Holiday Budget Strategies

From one gift to the five senses to giving back, Americans can give without taking on debt

SAN MATEO, Calif., Dec. 19, 2007 - In this holiday season, when the average American adult will spend more than $800 on Christmas gifts, according to the National Retail Federation, Brad Stroh, co-CEO of (, reminds individuals that there are smart strategies to keep budget in mind when planning holiday celebrations.

Depending which statistic you read, each child will receive gifts valued from $300 to $600. An annual index calculates the cost of all the items purchased by the "true love" in the song, "The 12 Days of Christmas," at more than $19,500.

"In this consumer-oriented environment, households with children might receive a holiday toy catalog nearly every day in November and December," Stroh said. "Some families have developed their own systems to handle gift overload. Consider these options and see if one works for your family."

Stroh's suggested holiday options include:

  1. One large gift: While the typical American child could fill up pages of wanted items, kids often yearn for one particular gift. If parents can afford it, it may not be so bad to spring for the Wii, Stroh said. "Cap the budget by supplementing with a few inexpensive stocking stuffers (or nothing) rather than a dozen other less-desirable toys that are likely to be ignored."
  2. Two sides to giving: "Our culture focuses on receiving at this time of year, but the other side of the coin is giving," Stroh said. "Families that focus on helping others -- whether shoveling snow for an elderly neighbor or pitching in to buy gifts for a needy family in the community -- cultivate a sense of gratitude for the good things they have, rather than what they did not receive."
  3. Just three gifts: Some families give only three gifts per child. Often, families give one toy, one book and one article of clothing. The system is fair and focuses on values such as usefulness and education.
  4. The four-gift poem: Some families swear by this rhyming guideline when making their wish lists: "Something you want / something you need / something to wear / something to read." The rhyme can help focus requests and minimize children's natural tendencies to crave gifts.
  5. Five creative gifts: Another limiting option is to give five gifts, one for each sense. A "touch" gift could be a pillow or a bicycle. A "smell" gift could be perfume or a plant to move outdoors in spring.
  6. Make it yourself: All members of the family can make something for others, whether it's a coupon to walk the dog, a hand-knit scarf or a batch of coveted fudge.
  7. Focus on tradition: Some families give each child an ornament as a Christmas gift. "When the children become adults, they will have a collection of decorations with which to start their own home," Stroh said, cautioning, "Just avoid the trap of funding a number of traditions like this -- and also buying a pile of presents."
  8. Remembering that others will give: In addition to gifts from Mom and Dad and Santa, most children receive gifts from aunts, uncles and grandparents. "Altogether, the pile of gifts can add up fast," Stroh said. "Don't despair, therefore, if the pickings under your tree look sparse at first."
  9. Avoidance of debt: "If you cannot pay off your holiday gifts by the end of January, you're spending too much," Stroh cautioned. "Make choices that allow you to pay for holiday gifts with cash."

"The best gift you can give your family is financial well-being," Stroh added. "A roof over their heads, food in their bellies, a warm coat and clean clothes to wear -- all these matter far more than an avalanche of toys under the tree. Put your family's long-term goals first, and then make holiday plans. You will enjoy a truly happy holiday, now and when the bills come in." Based in San Mateo, Calif., is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. The company blogs about consumer finance issues at Since 2002, has served more than 30,000 customers nationwide while managing more than $500 million in consumer debt. is a division of Freedom Financial Network, LLC, whose co-founders and CEOs, Andrew Housser and Brad Stroh, have been named Northern California finalists in Ernst & Young's Entrepreneur of the Year Awards.