Lizzy and Lissa break down the hidden costs – financial and otherwise – of birthday gifts. From the financial strain of gift-giving expectations to the emotional and social pressures that come with it, they break down how birthdays can impact your wallet and your well-being. Should you splurge, stick to a budget, or opt-out altogether?
Lizzy and Lissa break down the hidden costs – financial and otherwise – of birthday gifts. From the financial strain of gift-giving expectations to the emotional and social pressures that come with it, they break down how birthdays can impact your wallet and your well-being. Should you splurge, stick to a budget, or opt-out altogether?
Main Topics
00:00 Introduction
01:14 Running The Numbers Segment
02:39 The Emotional Impact of Gift Giving
06:00 Gift Giving in Relationships
11:06 Balancing Budget and Thoughtfulness
22:46 Budgeting for Gifts
23:54 How Much to Spend on People
24:27 Are Gift Cards Lazy?
34:17 Family Dynamics of Giving Gifts
41:03 20 Cents Segment
References for Statistics
https://blog.snappy.com/posts/employee-birthday-celebrations-and-gifting-higher-morale-and-increased-retention
https://capitaloneshopping.com/research/gift-card-statistics/
Lissa: Liz, your birthday was not too long ago. Did you get any good birthday gifts?
Lizzy: Girl, I got so many gifts. People spoiled me and I did not expect it. So, today we're talking about are birthday gifts worth it? Let's talk about it.
Lissa: Let's talk about it.
Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and a certified financial planner, brand new. Oh, I got so excited. We're best friends who talk about money...
Lizzy: And everything else.
Lissa: So are birthday gifts worth it?
Lizzy: First up, running the numbers on birthday gifts.
Lissa: According to a study conducted by Snappy, a gifting company, 89.4% of people enjoy celebrating their birthday. No surprise.
Lizzy: Low key that feels higher. Oh, I feel like I know a lot of people who are whatever about their birthday.
Lissa: Who don't care?
Lizzy: Yeah. Okay. In the same study, 90.1% of people reported that receiving birthday gifts made them feel valued and loved.
Lissa: I'm also not surprised with that.
Lizzy: Yeah, I'm not surprised for that.
Lissa: Snappy says that, "The average amount spent on a birthday gift depends on the relationship to the person being celebrated. Usually it's around $50 to $60 for a close friend or family member and a little bit higher for significant others."
Lizzy: Yeah, I could see that.
Lissa: Yeah.
Lizzy: Makes sense.
Lissa: No surprise.
Lizzy: Okay. Gift cards have long been a convenient choice for gift giving. According to Capital One Shopping, "The global gift card market was valued at $984 billion in 2023, and is expected to reach 3 trillion by 2030. It's going to triple.
Lissa: That's a lot.
Lizzy: Dang.
Lissa: That's a lot because that's a trillion for the gift card industry. And so the gift industry in general is way bigger than that.
Lizzy: Yeah, enormous.
Lissa: This is one of those trillion dollar industries.
Lizzy: Sheesh.
Lissa: That's crazy. Well, we know there is more to life than numbers and statistics, so let's talk about it.
Lizzy: Are birthday gifts worth it?
Lissa: Are birthday gifts worth it? Obviously receiving it is a different story from giving. So, we're talking about giving gifts.
Lizzy: Or receiving gifts.
Lissa: Okay.
Lizzy: Let's talk about both.
Lissa: Yeah. There's a lot to say about gifts.
Lizzy: There's sides to this. All right, Lissa, we've talked at length on other episodes about how you are a gift giver.
Lissa: Yeah. Well, let me reiterate for people who are just finding Net Net now or new to the show, I love giving gifts. I've historically been known by my friends as a gift giver. I've in the last couple of years through therapy, through self-reflection, through inner work, found out where that came from. And I think a lot of it is that I got gifts from my parents and usually when I got stuff from them, and I come from an immigrant family, we were lower middle class. And so we didn't have a ton of money, but they would reward me with gifts. So if I did well in school, I'd get a gift. And then obviously on important big days, like my birthday or Christmas, I would get gifts. And so I always associate it with love and also success and just anything. Giving a person something I assume makes them feel good because on the flip side, when I receive stuff, it makes me feel good.
Lizzy: It makes you feel good.
Lissa: Yeah.
Lizzy: You said something on a prior episode when we were talking about this that has stuck with me ever since, which was that at some point you recognize that that may not make everyone feel good. It may make some people uncomfortable. And that was so interesting to me because it's not something I've given a lot of thought, but I definitely could see being the case that not everyone enjoys receiving gifts. It can definitely make people uncomfortable. They don't know what to say, they don't know what to do. So, it's interesting.
