As we all know, this is the season of getting (oh wait, giving). This also means it’s the season for holiday spending. From Halloween to the New Year, there is a consumption frenzy in America. In 2017, Americans are expected to spend over $1 Trillion with retailers during the holidays.
In our past life, Amy and I did our share of thoughtless purchasing during the season. Some of our many examples include:
- It was our first Christmas as a couple. We wanted it to be special and we went more-than-a-little crazy. I ordered a digital picture frame for Amy but learned the delivery would be delayed. It wouldn’t arrive in time for her to open it on Christmas. Off to the mall I went to buy a second one. She ended up with 2 of them. Neither one was ever used.
- I love coffee in the mornings but it’s all about the jolt of caffeine for me. Supermarket coffee on sale will work. One year, I put a siphon coffee maker on my wish list. It looked like a science experiment and I was in awe. It was awkward and fragile and I used it only once.
- Another year, the gifts for the kids were several feet high around the tree. Years later, we found some of those gifts in their closets, still wrapped in the original cellophane.
It took a few years, but we learned there was another way.
Embracing frugality means that we do not buy much in the way of gifts throughout the year (including Christmas gifts). This marks the third holiday season where we’ve placed very few gifts under the tree.
Actually, for the last three years we’ve been tree-less. Our smaller space doesn’t have room for a tree. We use every inch of our home year-round. Room for a tree would mean unnecessary space 11 out of 12 months of the year.
The things we do buy tend to be experiences (summer camp, vacations, etc.) versus things. We’re far from Scrooge-y as we appreciate and enjoy the traditions that come with the season. We have a collection of festive annual activities that make this time of year special.
Our Holiday Season is Amazing and We’re “Doing Without”
As with all things in our new life that involve less spending, we’re happier to be “doing without.” What we’ve found is that we have extra time to spend with friends, celebrating at parties, volunteering and enjoying seasonal activities. There’s no pressure to hustle to the mall or to sit by the computer on Cyber Monday. Spending less money during the holidays is not only good for your wallet, it can also be a great time saver.
Retailers do an amazing job making you think you need to buy what they’re selling. In addition to the normal subliminal pressure that retailers exert, the holiday season takes things to a whole other level. They have compelling merchandising and displays that subtly (and sometimes not so subtly) try to convince you to spend more than you were intending. Being able to avoid the shopping experience altogether means you’re not coerced into buying more to “save” more.
$400 = $10,000
Recently, we had lunch with a friend. He was getting ready for the holidays and had paid someone $400 to install Christmas lights on the second story of his house. He explained why this was money well spent. A trip to the emergency room from a second-story fall would certainly exceed what he paid for the installation and removal of his lights. This is a VERY valid point.
Amy and I did some quick math and determined that he would need to save an extra $10,000 ($400 x 25 – with no consideration for inflation) in his retirement account in order to support this annual holiday habit. We thought about the extra weeks (or months) he would need to work in order to fund this tradition. Assuming he was saving $1,000 a month for retirement, he would need to work an extra 10 months over his career in order to support this one ongoing indulgence.
Enjoying holiday lights is one of our favorite seasonal activities. So, we’re happy that folks create these displays. Our friend considers this spending a form of medical insurance and therefore a smart investment. Spending $400 a year on a Christmas tradition could seem like a bargain using our old mindset. The amount would not have put a dent in our overall spending. We could have easily afforded to do something like this annually. Using our new financial-independence lens, we are forced to look at every penny we spend in a new light.
How much time would I need to work to keep this expense in my life?
Nowadays, every time we hear someone talking about spending we break out our calculator. How much longer would they need to work to keep this expense in their life? If the activity (or thing or whatever) provides enough value to outweigh the extra days/months/years they would have to work, they should consider possibly spending the money. If they love their work and holiday lights bring them enough joy to offset their delayed freedom, then this may be a worthwhile splurge.
We all have the same 24 hours in a day. Our choice is to spend our days with more freedom and less spending. This season we’re enjoying freedom from our jobs and freedom from shopping for gifts.
However, a little holiday shopping was in the cards for us. We just booked a warm-weather Spring Break vacation with our teenaged daughter. It’s her Christmas gift (and ours) and she couldn’t be more excited. We used several award travel tricks (points on Southwest Airlines and discounted credits on Airbnb) to keep the costs of this trip in our budget.
Amy and I looking forward to an end-of-year housesit in San Diego. This will be our tenth and last trip this year. We’ll be watching two cats, cooking healthy meals, enjoying the warm Southern California sun, riding the homeowners’ bikes and seeing the largest balloon parade in America. We’re very happy to be “doing without.”
What are your favorite holiday traditions?