Article hero image
Illustration by Cari Vander Yacht

Ask Lizzie: How Do I Afford to Buy My Rich Sister Something She’ll Actually Like! And Other Holiday Conundrums

Wealthsimple makes powerful financial tools to help you grow and manage your money. Learn more

Dear Lizzie,

Every holiday season, I dread this moment. The whole list makes me anxious, but my sister the most. She has done really well in her career and has made an enormous amount of money, and every time I buy her a gift that fits my budget, I feel like a little kid who shouldn’t be sitting at the grown-ups table. How do I escape the holiday season, get her something that she’ll love and still feel like an actual adult? Should I just suck it up and spend more than I should?

Oh and also: if you could give some general advice about gifts — who should get them and how to decide what to spend — that would be great.

Help!

Oscillating in Ottawa

Dear Oscillating,

You are not alone. So, so many people find gift-giving excruciating. I have watched this process turn my extraordinarily level-headed husband into a nervous wreck. Do these earrings look like something his mother would wear? Does this scarf? Does it???

There are a lot of issues woven into your letter. But let’s start with your sister. Normally, this is the point in an advice column where the columnist peels back layers of family trauma and lays out why family always makes us keenly aware of our insecurities. But I actually have some advice that will help you solve your sister question, and hopefully lots of other folks on your list. Think about giving something that makes an emotional impact rather than the most expensive thing you can afford. It might sound obvious, but there’s science behind it.

First, a note on price. The research out there says money doesn’t matter as much as most of us fear it does. Really! That study shows that gift-givers overemphasize the importance of price, and recipients just don’t care all that much. They tend to value thoughtfulness more — it might be a cliche, but it’s true. And now a note about how to be thoughtful.

To help with this column, I got in touch with University of Toronto professor Cindy Chan. Chan began by sending me some of her work that focuses on giving experiential gifts rather than monetary ones. Importantly, she found that when you give someone an experience, it strengthens the bond between the two of you more than when you give them a thing. But what’s interesting is why: emotion. Chan writes that “a safari adventure can elicit feelings of awe and fear, a rock concert can fuel excitement, a spa package can promote calmness, and an opera may move one to tears.” None of these things are felt by the experience of receiving, say, a hat. Unless it’s a really scary hat.

In her studies, the more emotional recipients felt during that gift experience (crying at the opera, for instance), the closer they felt to the giver. So, instead of asking yourself how much you should spend on your sister, think about what moves her. And if it’s something you can do together — a concert of a band you guys listened to as kids, maybe — all the better. But Chan’s work found that the emotional satisfaction persisted even when the experience was a solo activity. And they often feel special even if they’re not that expensive.

Now let’s get to your second question about the rest of your list. For that, I’ll lay out my six rules for giving.

First rule

Recommended for you

  • Two Genius Moves to Make With Your Tax Refund

    Finance for Humans

  • Canadians Are Keeping Their Money in Cash. It’s Risky.

    Finance for Humans

  • How to Make Your Money Make Money

    Finance for Humans

  • Ask Lizzie: Help! I’m Planning a Wedding and I Don’t Want to Bankrupt My Friends!

    Finance for Humans

Do not call it “gifting.” I get that some people act like that’s a real word, but I hate it, and this is my column, and I make the rules. Brands, listen to me: “give” is a perfectly good verb.

Second rule

Set a budget. It’s a great way to keep things from getting out of hand. Far too many people get carried away, stressed out, or even go into debt because of holiday spending. And there is particular pressure on low-income families. Remember that study about how the giver tends to care more about the price of a gift than the receiver? Repeat that five times. In terms of how much to spend, a relatively common statistic is that the average family spends 1 percent of take-home pay on holiday gifts. That can be a helpful yardstick because it scales depending on what you make. But once you’ve set that budget, stick to it! It’s awful to start the new year feeling weighed down by what you just spent, or paying hefty interest fees.

Third rule

Presents are (mostly) for children. Kids love gifts. They love opening gifts. They love playing with gifts. They love making houses out of the boxes that some gifts came in. So go ahead, get the children in your life presents. But!

Fourth rule

Get kids gifts from a list. If they are under eight, their parents can help you out with what they want (and what their parents really, really don’t want them to have). Over eight, they probably have a list they want to show you. But to go back to Cindy Chan’s initial point, ask if they have a list of things they want to do. You know what makes an amazing gift for a kid? A trip to a zoo or a cool museum. It’s an experiential gift, and it’s also something special that you, the giver, could do with them if you wanted. Teens and tweens do well with gift cards or something explicitly from their list. Teens are terrifying, so it’s always best to ask if they want tickets to the Lil Nas X concert rather than risk them roasting you for assuming.

