There’s like a solid 3 things that are associated with Christmas- Santa, delicious food, and spending tons of money.
Whether it’s for ourselves or for others, spending more money on Christmas even giving more of it away, has long been a tradition surrounding the holiday. Because we have been brainwashed to give, give, give to our loved ones and those less fortunate, Christmas comes with a hefty price tag.
The phrase, “It’s beginning to cost a lot like Christmas,” has been stuck in my head, replacing the original jolly lyrics, in the same tune as the song for three weeks now. And every time I have tried to go knock off someone from my list, the song reminds me that I’d like to be able to pay rent in January, and that person is just going to have to receive a cheaper gift or no gift at all.
I can hear my mother gasping now, “Why wouldn’t you buy your sister the Naked eye shadow pallet she wanted for Christmas?” “Ummm because it’s $54, she lives in Arkansas and that shipping and handling fee ain’t cheap.” She would probably then proceed to call me a Grinch, and that’s best case scenario.
I imagine there are a lot of people out there that feel the same way. How evil of us, to not be able to blow cash like it’s nothing, during this one specific time of year… Yes, we must truly be after the spirit of St. Nick himself. Hang Rudolph! We are here to annihilate Christmas with our empty wallets and minimum wage jobs. That was sarcasm.
But you still feel a little guilty, especially if you’re not exactly a gift giver throughout any other occasion in the year. Don’t worry, economists around the country are totally backing us up. So when my mom gives me that call, about my sister’s gift, I am going to drop this knowledge on her…
Firstly, gift giving has gone a little too far, not in the sense of the cost of a gift but how every year the list of people to shop for grows! It started with immediate family members, then friends, then family friends, then teachers, and now even coworkers with their Secret Santa b.s. all want a gift. I truly resent that, if we work together, you probably have an idea of my salary, stay away from me Janice.
Economists agree, to some degree, on the idea that Christmas is an “inefficient” holiday. The National Retail Foundation reports Americans will spend about $967 on average this holiday season, which estimates the country will spend more than $678.8 billion in total. NRF President and CEO Matthew Shay explained:
“With employment and incomes increasing, consumers are more confident this year and that is reflected in their buying plans for the holidays.”
In addition to saving money, there are other benefits to not buying gifts, including saving resources and avoiding holiday shopping stress. It was back in 1993, when economist Joel Waldfogel wrote the article defending Grinches everywhere- “The Deadweight Loss of Christmas.” It was published in the prestigious journal American Economic Review. In it, Waldfogel asked Yale students about the gifts they received during the holidays, “How much do you think someone paid for that gift?” “And, sentimental value aside, how much would you pay for them yourself?”
And whoa, that’s a mighty good point… I know I am not the only one wasting countless hours on Pinterest reading holiday gift guides, because honestly I ran out of ideas a few years back, and still someone is bound to be unhappy that you bought them anxiety stone. Now a professor at the University of Minnesota, Joel Waldfogel said gift giving just isn’t an effective way to part with your money:
“We’re making guesses about what other people need or want or like. If I go out and spend $50 on you, I may buy something that’s worth nothing to you.”
The average recipients valued the gifts less than someone paid for them. The most conservative estimate suggests that the receiver valued the gift at 90 percent of the buying price. According to Waldfogel’s estimates, the difference – AKA the deadweight loss — accounted for between $4 billion and $13 billion a year in economic waste.
From an economic point of view, we can infer that buying gifts is often a waste, especially if you don’t know someone well. Rationally speaking, one of the best solutions is to give cash, especially if you don’t know someone well. The recipient knows their own tastes better than you do. The National Retail Foundation reports gift cards have been the most popular item on people’s wish lists for the last 11 years.
Spending money on experiences, like a family vacation or a meal together, can create more memories for the entire group. Studies show that spending money on experiences tends to provide more long-lasting happiness than buying material goods. And if numbers/research aren’t enough to convince you, what about if it helps the environment?!
Unwanted gifts are not only a waste of money, but may lead to more environmental waste as they end up in a landfill, along with wrapping paper and packaging materials. The Environmental Protection Agency reports Americans produce 25 percent more household waste, or about 1 million extra tons during the holiday season. So, if you don’t do it for your wallet, do it for the planet!