Before heading out to shop for gifts, consider your motivation to buy in the first place. Are you purchasing gifts because it’s something important to you and makes you feel good, or because you believe it’s expected of you? Explore your underlying motivations. There is no right or wrong; however, determining your purpose or motivation by understanding your Money Mind® and the reason behind your decisions can help you establish how much you want to spend and stick to it. By understanding how your biases affect your decisions about money, you can begin to make better spending choices to keep your holiday budget on track. You may even discover that in light of your relationship with each person, material gifts may not be necessary and you may choose to limit the number of gifts and the amount you spend on them.
This insight should provide an awareness of needs versus wants. Before heading out to purchase the newest iPad on Black Friday, recognize that this is not a need. It may be a very important want and a reasonable item to purchase, but not a necessity. Further, you might also determine who you need to purchase gifts for versus who you want to purchase gifts for. Ideally, we’d all like to be able bestow gifts on everyone we care about in our lives, but unfortunately, for many of us, that is not a financial reality. Clarifying needs versus wants can go a long way to ensure better financial decisions, especially once you’ve created limits and barriers to your holiday spending.