If Bing Crosby was around today, he might be singing, “I’ll Be Broke for Christmas.” A recession is not exactly the cheeriest time in which to celebrate the holidays.
A report by the International Council of Shopping Centers, or ICSC, found that year-over-year sales at U.S. retail chains fell 0.9 percent in October, and predicted an abysmal holiday shopping season. “ICSC Research is now paring its holiday forecast to the low end of our forecast range,” said Michael P. Niemira, ICSC chief economist and director of research.
There’s no doubt that many Americans will be looking at drastically reduced holiday budgets — and for gifts that are more practical and affordable than the iPhones and Wiis of yesteryear.
“I think people are re-evaluating their spending and credit usage over the holidays,” says Jennifer Melnick Carota, author The Gift Therapist blog and the book “Shop Smart Give More.” “They’re basically riding out the storm.”
But take heart. Just because you won’t be blowing a Santa bag full of cash doesn’t mean that Christmas has to be a dreary affair. “I’m confident that the current economic situation will not adversely affect the giving season,” says Carota. “People will become more creative and frugal with their giving dollars.”
In that spirit, here are 12 recession-proof ways to use your ingenuity and know-how to boot the bad-economy Grinch out of your holidays and spread some serious holiday cheer.
1. Movies. A lot of people on your list may be feeling the pinch when it comes to entertainment. Whether they’ve had to cut out premium TV channels or trips to the movie theater, giving them a little movie magic might be just the ticket. Two major online movie services, Netflix and Blockbuster, offer gift subscriptions that will keep recipients in movies for months.
Low-cost alternative: Head to Fandango.com and buy a gift certificate good for theaters across the country. “Experiential gifts, like movie passes or museum passes, will be big this season,” says Carota.
2. Energy. That lump of coal you got for being on the naughty list might be looking pretty nice to you now after a year of inflated energy prices. Gas gift cards or an oil change will help ease the pain at the pump this holiday season.
Low-cost alternative: A tire-pressure gauge as a stocking stuffer can help maintain peak fuel economy.
3. Coffee. As anyone who owns stock in Starbucks knows, a lot of people have been giving up their morning lattes to save cash. You can help your loved ones regain that “java de vivre” with a gift card to their favorite coffee shop. Or enable them to make a high-quality cup of joe at home with a coffee grinder or an espresso machine. A serviceable espresso machine from Mr. Coffee and other reputable brands costs $50 or less.
Low-cost alternative: A bag of tasty gourmet coffee beans.
4. Food. Many Americans’ diets have suffered as the price of good, fresh food has risen, both in restaurants and on the grocery-store shelves. For those who’ve cut back on dining out, a gift certificate to their favorite restaurant may be in order. Gift cards for restaurants are projected to be the top type of gift card this holiday season, according to a survey by the Archstone Consulting. For foodies and cooks on your list, a grocery-store gift card or a rockin’ recipe book may be just the right holiday treat.
Low-cost alternative: A few of your own home-cooked specialties, either in the form of entrees or desserts, frozen and nicely packaged, will fill recipients with holiday cheer. “People are returning to basics like gifts from the kitchen,” says Carota. “You can jazz them up by giving it to them in a new container or something practical that the hostess can keep.”
5. The spa treatment. One of the first creature comforts to go when the budget ax comes down is that regular trip to the spa. “We’re seeing a lot more weakness in more discretionary services like massages and facials — things women view as maybe not necessarily essential and more of a luxury item,” says Brad Masterson, public relations director for the Professional Beauty Association. Don’t let your loved one go unpampered — buck the trend and get her an hour at her favorite spa or a massage therapist.
Low-cost alternative: Gift certificates for manicures and pedicures make perfect, inexpensive presents.
6. Financial peace of mind. Help take the edge off the anxiety about today’s wildly oscillating financial markets with a paid appointment to a fee-only financial planner. Making a plan for how to deal with today’s financial challenges will help your loved one stop worrying and start enjoying the holidays.
Low-cost alternative: A classic personal finance primer like “The Total Money Makeover” by Dave Ramsey can help put the recipient on a road to financial well-being.