Lissa: I want to take this moment to apologize to anyone in my life, especially in my twenties, I'd say that I gave gifts to or gave things to and made them feel uncomfortable because I feel like coming out of college, we were all broke. We were all broke. I started making more money my mid-twenties and I would just buy a bunch of stuff and I would just give people gifts on their birthdays. I would give gifts on Christmas. Family, friends, everyone that I could buy stuff for, I would do it. And I just assumed, oh, it's going to show that I love them and I care about them. Not realizing now in hindsight that I know we said 9 out of 10 people on that stat enjoy getting gifts, but there is a 10% and it is just nuanced.
I do think giving gifts to people can make them feel uncomfortable, whether that's because... Well, I want to hear your story. I know you have a story on feeling the need to have to give back and reciprocate or maybe your financial situation isn't in a good place where you can give gifts or sometimes there's a power balance too.
Lizzy: Sure. Yeah, absolutely.
Lissa: That happens with gifts.
Lizzy: Yeah. So my experience with gift giving in general is it is one of the ways I show love. I don't think it's my highest love language, but it's definitely part of it. And I had a, I would say, pretty typical experience with it growing up. I got gifts on Christmas, my birthday. I would get little tokens of stuff on other holidays, but nothing super out of the ordinary. But over time I've definitely navigated how much, when, who, what the lines are. I get a lot of joy out of giving gifts to people. But then at the same time, you only have so much money and sometimes you only have so much energy.
And I'm fortunate to have several friends in my life who are very, very thoughtful gift givers, you are one of them, who put time and energy into that process because that is how they show love. The challenge though is that sometimes that has left me being like, "Ah, fuck." I appreciate it, but then am I not showing up equally as a friend if I'm not reciprocating that? Because sometimes I don't have the energy or like, "Oh my God, yeah, it's next week. I haven't thought about it yet." So then I rush to do something and then it's like my gift next to your gift is mediocre and it makes me feel like I'm not being a good friend. When if neither of us gave each other gifts, we wouldn't be in this situation.
Lissa: Yeah. Or even if you feel like that, that might just be your perception because the other person might not be thinking about that at all.
Lizzy: For sure.
Lissa: So it can create these emotions that doesn't matter if they are grounded in something real or not. It's how you feel, so it's valid and it's going to make you feel a way.
Lizzy: Exactly, exactly. And so yeah, sometimes that receiving of gifts can be loaded with emotions. The flip side though is so my birthday was not too long ago. I had a little get together and I feel like amongst our friends, normally for a birthday someone will bring a bottle of liquor or some wine. You and I give gifts to each other, but most of our friends do not. And in this situation, I felt like everyone brought me a gift, an unwrap the bag birthday gift. And it was very unexpected and very thoughtful and sweet and I did really appreciate it.
Lissa: You know what I thought about after of why that might be that this year was a little different, you got more gifts than usual? So, I think it depends on the level of gathering that you have.
Lizzy: Okay.
Lissa: If you are going out for drinks and you invite people and you're like, "Hey, on my birthday going out for drinks, swing by, have a drink with me." I think less likely for someone to buy you a gift.
Lizzy: They'll probably, "Let me buy you a drink."
Lissa: Right. Buy you a drink, very casual. Liz threw a party that was one of the coolest parties I've ever been to. It was a super moon vision board party where Liz provided all the things for us to do arts and crafts. Liz catered the whole thing. She made a feast. It was Asian fusion soul food.
Lizzy: Yep.
Lissa: Yeah. It was a whole menu. And so people didn't know that there was going to be that much food there and stuff, but I think it was the way you marketed it. You did it on Partiful, the app. You created a cool invite. You told people that, "This is what we're doing. It's an arts and crafts thing." So, it was like an event.
Lizzy: Yeah, that's fair.
Lissa: Yeah, that's fair. So I feel like maybe not that you were, you weren't asking for gifts, but people probably subconsciously or consciously felt like, you know what, I'm going to bring Liz something.
Lizzy: Which was very sweet and that energy came to the event. The interesting thing though, which has just been an observation for myself, the flip side of giving gifts. In fact, your love, Allan, as he was helping me, you guys helped me so much load up my car with stuff in the middle of the night after we cleaned up, said that he felt like I gave everyone a gift with that event. And I realized while I loved and appreciated receiving, the more of the joy of it for me was in putting that-
Lissa: The giving.
Lizzy: The giving to other people.
Lissa: Yeah.
