Alexa von Tobel on Making a Financial Plan for the Holidays

We started this year in 2022, ending it in 2030. While it seemed like this year was going to be the year everything went back to normal, with a tumultuous economic and political climate, surging travel costs, and a potentially dangerous flu season, there’s just a lot more logistics to consider. From managing expectations to creating a budget that works for your family, here’s what Alexa von Tobel had to say about making holiday magic without compromising your finances or your sanity. 

Minimize Stress

Money has been extremely stressful for the majority of America this year. There’s not a household in America that has not thought about money, the financial implications of the market, the financial implications of their jobs, the financial implications of schools and childcare, that has all been up in the air and complicated. With that said, just like any other year, this is the year to sit down and have a really thoughtful budget. Sit with your partner and say, Hey, what is the amount that we feel really comfortable spending across it all? One rule I have for people is you never want to go into credit card debt for the holidays. It’s not worth it. The stress that it creates is worse for your family than the joy it brings to the holidays. Little kids, as we all know, and even big kids, a year later they’re not going to remember the present, but you will have the credit card debt and that will create real stress for your family that actually eats away at any of those moments of joy. 

Manage Expectations

Once you’ve created a budget, call your nuclear family or anyone you’ll be celebrating the holidays with and say, How do we make it really special? What are our rules on gifts this year? Are we doing one gift per child? Can we do a group gift for grandparents so we can pool our money together? I love pre-planning on gifts. The same goes for food. How many people are we hosting? What does that look like? I always like to make everybody a part of the food plan. Mainly because I like to make sure people are going to be happy, but it’s also really good for your budget. Does anyone have any special requests? Can you handle dessert? One family handles wine. Is everybody happy with that plan? Being very proactive about those discussions, one, allows you to share the budget, and two, also really allows you to make sure you’re managing expectations. Everyone stresses about money. Everybody. So often you’re actually easing burdens off of other people, too. People are grateful when you make a plan and get everyone on the same page. 

I actually make a schedule on my google calendar and share it with the relevant people, down to when we wrap. It helps make sure I’m not miserable or wrapping alone in the dark. And on the flip side it helps manage everyone’s expectations because people can come back and say, I don’t want to eat there or I prefer to do this thing. It just helps with all of the macro-family dynamics. And all of that said, good luck!

Shift the Focus Away From Presents

When it comes to kids, I’m a big proponent of trying to do more experiences. As much as possible, we try to temper the craze of opening twenty-five presents. It’s not good for them. It’s not good for your budget. We’re also very thoughtful with our kids about the things we’re saving for. In our house we sit down and write letters to Santa. We’re very clear what goes into those letters. Our Santa has a cap. We write the letter. We put the letter in the mailbox. (I actually get it out of the mailbox and save it.) But we do all of that so that expectations are clearly managed. You expect three gifts, not 42, and if there’s a few extra surprises above that, that’s okay and fun. I also make a list of things my kids really need or that they’ve started asking for and I go in with a clear budget of how we’re going to shop. The last thing I would ever do is walk into a store without a list because you end up buying so many random things.

Also remember that magic can come from the whole experience. The books that you read, the traditions that you have. We now hide the Elf on the Shelf like every other family in America. We have certain books that we read the night before. We make the cookies together for Santa. We leave out the carrots. We have special pajamas. We like to go to church. We have certain music that we play. So it’s the whole ecosystem. Presents are part of the magic, but they’re not the magic. And I just think it’s important to remember that through the lens of little kids’ eyes. 

Alexa von Tobel is the founder and Managing Partner of Inspired Capital.