7. A ‘new’ car. Many are trying to draw out the lives of their autos just one year longer as car loans get more scarce and budgets tighten. Kidnap a loved one’s car for a makeover at your local auto detailer to help them get a whiff of that new-car smell without the new-car payments.
Low-cost alternative: Give a hand-written gift certificate promising one free homemade car detailing.
8. Wealth builders. As you know from watching the news lately, stocks and other investment vehicles are cheap. Use this to your advantage by giving blue-chip stocks as gifts. Shares of blue-chip titans like General Electric, Microsoft and Bank of America are down to the point where they make relatively inexpensive gifts. For younger giftees, consider opening a high-yield savings account with a few dollars and introduce them to the joys of compounding interest. Who knows? Your gift could be multiplied many times over when America’s financial ship finally rights itself.
Low-cost alternative: A brand new piggy bank half-full of change is one way to jump-start a young saver’s nest egg.
9. Sell the house. If the loved one on your list is one of the many Americans looking to sell a home, help them out. A professional home-staging job can make their home stand out big time. While not cheap, this is sure to be a memorable gift and one that could pay huge dividends for the recipient.
Low-cost alternative: Realtor lore has it that a statue of St. Joseph buried upside down near a For Sale sign (or in one of many other configurations) will speed a sale. These figurines are widely available at religious book stores or can even be bought as part of “Home Seller” kits offered by many online retailers.
10. A ‘new’ home. For those “upside down” in their homes, moving into a new place may seem like a dream deferred until house prices recover. That’s where you come in. If the recipient’s reason for moving was space, hire a professional organizer (this makes a great “group gift”) to go through their home and help them make it more space efficient and livable. Ever see the show “Clean Sweep”? You get the idea.
Low-cost alternative: Roll up your sleeves and volunteer your time as an “amateur organizer.” A homemade gift certificate shows you’re committed.
11. Health. With health care costs perpetually rising, good health is more valuable than ever. A gentle push in the form of a three-month, all-expense-paid membership to a gym or a nice pair of athletic shoes may be just the thing to part that special couch potato from his or her couch. For those on your list who have little workout experience, a session with a personal trainer will help them learn the exercises and establish a regimen that will work for them.
Low-cost alternative: Find a schedule of free or low-cost exercise classes offered by community centers or other nonprofit or government agencies in your area and pledge to go with them. After all, a little fitness does everyone good.
12. A ‘new’ wardrobe. While many of us would love to go on a big-ticket shopping spree, the fact is, Americans are spending less on clothing. The U.S. Census Bureau reported that clothing sales fell $443 million, or just over 2 percent, from August to September as the economic crisis deepened. Instead of giving your loved ones a single shirt or pair of pants, you can give their whole wardrobe a makeover: Raid their closets and head straight for the cleaners. (Be sure to point out any particularly troublesome stains to the cleaners.) Or you can plunder your giftee’s shoe rack and take a few pairs in for a professional reconditioning at your local shoe repair store, which will have them looking great and remind their owner why they bought them in the first place.
Low-cost alternative: Take your loved one out for a thrift-store shopping spree. You’ll have a blast and probably find more wearable duds than you expect.
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NEW YORK–Andrea Reynolds, a mother of four young children in southern Louisiana, can’t remember the last time she bought a dress. She also can’t remember her last vacation ? unless, she quips, you count those three weeks in a hotel fleeing Hurricane Rita in 2005.
But like many parents, Reynolds will curtail her own luxuries way before she’ll cut back for her kids ? be it for new school clothes or afterschool activities. “I’d give up eating out with friends if it meant my kids couldn’t do Boy Scouts,” Reynolds says. “It’s a no-brainer.”
Are kids recession-proof? Perhaps not, but some consumer analysts call them “recession-resistant.” As Americans struggle through a tough economy, spending on kids is often the last thing to go, for reasons both practical and emotional.
“Some people will cut their medications before they’ll cut spending on the kids,” says Candace Corlett, president of the consulting firm WSL Strategic Retail. She says her group’s research shows 39 percent of adults ? parents and non-parents ? plan to cut back on adult gifts this holiday season, so kids in their lives can have more.