Lizzy: And so you feel that way for sure. How do you navigate that in your life? Are there times when you have that energy or you don't? What makes you determine when you're going to give gifts or not?
Lissa: So before I was financially literate, so before I wouldn't say I was terrible with my finances, but I didn't know enough about personal finance to even make good behavioral decisions when it came to money. So I'd say back in the day, the differentiator of whether or not I got someone a gift or not on their birthday or on Valentine's Day, Christmas, Mother's Day, Father's Day is more so on am I going to see you? Proximity. Are we going to be doing something? For friends' birthdays, have I seen you recently? How close are we right now in this moment in time? That's what I would base it on. I didn't really base it on the budget, which is not a great thing if you're not tracking your spend.
Lizzy: For sure, yeah.
Lissa: I'd say nowadays it's primarily based first and foremost on does it fit within the budget? Because I'm not going to go broke or in debt to be buying people gifts. Well, maybe. I have this expensive gift in mind for Allan because it's his 40th birthday.
Lizzy: All right, fair.
Lissa: But that's a story for another day. That's my husband. That's my fiance.
Lizzy: Edit.
Lissa: We're going to get to that. We're going to have an episode soon on marriage and you're going to hear all about that. You're going to hear all about why I struggle with what he is.
Lizzy: That's why I said your love.
Lissa: My love. I was like, that sounded weird. Your love.
Lizzy: I didn't what to call it.
Lissa: I've never called him my love before.
Lizzy: Your lover.
Lissa: You've called him my love before I've called him my love. That's so funny. But to add to all that on what determines on whether or not I give a gift, I will give one scenario. And this is very, I think, unique because no one really does this to me in my life, except I'd say my mom. There have been rare occasions, and I don't know if it's just a particular year or birthday when my mom was feeling a way where either I didn't give the right gift or give enough or something where I don't think she's outright said something to make me feel guilty, but in a passive-aggressive way has made me feel guilty. And so I don't know if that stems back to my childhood as to why I care so much about giving gifts.
Lizzy: Sure.
Lissa: I think there's also an element of if I don't do it, if I don't show up, I'm going to feel guilty. And I think that was reinforced over the years. And my mom's not that, she's not greedy or selfish or-
Lizzy: Yeah, not at all.
Lissa: ... very nitpicky at all, but it might've happened once or twice and stuck with me as a feeling that, oh man, I got to make sure I give something good.
Lizzy: Interesting. The flip side, do you ever feel that way when you're receiving gifts?
Lissa: No.
Lizzy: Like, "Oh, I thought that person was going to give me something more?"
Lissa: The only, yes. With my fiance, there was one in particular. I don't think-
Lizzy: I think I remember this.
Lissa: You remember this one?
Lizzy: Yeah.
Lissa: Okay. This is the story. Story time.
Lizzy: Story time.
Lissa: I felt bad afterwards.
Lizzy: You did, yeah.
Lissa: But here's what happened. It was my birthday and in the lead up to my birthday, I was taking a financial class. These are graduate level courses to become a certified financial planner. I was so bogged down in studying. I was studying every day and I was like, "I don't have much extra time for learning. My brain is on overload. I'm burnt out." I was like, "After I'm done with this class, I just don't want to do any learning anymore." So Allan, being thoughtful, trying to be thoughtful, I guess he didn't tie all those things together in the context. But trying to be thoughtful because he knows I love learning, he bought me a pass, a subscription to Master Class for my birthday. And my immediate reaction was, "Did you not hear what I said? I don't want to do any learning. I'm burnt out from learning." And I was upset. I apologized later because he was doing something nice.
Lizzy: And under other circumstances, that would be a great gift for you.
Lissa: Yeah.
Lizzy: I think he was overthinking, trying to not give you something generic, something a reflection of his understanding of you. But it just wasn't quite right in the present circumstances.
Lissa: Yeah. And you know where else I think I might've been wrong is, I don't know if I ever told him this, but in that moment I thought I told him this. I had a Master Class subscription when I used to work at Google. My team organized it during the pandemic to give us all logins. And so when I had all this time back then, I watched pretty much every class. I know they add new ones, but I watched everything on there, like the Steph Curry one, the one on negotiating. I watched all of them. So I in my head thought that I had mentioned that to Allan, that I've done all the Master Classes, I don't need it anymore. And so it was just all those things in that moment that I was upset about. It was irrational to be upset about that.
Lizzy: Sure, yeah.
Lissa: It didn't last long. I apologized and I think he was able to get a refund and then he might've just gotten me something else.
Lizzy: But this was also, I think before he was living here.
