Is skipping Christmas to save money a good idea?
That's the premise of an interesting story running right now on Forbes.com titled "How Much Money You'd Save by Skipping Christmas." The writer, Kate Adams, concludes that the average family would save $1,000, or $2,000 if they customarily traveled somewhere for the holidays, and then she offers several ideas on how you might invest that money.
It's an interesting, worthwhile financial exercise, adding up what you spend on the holidays and how you could invest it if you didn't, and I'm sure quite a few families this year are asking themselves that question: Should we skip Christmas this year?
I think this is a fiscally stupid idea.
That might sound crazy -- after all, there are a lot of smart arguments for not buying gifts. The venerable George Will wrote about the financial disaster that is Christmas a few weeks ago, starting off his column by stating, "Another huge, value-destroying hurricane is about to slam America, destroying billions of dollars of value. Another Katrina? No, another Christmas."
Will argued that we'd be a lot better off if we took our Christmas money and spent it on ourselves, rather than wasting our money by buying gifts for other people, often gifts that people don't want.
Deep down, I think he's right (although I'm not about to forgo buying my 84-year-old grandmother a Christmas gift) and it seems obvious that plenty of people dig themselves deeper in debt every year by buying too much. I know that early in my marriage there were a couple of years when we would have been much better off, financially speaking, if we had skipped Christmas or streamlined our gift giving.
And yet I think skipping Christmas, or Hanukkah, and investing your money instead is actually not as smart as it sounds. Now a few caveats first. Obviously, it's financially prudent to invest, and if you're not into Christmas, then that's another matter. If you're strapped for cash due to a job loss, a medical problem or some other unfortunate circumstance, then, again, you have to do what you have to do.
If you skip the holidays for one of these reasons, you're probably a lot smarter than I once was. I remember Christmas of 2001 very well. My funds were low, yet I felt like I needed to give my wife and three-month-old this amazing holiday. I wildly overspent, and now I wonder, "What was I thinking?" It's not like our baby had all of her hopes and dreams pinned on this Santa Claus guy. She barely knew who we were, let alone the guy with the white beard.
But if Christmas is a holiday that you hold near and dear, and if you truly get pleasure out of buying your family and friends gifts, then I don't think you should feel that you're doing something financially wrong when you open up your wallet. Skipping the biggest holiday of the year to save your money may only demonstrate that you weren't very responsible with your cash during the other 11 months. I mean, why not get rid of cable, stop buying books or going to the movies? Why buy that shirt you like but don't really need? Why ever go on a vacation? Why buy anything that falls out of the basic necessities categories?
Yes, we need to save. As a nation, we need to save much, much more than we do, and I myself need to be save more. Yet while skipping Christmas and socking that income away instead might seem on paper to be fiscally responsible, I'd rather strive to be one of the people who sock away money throughout the year and can still spend their money on the things that improve their quality of life. In my opinion, that's the ideal investor.
Geoff Williams is a regular contributor to WalletPop.com, as well as the author of C.C. Pyle's Amazing Foot Race and co-author of the soon-to-be-releasedLiving Well with Bad Credit.