How Much to Spend on Christmas Gifts for Family

Souvenir giving is a big deal this time of yr.

To find the "perfect" gift, Americans will spend about xv hours shopping. Women will do about twice as much every bit men. And they'll shell out well-nigh US$1 trillion on gifts.

While retailers enjoy the holiday shopping season as a fourth dimension when consumers open their purses or wallets, for many consumers – particularly those who do not like shopping – these days are filled with dread. They marker moments when shoppers clog malls, websites become overloaded and delivery trucks block streets. The unabridged process generates untold amounts of stress and anxiety.

Ane source of stress is just how much to spend on gifts. Spending too much can put y'all in financial distress. Spending too little may make yous expect inexpensive.

How do you decide what's the "right" amount to spend on gifts?

Equally an economist, I study holidays and souvenir giving because a large fraction of retail shopping is driven by seasonal events like Black Fri, Cyber Monday and Super Saturday – also and more appropriately known as Panic Saturday – which is the last Saturday earlier Christmas.

'Expressionless weight loss'

Gift giving is stressful because nobody wants to buy what they remember is a perfect souvenir only to observe information technology is a dud.

The long lines of people returning items after the holidays seem evidence enough for that.

Shoppers clutch their Nordstrom bags as pre-Thanksgiving and Christmas vacation shopping accelerates at the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. Nov 22, 2019. Photo by Mark Makela/Reuters

This has led some economists to fence at that place's a "dead weight loss" to Christmas presents that "destroys" every bit much as a 3rd of their bodily value. A 2018 study estimated Americans spend $thirteen billion a year on unwanted gifts.

Other economists, however, accept resisted this Scrooge-similar view of souvenir giving and bespeak to evidence that a nowadays can actually have more value to the recipient than the price the giver paid. In other words, a gift, even when technically unwanted, could have more value simply because someone else bought it for you.

Setting a budget

So if yous're dead set on buying some gifts, how much should you budget for it?

Since gifting is a social act, information technology makes sense to consider how much other people typically spend.

There are a number of surveys run each year that ask people during the autumn to approximate what they plan on spending for holiday gifts. The National Retail Federation's annual survey of vacation spending estimates the typical American will spend $659 on gifts for family, friends and co-workers in 2019. On the loftier end, Gallup puts the average at $942, with more than a third of respondents expecting to spend over $1,000 on gifts.

But these figures aren't that helpful for an individual since $659 means something different to someone making $40,000 a year versus $200,000.

That'due south where the Consumer Expenditure Survey comes in. Information technology'due south a big survey run by the Bureau of Labor Statistics that tracks the spending habits of 12,000 to 15,000 families each year. The government uses the survey to determine the cost of living and inflation rates for the typical family.

Stack of five wrapped christmas gifts on wooden floor

The survey follows gift giving very precisely. It has categories for mutual holiday presents like electronics, books and clothes, likewise equally gifts that typically aren't associated with the season such equally housing and transportation.

Later on removing these not-holiday gifts, the typical U.S. family unit spends well-nigh i% of its almanac take-home pay on gifts. And so whatsoever y'all earn, y'all could multiply it by 1% to become a effigy that is in the ballpark of what the average American spends – but won't break the bank.

Making the holidays memorable

While calculating a gift budget is one way to take the stress out of how much to spend on gifts, my family has another: Only give gifts to children.

Adults get wrapped boxes filled with paper. After the real gifts are opened and the young children are safely moved out of the way, we crumple up the newspaper and throw it at each other in our annual newspaper fight.

That keeps the cost down while making the kids feel special. It also ensures the kids don't feel left out when their friends talk near the gifts they received. Other families follow their own methods for decision-making expenses, such equally secret Santa gifts or by focusing attending more on togetherness than on the stuff received.

Whether you have a paper fight or follow another family unit tradition, my main message is that it doesn't take very much money to make the winter holidays memorable.

This article is republished from The Conversation nether a Artistic Commons license. Read the original article.

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Source: https://www.pbs.org/newshour/economy/making-sense/how-much-you-should-spend-on-holiday-gifts-according-to-an-economist

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