Lissa: Right.
Lizzy: So you were doing long distance. So it was also a little challenging to be able to celebrate your birthday together as well. So that was another factor of him giving you something that he didn't have to physically give you.
Lissa: Yeah. So I'll admit they're ever so often, once in a blue moon I'll have a little bratty side. And that was one of those bratty moments.
Lizzy: We're humans. We're all human.
Lissa: We're human, right? That was a bratty moment. But for the most part, outside of that, that's the only story I can remember where I've gotten a gift from someone and been like, "What is this?"
Lizzy: I'm sure I've had moments like that. I can't think of a specific one off the top of my head. I think for me it would probably only relate to my significant other.
Lissa: Yeah, only significant other.
Lizzy: Yeah.
Lissa: It's like a different bar.
Lizzy: Yeah.
Lissa: It's like higher expectations.
Lizzy: Which is hard because from my last relationship being together for so many years and birthdays, Christmas, whatever, sometimes it's like, "Man, do I have to keep topping this?"
Lissa: Yeah. What else can I get you?
Lizzy: Yeah. And so sometimes we would agree to be like, "Hey, we're just going to do dollar store gifts, or we're not do anything crazy for each other." And you pick your spots, right? But it's hard when it is a show of love, it can be exciting. But there's also the line of, okay, there's the financial costs. Sometimes there's a time or energy cost if you're doing a handmade gift, which you and I have both done quite a few of. And that's been a thing for us. And that's something I always love to do. Though sometimes I wonder, I'm like, "Do people actually want this?" In the back of my head I'm like, "I like it." There's multiple reasons. There's practical reasons of you can give a lot of things to a lot of people sometimes at a relatively lower cost if you're making stuff. And it's fun and creative and something unique. But there have been times when I'm like, "Oh, does anyone actually want this?" So, maybe you're giving an undesirable gift.
Lissa: Yeah, I'll make things from time to time. Actually unrelated, not birthday gifts, but specific to Christmas, I created pottery for everyone.
Lizzy: I remember that.
Lissa: And I just gave one to my cousin and I was nervous about it. I was like, "All right, tell me if you like it. If you don't, it's okay. You could throw it away."
Lizzy: Right.
Lissa: Because it's handmade, so it's like one of one. It's like I wouldn't say-
Lizzy: They came out so good.
Lissa: I wouldn't say it's janky. It looks okay.
Lizzy: It's not janky.
Lissa: But does it go with your decor at your own house?
Lizzy: Right.
Lissa: I don't know.
Lizzy: Yeah. Do you appreciate this type of thing?
Lissa: Yeah. Do you appreciate it? And if not, it's fine. But I made it so...
Lizzy: See, I think I land on the, that's a net positive for those, for the handmade gifts. But there is also that emotional cost, whether it's something you made or something you picked out that's like, "Are they going to like it?" And that's a challenge because especially it can be really rewarding to give someone something and for them to appreciate it. And then if they don't, you're like, "Aw."
Lissa: So I talked a little bit about my decision tree of how I used to give gifts and how I do now. What about you? Where do you draw the line?
Lizzy: It's hard. I don't know that I have a good system right now. Even thinking about it, thinking about the holidays and budget versus having a lot of stuff going on in my life and saving for things. And there's still the part of me that's like, but I would maybe feel bad or maybe feel left out or there's some feeling that I know I will have if I don't make an effort to do something for people. And so there's a few things. There's definitely am I going to see them? If I have a friend, even if they're one of my close friends and I'm going to see them on their birthday because they live far or whatever, I'm not likely to give a gift.
Lissa: What about a milestone birthday? Does that change it?
Lizzy: Probably. It probably does, yeah. I would say though, depending on the relationship, if it was milestone birthday, I'd probably make an effort to see them, like a 40th birthday.
Lissa: True.
Lizzy: And then there's random one-offs where I just, I'm like, "Oh yeah, let's send you flowers or something." Part of this is I have a hard time shipping stuff. It's a silly thing that is one of those errands that's just hard for me to do. To go to the post office to get that accomplished, I can't tell you how many times I've been very inspired and bought stuff or cards for people. I have so many cards I've never given you, girl because it's just getting it done. So yeah, am I going to see them? Definitely how close are we? I do think about did they give me something? Not that I'm going to say they didn't give me anything, so I don't have to. But it's like a factor. More so if they did give me something recently, I'll want to reciprocate. Budget is in there, but I'm probably more how you used to be where I'm like, "I will figure it out."
Lissa: But your finances are in a pretty good place.
