How to make the most of your holiday gift budget

If money is tight right now, you may feel especially stretched by the thought of holiday shopping.

Many consumers, particularly those with lower incomes, are looking to spend less than they have in the past, a recent Gallup survey found. While some retailers have projected record holiday sales, other outlooks are less rosy. 

According to The Conference Board, a nonprofit business think tank and membership organization, the average American is expected to spend about 7% less on holiday purchases compared to last year.  

While conversations around money can feel awkward, it is important to set expectations with your loved ones about what you can reasonably do this holiday season. PBS News spoke with etiquette experts about how to navigate different gift-giving situations this year. 

Deciding whom to include on your gift list 

If your budget is tighter than usual, deciding how to limit the names on your shopping list can be a challenge. 

Elaine Swann, author of “Elaine Swann’s Book of Modern Etiquette,” has an easy method to prioritize exactly whom you need to shop for. 

“Use what I call ‘the onion method,’” Swann said. “The folks who are at the center of that onion are closest to you — that’s where you start with your list.”

If you find yourself in a position where your list is longer than you can afford, Lizzie Post, co-president of the Emily Post Institute, said you can always narrow it down by crossing off people you’re not seeing at holiday gatherings.

“You want to think about anything you might have decided to participate in, or any friends or maybe even a coworker who you really feel inspired to give something to. But just remember that you can always reel it back to those you’re gonna be spending the actual holidays with,” Post said

Simply put: You can limit gifts to just “the people you actually are with on Christmas morning.”

Setting expectations with family or friends

Both experts agree that if you’re scaling back your gift-giving this year, the polite thing to do is to give your loved ones a heads up, even if you feel awkward or embarrassed. 

“Be very upfront and let folks know,” Swann said. She suggests telling them, “Listen, this year I’m not going to be able to go all out the way I did last year, or in years past. We are skimming back just a little bit, but I do want you to know that I love you, and whatever I provide for you this year comes from my heart and not necessarily from my wallet.”

Communicating how your finances are working in terms of gift-giving this year is “nothing to be embarrassed about,” Post said. “The entire nation is dealing with this.”

Responding to a loved one who says they’re scaling back

Maybe instead you’re on the receiving end of a call from a loved one telling you they are scaling back or aren’t able to participate at all in gift-giving this year. It is best to respond to them with grace, Post said.

“People often feel embarrassed or insecure about not being able to participate in ways they usually have been able to. And it’s really important that you not encourage that embarrassment, that you not shame anybody for this,” she said. 

Swann said it’s important to “just accept what they share in an understanding way and be respectful of the position that they’re in right now.”

In this conversation, it’s also essential to reassure them that “their presence, their joy and brightness throughout the holiday season are what will really matter to you,” Post said, and “do the best you can to encourage them to still participate” in holiday gatherings.

Get creative with your gifts and how you can participate in holiday gatherings

If you aren’t able to shop for everyone on your list, get creative thinking of things you could do “that really would be in service of someone else,” Post said. 

Consider acts of kindness that aren’t expected of you, and that might not cost anything to go above and beyond. For example, if your loved one has kids, offer to babysit for an afternoon so they can spend that time doing something they wouldn’t be able to do otherwise.

Swann suggests that if you aren’t able to monetarily contribute to gift-giving, think about ways you can still participate in the activity of gifting. “You could be responsible for ordering the gift, or making sure it’s wrapped, or presenting it,” she said.

In group giving situations where you are on the hook to buy an individual gift for each person, “consumables are an awesome way to go,” Post suggests. 

That could be a cookie platter, cheese and cracker board, homemade candies, or a variety of hot chocolate flavors that you can individually give to each person. Bonus: This is also a great gift if you’re “a new partner and this is the first holiday that you’ll be celebrating with someone’s family,” Post said. Since you don’t know everyone enough to get them a personalized gift, she said this is a great solution in this scenario. 

Setting expectations with your children

Post acknowledged that talking with your children about how much they will find under the tree this year can be a hard scenario to navigate since “so much of our culture focuses on the idea of gift-giving at the holidays.” She suggests getting your children involved in coming up with low-cost or no-cost experiences family can do together instead.

“Someone’s gonna chime up with, ‘We can go for a walk together,’” Post said. “Or maybe it’s that each kid gets to pick a particular game that the whole family joins in on.”

Swann suggests this is also a great opportunity for your children to get involved with their community.

They can donate toys or other things they have, and “volunteer along with you so that they can see that there are individuals who are less fortunate. So this way when you give them your scaled-back version of holiday gifts, they will have a better understanding and more compassion,” Swann said.

What should Santa bring?

If you’re coordinating with Santa this holiday season over what gifts parents should buy and what he can bring, it’s completely up to parents to decide how to divide them up. 

