How to handle gift giving while in debt


Michelle Singletary takes time off for the holidays. In her absence, we offer this updated column from her archive, which originally ran on November 26, 2019.

If you’re in debt, it’s responsible to ignore the pressure to give. Suppress, as best you can, the misplaced guilt that love comes wrapped in a pretty box with a red bow.

Of course, that’s easier said than done, isn’t it?

You’ve been indoctrinated to give until it hurts, even if it means waiting to pay off debt.

This was the predicament faced by a Virginia couple whose situation can be relatable to anyone deeply in debt and also struggling with how to reverse their gifts.

“I have two young children and will have to give them at least a few presents under the tree,” the woman wrote. “My husband and I have $62,000 in credit card debt. We are working with a debt management service to eradicate it in three years. It’s hard, I’m not going to lie, but I worry about what to tell people about not reciprocating gifts. Any advice?”

Before answering, I needed some background information. How old are the children? How did you end up with so much credit card debt?

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Much of the debt was built up after the woman lost her job during the Great Recession. It took her a year and a half to find a new one. Almost everything went on credit — rent, utilities, groceries, she said.

There were marriage costs, followed by childcare costs for their two children.

“Then it was more cost of living, bad choices, impulse buying and retail therapy,” she said. “I tried to consolidate my debt into one credit card with a lower interest rate, but the fine print, which I only read later, said it had to be paid within 12 months, which was not the case. Over the years, more balance transfers, in addition to purchases, caused the total credit card balance to spiral out of control.”

So here they are now, trying to get their finances in order.

“I work overtime and squeeze as best I can,” she wrote. “My focus is on helping my family get a better place in life, not keeping up with the Joneses.”

Special occasions — birthdays, weddings, anniversaries, and other holidays — make it difficult to stick to a debt repayment plan.

How do you survive the holidays?

“Some people expect gifts,” the mother wrote. “I just don’t want it to get too awkward when I give them homemade cookies. I’ve tried to lay the groundwork and tell them that we’re saving money this year and not expecting too much, but of course the expectation is still there. We tried this last year, and they were disappointed, and the discussion about our gift choice was frowned upon.

Since the couple was in the process of paying off the debt, I focused only on the question of what to say if you can’t give as you want.

First, let’s talk about what I suggested they do for their kids, who were 7 and 20 months old.

You don’t need to buy anything for the baby, as he will probably be excited about opening boxes. When my kids were little, I would look around for games, toys, and stuffed animals they didn’t play with that were buried in the bottom of their toy bins or stored in the top of their closets. I packed up those things and put them under the tree.

Yes I did that. (All grown up now, my kids still love to joke about it.) But seriously, who remembers what they got when they were 2?

For an older child, buy her only a few things – with cash. Choose an important thing she wants that is not too expensive. I also suggested that if they have a family gathering, wait and open all the gifts at once. This way, the kids get all their presents at once, making you feel less guilty for not giving them a lot of stuff.

This brings me to the next of kin. Own your financial truth.

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Be honest about the overwhelming guilt. You don’t have to share specifics, but let people know that you’re trying to be financially responsible and that you can’t afford to exchange gifts until further notice. You may be surprised how many friends and family members will feel relieved that they too are struggling.

There is always the possibility that you will be called back. Ignore the. If you have a lot of credit card debt, you can’t afford to worry about other people feeling slighted if you don’t give them a sweater they won’t like anyway.

Holiday shoppers, skip the store credit cards

Your fault is your priority – not trying to please an adult who acts like a child.

Don’t let your emotions derail your commitment to living within your means and cutting back on your obligations.

Whatever the celebration, give yourself the gift of financial stability by staying focused on paying off that debt. Besides, as I tell people all the time, it should be about your presence, not your presents.

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