Posted December 29, 2011 by admin in Finance

Gift inflation: are you trying to outdo yourself every year?

Gift Box

How was your Christmas? I hope you had a good one. I know I said I would not be writing until the New Year but I could not keep away.

I am still struggling with the physical effects of the season (too much food and drink, too little sleep and not enough exercise). And, I am also left to consider the financial impact of Christmas.

Every year I try to spend wisely. I think carefully about what I am going to buy the people on my list so that I am not tempted by the commercial veil of useless junk once I am at the store. I focus on meaning rather than price tags, but the overall cost creeps up on the best of intentions. And then there is, what I call, gift inflation.

Have you ever noticed such inflation? It is the act of trying to outdo yourself every year. The idea that you have to surpass last year’s gift. How are you going to top the diamond earrings you got your wife the first Christmas you spent together? The same goes with children. If you get your five-year-old a Wii, how do you explain the collection of Dr. Seuss books you get them the next year? That’s the problem with going big early on. It becomes hard to avoid letting people down in the future.

English: Danboard holding a Christmas gift.

Father Miser has always been an especially considerate gift-giver. He keeps tabs all year and then surprises those he loves with the most thoughtful gifts. He has built up such a reputation over the years that my friends and family are sure to ask me what I received for birthdays and Christmases in anticipation of a good story. And then there was the birthday he gave me a label-maker. As childish as this makes me sound, I could not help but feel disappointed after years of creative gifts and special treatments. Not so much about the lower cost of the item but because I felt he had not put as much thought into the occasion. Of course he felt bad, I got over it and we laugh about it nowadays.

Another side to gift inflation are the family members who compete with one another each year, vying for the spotlight as the favourite aunt, uncle or grandparent with the best gifts. These people tend to buy beyond their budget and often regret their holiday spending come January when all of the credit card payments are due.

So, how can you avoid gift inflation?

  1. Set a spending limit between friends and family members;
  2. Participate in a gift exchange instead of buying each person an individual gift;
  3. Focus on gifting something meaningful rather than something expensive;
  4. Adjust your expectations as the receiver and understand that some gifts will be great and some will be a little more ‘average’, shall we say (note to self).

Pay attention to people’s preferences, needs and interests throughout the year. Each time you think of a good gift idea, jot it down. This way you avoid the rush and stress of the next Christmas season simply by being prepared.  Not only will it make you a better gift-giver but all the paying attention will allow you to get to know the people in your life that much better.