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Can You Spend Your Way to a Merry Christmas?

Meridian Points

December 14 Meridian Points

Thanks to this year’s expansion of Black Friday into a full week of deals and door-busters, we are now 14 days deep into the Christmas shopping season. Families rushed through their turkey dinners and scattered from the table to shop on Thanksgiving afternoon. We had been primed since Halloween, if not before, with warm images of families drawing closer over the latest gadgets, toys, and trends. The retail industry has trained us to associate buying “stuff” with fellowship and happiness. Ironically, we sacrifice the very experiences that we seek in order to buy into that association – both literally and figuratively.

With the help of terms like “Black Friday,” “Small Business Saturday,” “Cyber Monday,” and even “Cyber Week,” holiday shopping has become a series of holidays. And it’s no mystery. Our retail economy now depends on Christmas sales. Every year, the National Retail Federation predicts how much holiday sales will increase over the previous year. Merchants measure fourth quarter success based on their ability to meet growth expectations and subsidize the balance of the year’s revenues by selling holiday gifts, decorations, and miscellaneous supplies for general cheer.

The corollary is that we spend more money on holiday gifts and entertainment with each successive season. For many of us, that means buying on credit. It’s not unusual for families to spend the first half of the New Year paying off the previous Christmas (and the second half of the year paying off summer vacation). This comes at both financial and personal opportunity cost. Not only are we focusing on “stuff” instead of fellowship, but we are spending money – often money that we don’t have – that we should be saving to create a secure financial future. Some of us are really missing the boat. What are we really trying to capture, and how can we do it more authentically?

Why is materialism so mixed up in the meaning of the holiday season? According to common lore, Christmas first became associated with Santa Claus and gift giving after Clement Clarke Moore wrote the poem, “A Visit from St. Nicholas,” for his family in 1923. More commonly known as “Twas the Night Before Christmas,” the poem was picked up by the press and became wildly popular. However, for decades, families exchanged small items such as oranges or candy. The commercialization of Christmas took off in the 20th century when Coca-Cola created the modern image of Santa and used it in highly visible and nostalgic advertising campaigns. And the rest, as they say, his history.

How can you keep the spirit of generosity from becoming the ghost of Christmas past?

Wouldn’t you prefer to make a New Year’s resolution other than “Pay off Christmas”? To avoid a financial hangover, figure out how much you can afford to spend on holiday gifts and entertainment before you start spending. I find that most people are quite good at honoring spending limits as long as they know what their limits are. And if doing so means that you’ll be less extravagant than you have been in the past, I can almost guarantee that no one will argue with your commitment to make the holidays less about money and more about meaning.

What can you do to make the holidays more personal and less about possessions?

Talk to your family friends about setting limits. You might decide to set a dollar limit per recipient, to give gifts to children only, or to substitute a group gathering for a formal gift exchange. Some of my most meaningful holiday experiences have been about giving differently and giving together.

For example, my company skips the traditional holiday Christmas party. Instead of a dinner at a nice restaurant, we work together making and distributing baskets of food for the Empty Stocking Fund. We donate the cost of a holiday party to the Empty Stocking Fund to help pay for the baskets. That is good financial planning!

As always, give us a call if you need assistance.

Meet the Author

Tom Coulter, CPA


Tom is the President and a founder of Meridian Trust. Tom graduated from The University of Tennessee, Knoxville, in accounting with honors, in 1978. Tom previously worked for the international accounting firm, Deloitte. He later joined the financial medical advising firm, FIS Associates, before founding Meridian Trust in 1997. Tom has worked extensively in retirement planning, taxation, estate and financial planning and investment management. He is a Certified Public Accountant, a member of the American Institute of CPAs (AICPA), and the Tennessee Society of CPAs (TSCPA). Tom is also credentialed as a Personal Financial Specialist (PFS) by the AICPA.