Fifth rule

Smart investing tools and personalized advice designed to build long term wealth.

inline cta

This is a money-saving rule. For little kids, it’s really the act of unwrapping that counts. Do you have old jewelry that could become a box of magical trinkets? That’s a four-year-old’s dream. Are you part of a local buy-nothing group, or Facebook Marketplace? They are absolute gold mines for gently used kid items. My own son (it’s ok, he can’t read) will be getting some puppets that his cousin no longer plays with.

Sixth rule

This is another good one for budgeting. Divvy up the adults and exchange one present each. This is a practice that my extended family did, and I think it’s great. We celebrate Christmas, so each Thanksgiving, we drew names out of a hat, and each person gave and received one gift each. We set an upper and lower limit on price, so we all got one decent item, but nothing too fancy. And we were upfront about what we wanted. I still have the pair of cowboy boots I asked for and received when I was 25. That was, uh, 21 years ago. The key to making this work is transparency. Far too many people are afraid to ask someone what they want. You don’t have to magically know what your sister/cousin/spouse wants! That is for car commercials with big red bows. Just go ahead and ask.

And lastly a note on who you should and shouldn’t get gifts for. I generally buy presents just for family and will do something like bake cookies for colleagues or friends. But there is one group of people who I think deserve a little special recognition. You asked how to decide who gets a gift, and I’d argue that anyone who provided a service belongs on that list. That might mean someone who walks your dog. Or an apartment building super. A hairstylist. A letter carrier. In these cases, cash is great. But if you’re having a tight year, write a note. Tell someone what they mean to you, and that you’re thankful. It’s been a rough few years for everyone, and it’s worth remembering that we are all here now, trying our best.

Have a happy and healthy holiday,

Lizzie

Lizzie O'Leary is a longtime economic and policy journalist. She hosts the podcast “What Next: TBD” at Slate.

Money Diaries

"MY UNDERGRADUATE ADVISER TOLD ME I SHOULD JUST FORGET ABOUT THE WHOLE WRITING THING. ‘YOU SHOULD FIND A GOOD MAN AND GET MARRIED,’ HE TOLD ME."

Margaret Atwood

TLDR Newsletter

Business news made simple

Sign up for our weekly non-boring newsletter about money, markets, and more. Sorry, TLDR is currently available in English only.

By providing your email, you are consenting to receive communications from Wealthsimple Media Inc. Visit our Privacy Policy for more info, or contact us at privacy@wealthsimple.com or 80 Spadina Ave., Toronto, ON.

  • Finance for Humans

    Ask Lizzie: How Do I Know If I’m “Paying My Dues” or “Getting Taken Advantage of”?

    Our columnist looks at the incredibly slow changes happening in corporate culture — and how (and when) to stand up for yourself.

  • Finance for Humans

    Our Four Step Plan to Investing in a Crappy Market

    And oh, it’s been crappy. It's easy to feel like an investing genius when the markets are going up. But how do you stay smart when markets are... not up?

  • Grow your money

    Smart investing tools and personalized advice designed to build long term wealth.

    see-more cta
  • Finance for Humans

    Nine Ways to Be Smart When the Market Goes Down

    Smart investors don’t try to avoid downturns, which are inevitable. Instead, they make sure they’re in a good place when the markets go back up. Because that’s inevitable, too.

  • Finance for Humans

    Why Most Eco-Friendly Investment Funds Really Aren’t That Eco-Friendly

    There are a whole bunch of investment portfolios that claim to be socially responsible and environmentally benevolent. The trouble is that it’s super tough to pick a fund that delivers on its promises.

Wealthsimple

Grow your money

Smart investing tools and personalized advice designed to build long term wealth.

Get startedright arrow icon
TLDR Newsletter Logo

Sign up for our weekly non-boring newsletter about money, markets, and more. Sorry, TLDR is currently available in English only.

By providing your email, you are consenting to receive communications from Wealthsimple Media Inc. Visit our Privacy Policy for more info, or contact us at privacy@wealthsimple.com or 80 Spadina Ave., Toronto, ON.

The content on this site is produced by Wealthsimple Technologies Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. By using this website, you accept our (Terms of Use) and (Privacy Policy). Copyright 2023 Wealthsimple Technologies Inc.