7 Tips for Retirees To Give Great Holiday Gifts on a Tight Budget
Written by
Josephine Nesbit
Edited by
Jenna Klaverweiden
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The holiday season is one of the most expensive times of the year for most families. If you’re a retiree living on a fixed income, it can be especially challenging.
Consumers surveyed by Deloitte said they plan to spend an average of $1,778 this holiday season, an increase of 8% compared with spending last year. However, that doesn’t mean you have to spend more this year to give great holiday gifts.
Here are seven holiday gift-giving tips for retirees on a tight budget.
Start a Holiday Savings Fund
While it may be too late in the year to start saving for the holidays, Mark Henry, founder and CEO of Alloy Wealth Management, recommended starting a holiday-specific savings account.
“Saving money in small, manageable amounts is a great lifelong habit that can be especially helpful around the holidays,” Henry said. “If you can put aside $150 a month starting in January, you’ll have $1,800 to spend by the holidays, and even more if you put it in a high-yield savings account with 4% to 5% interest.”
Make a Holiday Budget
Henry also recommended making a holiday budget and sticking to it. “Decide how much you can afford to spend without going into debt, then make a list of all expenses associated with the holidays. Be as specific as you can, and consider things like gifts, groceries, decorations and travel,” he said.
If you shop without a budget, it’s much easier to spend more than you can afford.
To help you stick to your budget, Elvira Christiansen, director of retail and loyalty at AARP Services, advised making a gift list.
“Identify everyone you need to buy gifts for and make a detailed list,” Christiansen explained. “This will help you stay organized and focused, preventing overspending — especially important if you have a larger family or friend group, as gifts often represent the bulk of your holiday budget.”
Be Strategic About Credit Card Use
Credit cards can be great tools when used properly. “Many cards allow you to build rewards, and when you’re spending a lot of money like many of us do during the holidays, it makes sense to turn that spending into cash back or travel points,” Henry explained.
However, don’t spend more than you can realistically afford and pay it off promptly. “The worst thing you can do is rack up a bunch of credit card debt just to get through the holidays,” he said.
Shop Early
Don’t wait until Black Friday or the week of Christmas to do your shopping.
Deloitte’s survey also found that 78% of retail executives felt that earlier promotions were pulling holiday sales forward and emphasized the need for retailers to have the right products and prices early in the season.
“If you make a plan while we’re still in early November, you’ll be prepared with a list when those sales hit,” Henry explained. “If you’re traveling for the holidays, whether on vacation or to see family, book that ASAP if you haven’t yet.”
Pick Up a Side Hustle
Consider picking up a part-time job for extra cash this holiday season. “Many employers, especially retail and hospitality, seek seasonal help this time of year as business ramps up with holiday shoppers,” Henry said.
If you do work extra hours, it’s important to be aware of potential tax implications, Henry said. For instance, it could be enough to push you into a higher tax bracket. Or if you earn a certain amount of income while collecting Social Security, you may have to pay Social Security back, he added.
Take Advantage of Memberships
Don’t overlook all the benefits that come with memberships.
“For AARP members, there are numerous discounts and perks that can help alleviate costs as you celebrate the season,” Christiansen said. For example, she explained that AARP members can save money on holiday gift baskets and bouquets from FTD or by purchasing gifts on a variety of items with Walmart+. AARP members also get discounts at restaurants like Bonefish Grill and Carrabba’s Italian Grill.
Give Something Sentimental
Don’t overestimate the power of sentimental gift-giving.
“Sometimes sentimental value beats monetary value. If you have belongings that you no longer use that hold deep sentimental value, like heirloom jewelry or a secret family recipe, give those as gifts to the people you hold dear,” said Brandon Hartman, retail expert and founder of RV Heating Warehouse. “These kinds of gifts usually become cherished keepsakes to those you give them to, which they can then pass on to those they love.”
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