“That’s a lot of cashmere sweaters that aren’t gonna get bought,” says Corlett.
Forget cashmere ? Sheri Donner can’t even recall the last time she bought a book, though she’s an avid reader.
“I’d just rather cut for me than for someone else,” says Donner, a Michigan mother of two. When the family had to cancel one of their three cell phone contracts, they canceled Sheri’s, not that of her 23-year-old daughter, who needs the free incoming calls to stay in touch with her boyfriend out of state.
Yet Donner has cut back on some things for her daughter, who lives at home while she attends college. Each semester the two used to go clothes shopping. “Now we go through old clothes and see what’s serviceable,” she says. “I really feel bad because she doesn’t ask for a lot. We’ve never had to do this before.”
With older kids, at least there’s the opportunity to have a serious discussion about the economic crisis, and why sacrifices might be necessary. With small kids, it’s a lot tougher to explain why that shiny new toy is suddenly out of reach.
“Every time we walk into a store, it’s, ‘Can we have this? Can we have that?’” sighs Rebecca Bailey, the mother of four small boys in Landolakes, Fla. “That toy, that movie. I try to teach them that we don’t get everything we see.”
Bailey hasn’t cut back on basics like new clothes for the kids, all age 6 and under. “I want them to look nice and well cared for,” she says. So do many parents: Kohl’s and Wal-Mart reported that one of their few strengths in September was in children’s clothing. Kohl’s noted that purchases are “need-based” and Wal-Mart said customers were “looking for basics for their families,” while discretionary purchases were soft.
In the words of Susan Kane, editor of Parenting magazine, “Moms are becoming more whine-prooof.” And they have to, she says, no matter their economic status. Kane herself is dressing her young kids in hand-me-downs, and her own family vacation this year? “A stay-cation,” she notes ruefully.
In Manhattan, where affluent families often pack their kids’ schedules with activities of every conceivable sort, Emile Mosseri, who teaches private guitar, bass and piano lessons, sees evidence of some parents cutting back.
“Usually in September everyone starts up again,” says Mosseri, who charges $60 to $80 per lesson to subsidize his other vocation ? playing in a rock band. “This year I’ve lost five out of 16 students. People will say, ‘I think we need to hold off for a little while.’”
Some think “holding off” ? especially when it comes to material goods for young kids ? could be a great thing for families, and not just for their wallets. Peggy Sradnick, who runs a daycare center in Manhattan and has been an early childhood educator for 37 years, decries a culture that has made American kids consumers before they can even write their names.
“Kids can be so overindulged,” she says. A period of economic sacrifice, she says, “can only be a good thing. If people could just step back and ask, ‘Does my child really need 10 of these American Girl dolls?’ ‘Do one-year-olds need four pairs of shoes?’”
But clearly American Girl dolls and lots of other highly popular toys will still be in demand this holiday season. “Santa’s still gonna fly this year,” says Chris Byrne, a New York-based toy consultant. What will probably suffer, he says, is the unplanned purchase, the impulse toy.
Corlett, the consumer analyst, said that in her marketing survey, about half of parents, 48 percent, said they’d be spending less on their kids this season.
One of them is probably Donner, the Michigan mother. She and her husband used to spend several thousand dollars on holiday gifts. “Now we’ll be lucky if we can come up with $500,” she says. For her, the issue isn’t the losses in the stock market ? her family doesn’t have investments ? but high prices. “Things seem to cost four times as much” as when they had their first baby, she said.
In the upscale New York suburb of Weston, Conn., Debbie Merberg recently blanched when she saw the latest statement of the family’s investments. “This is their college money,” she thought of her two kids, a 15-year-old son and a 12-year-old daughter.
For now, the family hasn’t had to make any real sacrifices. Still, Merberg wants her kids to understand what’s happening. When her daughter coveted a $110 pair of sneakers, Merberg decided it wasn’t going to happen. “Maybe at an earlier time, I would have said, ‘OK, it’s a treat,’” she says. Not now.
There’s nothing important her kids have gone without. “But if push came to shove, I’d give up for myself first,” says Merberg. “I’d rather do without than have them do without.” (more…)