Lizzy: They are in a pretty good place. And yeah, I think I have a history of, "I'll figure it out." So I at times have budgeted for gifts throughout the year. For Christmas, I'll set aside money every month, which I think I would prefer to do it that way. I'm not currently approaching it that way right now. But it's interesting. I do track my spending on gifts and at the end of the year to see how much I spend, that was really illuminating when I first started really budgeting and tracking my spending, like, "Oh wow, I spent thousands of dollars on this and it's something I didn't account for at all."
Lissa: That tends to be the case. So, I always give people tips on how to manage that. It depends how you track your money and budget. You use YNAB, You Need a Budget. You got me into using it a couple years ago, which I love. And one of the benefits of an app like that, it's kind of like the envelope system. You can plan throughout the year for irregular expenses. It's not going to be the same every month, but if you have a general idea of what you need in that bucket, you can just start putting in towards it. So you always have this bucket to pull from for those things.
And so interestingly, I used to not budget for gifts, like I said, back in the day. And then when I started doing this, I started having to play around with, "All right, is that $50 a month or a hundred a month?" Because it varies, right? One month you might spend 200 on gifts if your three best friends all have birthdays in the same month. And then you might go a couple months without. So it's really on the logistical side, planning for these irregular expenses by creating a bucket, creating a savings bucket.
Lizzy: So to that point, how do you determine how much you will spend for a given person?
Lissa: You know what's crazy? Because with inflation, it makes it tough.
Lizzy: Yeah.
Lissa: So I would say historically, a fallback for me is a $15 to $20 gift card. I go higher now because things cost so much. You can't give someone a 15, a one, five, a $15 gift card to the movie theater because it won't get them a ticket, right? So I'd say anywhere in that 15 maybe to 30 range, depending on the level of friend. As a back, because we haven't talked about gift cards yet, but as a fallback thing to give a person and then let them go to Sephora themselves to go purchase whatever they want or let them do that. If I have something in mind or I know that someone's been thinking about something, then I'll get that for them. I also don't think we've mentioned a lot of people now, if you have a group of friends who are all friends with each other, sometimes you'll pull money together.
Lizzy: Yeah, sure.
Lissa: We recently, a couple of us put some money together to get a friend a Fitbit because she's been wanting to track her steps more.
Lizzy: Oh, that's cool.
Lissa: And a Fitbit coming from one person that's pretty big in the budget to spend $150 or whatever. But if you're splitting that with four or five people, then-
Lizzy: Yeah, sure it becomes manageable.
Lissa: Yeah, it's manageable, but it's a nice solid gift that they wanted. So, I don't really have an answer. I think I roll with the punches. That's actually one of the YNAB rules is you roll with the punches. It won't be the same month to month. So if it's different or you happen to spend more on a gift in a particular month, then you just adjust everything else to fit that and then keep it pushing. And then next year you'll know that you might need to allot more.
Lizzy: Yeah. Eventually you gather data and you can see how much you tend to spend and then your financial situation may adjust.
Lissa: Something else that I kind of do, but there's a way to be more practical about it. So something I do is I track people's birthdays on my calendar. Do you do that?
Lizzy: I do. However, side note, I recently realized I missed one of my best friend's birthdays because on an average daily basis, I don't know what the date is. I just don't. I have very little reason to know. And so I was on a business trip and I just wasn't paying attention. And I know her birthday, but I didn't know what the date was that day. And I normally have a reminder, and that happened for a family member a month later. It happened a few times. And I was like, "What the hell?"
Lissa: What's happening?
Lizzy: I keep missing people who they've been in my life my whole life, what is going on? And I realized I had started to put birthdays, especially of family, on a shared calendar with my ex. That was a family calendar. So he added his family members, I added mine, close friends that we both were friends with.
Lissa: And you deleted the calendar or you don't-
Lizzy: I deleted the calendar when we broke up, not realizing because I figured, "They're probably all in my Gmail that I've had for a million years." They were not.
Lissa: Oh, wow.
Lizzy: So I stopped getting reminders for all of these birthdays of people close to me, and now I have to recreate it.
Lissa: Oh, man. Well, you'll get that back fast. But so because I track birthdays in my calendar and I just know generally when my closest friend's birthdays are.
Lizzy: Sure.
Lissa: A trick is as your forecasting your budget for the upcoming months or even for the year ahead, you can just look at your calendar, see when people's birthdays are partially for gifts, but also for they might have...
Lizzy: An event, a dinner, a night out.