“It’s really dependent on how you feel about the gifts that you’re giving and the sense of magic that you want to create from them. And I don’t want to say that gifts from mom and dad aren’t magical, but there is a certain magic to those Santa surprises,” Post said.

Coordinating with a co-parent

Co-parents may have different financial situations. It’s vital for both parents to get on the same page when it comes to gift-giving for your child. This also helps to avoid duplicate gifts.

“Talk with your partner, figure out exactly what you want to give or what price range you want,” Swann said.

Swann said that if the gift you choose has special meaning to your child, “it doesn’t necessarily have to cost as much,” since “it doesn’t take too much to please our young ones these days, especially when we’re looking at things that they really like and enjoy.”

Another way to save some money and give a meaningful gift is to have both parents go in on a gift. 

“It’s really great when co-parents can get together on a few gifts so that even though we might be apart, we still get to give something from both parents,” Post said.

What should I get for my child’s teacher or daycare provider?

When thinking of more affordable gifts to give your child’s teacher or daycare provider, experts told PBS News to avoid coffee mugs and body products, like sprays, lotions or washes.

Swann said to start by having a conversation with the teacher and “figure out what moves them, what’s interesting to them. You might find that they have some sort of hobby or interest” and find options that work within your budget. 

School teachers are known to buy a lot of classroom items out of their own pockets, so Post suggests seeing if there are any supplies they need. Also: “Teachers really do appreciate cards with thoughtful messages from their students.” 

This is not to dissuade people from purchasing a gift for the teacher, Post said, but a reminder that “you are one of 20-plus people thinking about this person” and “your words might go very far.”

Both experts also said it’s a great idea to get in contact with other parents and see if there is a group gift you all can go in together. “That way they’re receiving one gift from the whole class as opposed to 21 mugs,” Post said.

Should I buy a gift for my neighbors?

Post said “it’s important to recognize that while our generosity can be very big of heart, our wallets are often very small right now,” and you don’t have to feel obligated to get your neighbors a gift. 

“These are folks that I would really consider just doing holiday cards for,” Post said. “It’s nice to offer something, but a card can certainly do a lot of work to spread cheer.”

If you have the extra wiggle room in your budget, Swann said ornaments — including those that are handmade — make a great gift since they can be added to their holiday collection. 

What should I bring for the host of a holiday party I’m going to?

If you’re attending a holiday party, the host should be one of the people you consider putting on your gift list. Consumables like wine and cookies are popular go-tos, but Swann said “there’s a lot of really great gifts that are inexpensive that you can give to your host that would just make their day.” 

Focus on things that suit their interests. That could be “a really great wine bottle opener or set of wine glasses” if the host is a wine lover, “and you can even decorate those so that they’re memorable,” Swann said. Or  if they “love to do spa-type things at home,” consider gifting a “cute spa kit.”

If you’re bringing a dish to the party or attending a potluck, bring the food in a dish that you can leave for the host. “It’s a great gift that the host can keep on using,” Swann said. 

If you don’t have that extra room in your budget, Post said it’s important to remember that “there is no ‘must’ when it comes to something like a hosting gift, especially at the holidays.” While it is nice to offer something if you have the means to do so, “don’t think of yourself as any less of a guest, or less of a person, if this isn’t a year that you can show up with extra gifts for your hosts.”

If you are hosting this year and not as worried about your budget, “do feel confident letting your guests know they can come as they are and that you are providing everything,” Post said. On the flipside, if you’re operating on a tighter budget this year, she said “it’s perfectly appropriate to throw a potluck. Simply talk with your guests about it when they RSVP and make it clear that they’re RSVPing to a potluck event.”

What if I receive a gift from someone and didn’t return the favor?

“I wish I could wave a magic etiquette wand over the whole country and say, ‘Don’t feel awkward about this!’” Post said.

You don’t want your awkwardness to take away from the moment, Post said.  

“It’s really important to instead focus on the gift the person gave to you and how grateful you are for it, how surprised you are for it, or by it,” Post said. She wants people to remember that “gift-giving is not inherently a reciprocal event.” The person who gave you that gift likely “had no intention of making you feel bad.” 

So before you start apologizing for your lack of gift or consider telling a white lie about how you left their gift at home or it’s still shipping, Post said to instead “use it as inspiration to get them something later in the season.”

A great, economical gift for anyone

A  framed photo. This can be a photo of you and the person you’re gifting it to, or your favorite photo of them pulled from their social media. 

“We take so many pictures of ourselves and we post them online or they live in the cloud, but why not pull that photo, print it out, and put it in a nice frame?” Swann said.  “It’s a great way to give someone an inexpensive gift that’s meaningful and memorable.”

Post said this is one of her favorite gifts to receive since “my house is now filled with the faces that I love.”