Mrs. PharmD Investor has never been a big spender. For the longest time, I thought there was something odd with her approach to shopping and her way of celebrating holidays. You see, I come from a family that goes all out on every major holiday. Mountains of gifts at Christmas, dozens of roses and the latest jewelry for Valentine’s Day, and so on. So naturally, I brought this holiday spending knack into my relationship and quickly overwhelmed Mrs. PharmD Investor. She was very persistent in her ways but so was I. It literally took me nearly 20 years to break from my consumer spending habits that were deeply engrained in my hippocampus.
In the United States, consumer spending around the holidays consistently ranks in the top 10 spending events throughout the year.
Example Holiday Spending Stats (Valentine’s Day):
- $21.8 Billion: Total Valentine’s Day spending projected for 2021
- $164.76: Spending per person celebrating ($329.52 per couple)
- $8.1 Billion: Amount Americans will spend on jewelry ($4.1B), flowers ($2B) and candy ($2B)
Source: WalletHub. 2021 Valentine’s Day Facts – Gifts, Money & More
I know I run the risk of sounding incredibly cheap by suggesting that we not give in to the pressures of spending during these major consumer spending events. I completely understand that celebrating holidays (1) is often an expectation within a particular family, (2) brings back fond memories of your childhood, or (3) simply is something you enjoy doing. However, I have a different way to “celebrate” the holidays while improving your finances at the same time. This approach to increasing savings and investments is not for everyone. But for the few that are ok with liberating themselves from spending and committing to a higher savings rate…the Hallmark Holiday Fund might be your answer!
What is a Hallmark Holiday Fund?
A “Hallmark Holiday Fund” is exactly like it sounds. A savings or investment account that contains funds that would have been spent on a “Hallmark Holiday” or any other forced consumerization event. For readers outside of the United States, Hallmark is the oldest and largest manufacturer of greeting cards and other holiday-specific gifts. A “Hallmark Holiday” is a holiday that exists primarily for consumer spending and not necessarily a cultural or religious day of observance. Examples include Valentine’s Day, Mother’s/Father’s Day, Teacher Appreciation Day, and Easter (the bunny kind…not the Resurrection kind). I also include Black Friday and Cyber Monday given the only purpose of the days is to separate your hard-earned money from your bank account. Instead of spending money on Hallmark Holiday gifts, the money can be placed into a savings account or invested in the stock market. Or use the money to fund your Roth IRA contribution for the year!
**A side note…celebrating your loved one, parent, or children is important. I am simply sharing an approach to celebrating that doesn’t involve a Mastercard or Visa card**
It Takes Two…
As I shared, it took me 20 years to unravel from my consumer spending habits formed at a young age. Luckily my significant other was already conditioned to not give in to marketing efforts and keeping up with the Joneses. It really took an agreement between us to finally approach holidays in a very different manner than most people. Specifically, we view the “Hallmark Holidays” as completely artificial and designed to take our money. Don’t get me wrong, the underlying meaning of celebrating a parent, loved one, or child is special but the gratitude doesn’t have to be displayed with quickly forgotten candy, gifts, etc. I recommend inching into the new approach with some ground rules.
Ground Rules:
- Both giver and receiver must be on the same page
- Acknowledge that spending money is designed to satisfy the company and not always the consumer
- Agree on a spending limit (or no spending at all)
- Agree to save the money that would have been spent in a high-interest saving account or better yet…invest the money in the stock market!
- Design an alternative approach to celebrate the day
Alternative Approach to Holidays
Some of these will definitely sound a bit cheesy so swap out these ideas with others that make sense in your world.
- Write a letter or make a card
- Go to a museum
- Create a music playlist
- Plan a picnic in a special place with you and your loved one
- Make a meal or dessert (something new and different)
- Create a gift! Write a song, a poem, artwork, woodwork. Really any talent you have would apply here.
- Have a movie marathon
- Create a scavenger hunt with notes that are significant to you and your loved one
Example
A newly married couple decide that paying down student loan debt and investing for their future is a priority. They decide to do away with Valentine’s Day spending ($330/year). Instead, they decide to invest the money in an S&P 500 Index fund.
30 years and a few kids later, our couple could have over $60,000 saved up in a brokerage account (assuming 10% annual growth).
What is my approach to Hallmark Holidays?
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We don’t spend money on gifts for Valentine’s Day
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We have agreed that Mother’s Day and Father’s Day should include a local craft beer. So instead of buying gifts, we fill up a few growlers with a Belgian White or IPA and enjoy the beers together to celebrate the day.
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After a “non-spending event” like Valentine’s Day we transfer the money we would have spent into an investment account.
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We invest the money in an S&P 500 Index Fund.
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We try to teach our kids the real meaning of holidays so it doesn’t take them same 20 years that it took me to learn how to save money.
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We try to celebrate the “Hallmark Holidays” in our own special way.