Lissa: A shindig, an event, dinner. Yeah. So then those particular months you need some extra money and then you can forecast your gift budget or your birthday-related budget for the year. I just think a lot of people don't do that because it's those irregular expenses that are different from month to month, the variable of stuff that throws people off.
Lizzy: Totally throw people off, yeah. And the stuff within that you didn't even think to track because it just feels like a one-off.
Lissa: Yeah.
Lizzy: Yep.
Lissa: Okay, random. Gift cards, do you think this is a great gift or a lazy gift?
Lizzy: I was going to ask the same thing. When I am giving one, for the most part, I feel lazy about it. I feel like I'm not doing my best as a gift giver, with the exception of my teenage nieces and nephews who I know they're specific that that's what they want. However, receiving them, I don't feel that way at all. I appreciate it just as much. And sometimes this is... Take all this with a grain of salt because I'm going to sound like such an asshole. But sometimes you receive gifts that are specific from people and it can be very thoughtful, but it's not necessarily something you need. And so I've found as I've moved, I just have lots of stuff and I'm like, I feel it was given to me with love. I don't want to get rid of it because I feel bad, but I don't need it. It's just like...
Lissa: And you wouldn't re-gift anything?
Lizzy: I don't think I have ever re-gifted. I should. It doesn't even occur to me, to be honest with you.
Lissa: I don't know that I've re-gifted birthday gifts, but maybe a Christmas gift that came from an aunt or something.
Lizzy: Yeah. Sure, I need to get on that train. So that's the flip side of a gift card is I know that I'm going to get something very specific that I will use. At the same time, sometimes those gifts that you wouldn't have bought for yourself are what makes it really cool and special. So I have mixed feelings about that, but I tend to feel a little inferior when I'm giving one.
Lissa: When you're giving one, yeah. I could probably relate to that a little bit. I'm moving away from that. I think I used to feel that way that, "All right, if I give someone a gift card, they're going to know I just last minute forgot and all right, I'm just going to..."
Lizzy: Yeah.
Lissa: But I've never had someone receive a gift card and be upset about it.
Lizzy: Right.
Lissa: People like to have choice in what they're going to use the gift card for.
Lizzy: Agreed. Yeah. One of the secret hacks in my family and my stepdad will always say if you don't know what to get him, because he's really hard to shop for because he just is not a materialistic person, is to get him a gas card. And that is something everyone needs. And no one really likes paying for gas. So to have that, it's actually a very utilitarian thing that's super practical.
Lissa: I love utility in a gift. I'm going to tell you that. I think about utility, how useful will it be to the person I'm giving it to? And if anyone ever gives me a useful gift...
Lizzy: Yeah.
Lissa: It kind of sounds backwards like, "Why would you give someone something that's not useful?" But as you said, what if you were being a minimalist and all your friends are giving you little tchotchkes?
Lizzy: Exactly, yeah.
Lissa: What are you going to do with them? I used to give you tchotchkes.
Lizzy: It might be useful to someone, but maybe it's not to you or whatever. And that gets hard as people get older or maybe it's age, maybe it's financial stability where you can buy the things that you want or need. It can be harder to know what to get people because they're like, if they want it, they will buy it for themselves. It's tricky.
Lissa: I have a funny side story. Again, not particular to birthday gifts, but Christmas gifts, but I think it's the same.
Lizzy: Yeah.
Lissa: My family does a Secret Santa for Christmas. And what it is, you draw names and so you get one other person's name and then you're responsible for giving them a gift. So instead of having to buy gifts for everyone, you just have to focus on that one person. And then we set a limit where it'll be like $40 minimum. We usually don't put a maximum, but there'll be a minimum. You have to spend at least this much because otherwise someone might get something super cheap. Then we send around our wish lists of things we've been wanting or needing, which first and foremost, I think it's great to have wish lists. It helps people with decision fatigue. They could just pick something off your list, but it kind of removes some of the magic of the surprise. But the interesting thing with these wish lists is over the years they've become more and more just gift card. Gift card to Target, gift card to one of my brother-in-laws loves Bass Pro Shops.
Lizzy: All right.
Lissa: Yeah, it's very specific. And again, this is a gift that they will love and enjoy because they can buy whatever they want with it, but then it's like we're just trading money now.
Lizzy: Yeah. Interesting.
Lissa: Isn't that funny?
Lizzy: Interesting.
Lissa: We're just trading money in the form of a gift card. It's not even as flexible as cash or money because you can't spend it anywhere.
Lizzy: Yeah. It's just targeted money.
Lissa: Yeah, it's targeted.
Lizzy: That's really funny.
Lissa: Yeah. But people love it. If you love a particular store, give me a Target gift card all day.
