The holiday season is here and many people are scrambling to find ways to purchase gifts for friends and family.
Personal finance author and media personality Suze Orman offers some advice about the best way to go about the task without being "cruel to yourself."
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In that spirit, Orman offers a warning for people who want to be generous during the holiday season but don't want to run up their Amazon (AMZN) -) spending to unaffordable levels.
"With Thanksgiving upon us, we are now in the heart of the holiday season, and I hope you will hold one of my most important lessons close," Orman wrote on her blog. "For a gift to be truly generous it must be as generous for the giver as it is for the recipient."
What Orman worries about during the holidays
Orman, who has appeared for years on major television networks such as CNN (WBD) -), ABC (DIS) -) and NBC (CMCSA) -), explained what she fears for people and their finances during the gift-giving season.
"I worry that many of you are not generous to yourself. When you spend more than you can afford, that's not being kind to yourself," she wrote. "When you run up a bigger credit card balance because you think you must buy gifts you can't afford, that's downright cruel to yourself given that you likely will be paying 22% annual interest on any unpaid card balance. When you dip into your emergency savings fund to cover the cost of gifts, that's the opposite of generous — you just decreased your financial security to buy a gift."
Orman said she is extra concerned this year because she sees trends suggesting spending will be up during the holidays in 2023.
"I am worried because I just read a report that people expect to increase their holiday spending by 14% this year, compared to 2022," she explained. "The average per-person spending is expected to be more than $1,600."
Image source: Getty Images
'I am not being a grinch'
Orman stressed the importance of budgeting within one's capabilities and insists she is not trying to stop people from enjoying all the fun and cheer that comes with the season.
"I am not being a Grinch. I am being realistic," she wrote. "This report that people expect to spend more comes at a time when credit card debt has reached a record high of $1 trillion. And this bears repeating: The average interest rate on card debt right now is 22%."
"If you feel compelled to buy gifts, I want you to put in extra time to find meaningful gifts that are within your budget," she continued. "No budget you say? C'mon. At a minimum, you must, must, must give yourself a hard budget for your holiday spending and stick to it."
She explained a simple rule that she believes everyone should follow.
"And as for what the budget should be, your main guideline must be that whatever you spend you can pay for in cash or pay off immediately when the credit card bill arrives in January," she implored.
Orman offered a suggestion, especially for adults with children.
"For those of you with young families, why not make it a family tradition that everyone makes gifts?" she asked. "That not only will satisfy the generosity test, but it will also make for incredible memories."
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