Paul's Insights: Scrooge-onomics hit three out of four this Christmas
It could pay to hang out some of your smaller stockings for Santa Claus this year. Research by Finder shows three out of four Australians are tightening their purse strings this festive season, and drawing a line on gift giving.
Ebenezer Scrooge may have been onto something when he said, “Bah! Humbug” to Christmas presents because in pure economic terms gift giving doesn’t always stack up. I may spend $100 on a present for my wife, but if she doesn’t like it she won’t get $100 worth of enjoyment. And for economists that means breaking one of the golden rules of spending.
It’s a line that fewer of us are willing to cross this year. From bulk buying to DIY gifts, Finder says 76% of Australians are looking to cut costs this Christmas.
One in two people are setting a spending limit for gifts, while 17% are running a Secret Santa to cut the number of people they have to buy for. The same percentage will make their own gifts, and 13% of us will rummage through last year’s presents to re-gift unwanted items in 2018. A further 15% will take a leaf straight from Scrooge’s book and skip presents altogether.
It’s not the sort of news that will be welcomed by the retail sector, which relies heavily on the bumper Christmas spending boom. But the next few weeks are a time of year when we’re under a fair bit of pressure to buy something – anything – for friends and family.
Perhaps this explains why so many of us don’t receive gifts we particularly value. Gumtree’s 2017 Unwanted Gifts Survey found Australians collectively received more than 21 million unwanted gifts last year, with an average value of $68 each. It doesn’t help either that one in five of us admit to shopping online after we’ve had a few too many festive drinks.
Christmas really is a magical time of year, but it’s always worth thinking twice before wasting money. Make a list, make a budget, and make it count are handy guidelines to follow.
It can be worth doing some research to find out what you could give that will be truly valued – and kept. Maybe you could help a family member with your time instead of buying yet another unwanted gift. Consider pooling your money with friends and family to purchase quality rather than quantity. Or run the risk of receiving the novelty t-shirt you’re gifting this year, in your own Christmas stocking next year.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.