Lizzy: Oh my god, Target. That's I think the peak of gift cards.
Lissa: Yeah. Give me a Target gift card.
Lizzy: I'd actually rather have a Target gift card than an American Express.
Lissa: Yeah.
Lizzy: Because Target, then you get to have the magical experience yourself because it's free money. So you're like, "What am I going to find in this Target?"
Lissa: Yeah.
Lizzy: Yeah, that's up there.
Lissa: But that goes with, so I think gift cards is a mix of utility as well as just appealing to the gift recipient's values and wants.
Lizzy: Yeah, sure. I do think there is something to that where you're like, "I don't know exactly what I want, but I know I'm going to want something there at that store or I'm going to use it." And so that is something cool where you can months later maybe, depending on what it is, you're reliving that gift when you go use it.
Lissa: Yeah. I know you have a big family, you kind of alluded to, you don't have any set rules on when you give people gifts. It's like, have you seen them recently? But how does that apply specific to your-
Lizzy: Family?
Lissa: ... immediate family?
Lizzy: Yeah. My siblings and I don't do gifts for each other. I can't even remember the last time we did.
Lissa: And none of them give gifts to each other?
Lizzy: I don't think so, yeah. Sometimes my sister will send me flowers, which is really nice. And I think here and there I have sent gifts to them, but for the most part, no. Which is, funny note, my brother's longtime girlfriend, they've been together for 10 years. She gives gifts for everything and she gives nice gifts, really thoughtful, nice stuff. And so she'll give me gifts for my birthday, which is wonderful. She's lovely. But none of the other siblings do. Always for my parents. And then, well, I guess I should say my youngest brother, he and I will do stuff for each other usually. And he's the only one we do stuff for each other at Christmas.
Lissa: Why is that?
Lizzy: He's kind of like a second generation because he's step and we up separately-ish.
Lissa: Closer in age?
Lizzy: No.
Lissa: No?
Lizzy: But he's like my baby brother, and so he was a kid the longest. So as he was a kid, I would always buy him stuff. And then when he started making his own money or even before that, he would my parents, but he would get me something. And so we've just continued that and he's very generous. He bought my parents a TV for Christmas and surprised them. He enjoys that process, so we'll give each other cool stuff.
Lissa: Yeah, so weird. Similar to that, I have five siblings, one full sister, four half siblings.
Lizzy: Very similar, yeah.
Lissa: In total, I have three sisters, two brothers. The sisters, we all give each other stuff for birthdays. I don't bother with the brothers. I'll send them a text if I remember. And no, they don't care, no one gets offended, but I don't know how or why because it's not like I'm closer to them.
Lizzy: I think I was going to ask this, are women better?
Lissa: Yeah.
Lizzy: I think...
Lissa: In general.
Lizzy: I don't don't know if it's a maternal instinct or a way of just showing affection, female friendships and relationships tend to have more outward affection, I think, than male friendships. But yeah, most of the people, all the people I can think of in my life who are dedicated gift-givers are women.
Lissa: All right. Let's recap on the costs.
Lizzy: Yep.
Lissa: There's obviously the obvious financial cost. You're spending money to buy a birthday gift for someone.
Lizzy: Yep. Or time if you're making something.
Lissa: Or time.
Lizzy: But probably still on supplies or whatever.
Lissa: Right. And then we alluded to, I don't know how to categorize this as a cost. Is it like an emotional cost of potentially inflicting some...
Lizzy: Social costs?
Lissa: Yeah. Some negative emotion on the recipient for you might make them feel guilty or obligated. They'll feel obligated to have to return a gift. But are there any other costs to gifts or is it just nice? 90% of people enjoy them.
Lizzy: Yeah. I think, okay, so some kind of resources, time, money, energy, going into selecting one. That's a hard thing for me, what do I get people, I overthink it like crazy. So all of that, there is some emotional cost of like, "Are they going to like this?" And then do they, "Was their reaction sufficient?" That kind of thing. Social costs, if you make them uncomfortable, if they don't like it or they don't think it's enough, like you mentioned, that can happen. Or maybe you show up somewhere and you're the only one who didn't bring something, there can be some social costs. But overall, I don't think it's ridiculous in terms of the costs.
Lissa: Yeah, so financial probably is the biggest one.
Lizzy: I think so. Yeah.
Lissa: Yeah. So financial costs, interesting thing. This doesn't apply to the majority of us, but maybe someday it will. I never knew that there was a transfer tax, a gift and estate... Wait, estate taxes, gift tax. That if you give someone money over a specific amount, you have to pay taxes as the giver. The amount, I think, don't quote me on this, don't quote me on this, I should know this because I just took my CFP exam, but I believe for 2024 it's 17,000.
