spenders, one report showed that at Christmas time the UK is number one in Europe for our gift expenditure, spending on average over £100 more than the next highest nation.
Like any other cost, the best way to reduce anxiety is simply to plan. Far too often budgeting for buying for others is only ever considered at Christmas when in reality we give gifts throughout the year. So how can we budget better for our generosity all 365 days?
Firstly, plan for the entire year. Most budgeting is done on a monthly basis; however, it is unlikely that the birthdays of all your family and friends will be perfectly distributed throughout the year and clearly December will always be more costly. Consider the bigger picture.
In 2022, who will I have to buy a birthday present for? Who will I need to send a card to (not a big cost on each occasion but it adds up)? Are there significant anniversaries that I will want to celebrate, or occasions like weddings or baby showers? How many birthday parties will my children go to... Obviously, there may be unforeseen occasions, but it is still useful to list all your predicted spending as more often than not the list will be longer than you imagined.
Next set a max spend for each gift. It seems harsh to value your friends and family like this but you are not going to spend more than £10 on great uncle Tim’s birthday socks this year. Again, these do not need to be 100% accurate, it’s just to create a picture for yourself. From here it’s some simple maths to add up all these values and find your annual budget.
This figure can be quite overwhelming, one study suggested that on average an adult in the UK will spend £630 a year on gifts – excluding Christmas. That’s 28 gifts averaging at £22.50 a time. Budgeting wise, it can seem more manageable to break this down into a cost per week or month. For example that’s just over £12 a week – probably less than you spend on coffee, and so to avoid a shock to the system at busier times of the year, put this money aside each month whether you spend it or not.
Fortunately the natural consequence of being a gift giving nation is that we are also a gift receiving one. So after all the planning, maths in your budgeting and being careful with your money, you’re also likely to receive some nice treats yourself!