Lizzy: Okay.
Lissa: So if you were to give someone, if I was to give Liz $18,000 today, I'd have to pay taxes, gift tax on that 1,000 above the 17,000. I don't want to get too much into the nuance. You have a lifetime exclusion. So I technically wouldn't have to pay tax on it today until I've given over 13 million in my lifetime.
Lizzy: Yeah, okay.
Lissa: But it's interesting to think that when we're talking about small gifts here and there, it actually has a lot... This is a multi-trillion dollar industry to give gifts. So it moves the economy with all these smaller gifts, but super rich people who are giving money to people, there's financial costs to giving money to people as well.
Lizzy: Interesting, interesting.
Lissa: It's a very nuanced, small detail that, like I said, is not going to apply to most of us.
Lizzy: Right.
Lissa: Because I'm not handing out that much money to people.
Lizzy: Not yet.
Lissa: Not yet. But it comes into play, I think it comes into play when a parent wants to help their kid buy a house and they'll gift money.
Lizzy: Definitely.
Lissa: And they didn't know that there could potentially be gift tax. Most people won't have to pay gift tax because there is that lifetime exemption, but...
Lizzy: Yeah. Interesting.
Lissa: Isn't that interesting?
Lizzy: Very.
Lissa: You want to give a gift and you want to give money, but-
Lizzy: You can't do nothing.
Lissa: You can't do anything.
Lizzy: When you got that much money, everything costs money.
Lissa: Everything costs money. Giving gifts can cost money beyond just buying gifts.
Lizzy: That's crazy.
Lissa: Yeah.
Lizzy: Crazy.
Lissa: Very small detail that I didn't know prior to taking financial classes. I was so oblivious to it.
Lizzy: Why would you know that?
Lissa: Yeah, you wouldn't unless you have tons of money.
Lizzy: Interesting.
Lissa: Yeah. Well, 20 cents?
Lizzy: 20 cents.
Lissa: 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our 2 cents on today's topic, whether we think it is a net positive or net negative to give birthday gifts. To give?
Lizzy: Yeah, let's do give.
Lissa: Yeah. Let's do it on giving. Where does 20 cents come from?
Lizzy: You get the opinion of two dimes, y'all.
Lissa: The opinion of two dimes.
Lizzy: Dimes.
Lissa: All right. 60 seconds on the clock. Liz, you're up first. Are birthday gifts worth it? Is giving birthday gifts worth it?
Lizzy: All right, since we're focused on giving, I'm going to say yes, net positive. That sounds weird, that I would be questionable about receiving. I'd probably net positive on that too, but it is definitely a way that I show love and care for people. Maybe it's secretly selfish because I enjoy the process of doing it, especially if it's in an environment or a time in my life where I have time to be thoughtful or resources to come up with something cool. I think it's overall a positive thing worth the cost. And I also have to try to remind myself that the thought is what counts. So, you don't necessarily have to spend a lot of money to make someone feel special.
Lissa: A hundred percent.
Lizzy: A positive.
Lissa: Cool. Net positive.
Lizzy: All right, Lissa?
Lissa: Yeah.
Lizzy: Is giving birthday gifts worth it?
Lissa: I too am going to say net positive. I mentioned earlier in the episode, I am a gift giver with the nuance that I do think about my finances first. So old me would give gifts to every single friend, every birthday, every year. Now, if the budget won't allow it, then I actually think about picking and choosing or doing something smaller or just spending time with that person, texting them, editing a nice video IG reel for them, something thoughtful that might not require money if it comes to that. So yeah, I do prioritize the finances of it because I'd go broke. I have a lot of friends that I love and I would love to give everyone gifts every occasion, but I'm more thoughtful about it.
Lizzy: Love it.
Lissa: Yeah.
Lizzy: Great development.
Lissa: Cool. Yeah. So net positive for both of us on giving gifts. So be our friends and we might give you gifts. But remember, this is what we think right now in this moment in time. No one can make that decision but you. So, what do you think? Are birthday gifts worth it?
Lizzy: Hit us up. Let us know what you think. DM us on Instagram at netnetpodcast or email us at hi@netnetpodcast.com. And if you want to follow us individually, here's where you can find us.
Lissa: I'm at wealthforwomenofcolor on TikTok, YouTube, and Instagram.
Lizzy: And you can follow me at live_well_lizzy on Instagram and TikTok.
Lissa: All references, statistics and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and it should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.