Best value at Christ­mas

Marlborough Express - The Saturday Express, Marlborough - - YOUR LOCAL NEWS - ROB STOCK

I’m go­ing to tell you how to make Christ­mas great, and get more value from ev­ery dol­lar you spend on it.

Christ­mas is an un­al­loyed joy for very few peo­ple.

Each of us knows what we like, and don’t like about it.

And yet, we seem in­ca­pable of ditch­ing the stuff we dis­like, and only do­ing the stuff we love.

Here’s my list of happy things on Christ­mas Eve/Day: Cook a turkey, ice a cake with the kids, play board games, set fire to a Christ­mas pud­ding I made last year, eat at least two home-made mince pies, have rel­a­tives to stay, put up a real Christ­mas tree.

But, oh, if Christ­mas could end there.

What gets a lot of peo­ple down about Christ­mas is the fi­nan­cial pres­sure, es­pe­cially around buy­ing presents.

I firmly be­lieve that if the whole na­tion de­cided to spend half as much on presents, and re­fo­cus Christ­mas spend­ing on hav­ing a nice day, we’d all ex­pe­ri­ence a hap­pi­ness lift. Keep presents mod­est Spend on ex­pe­ri­ences for hap­pi­ness

Never bor­row to buy presents

Giv­ing is an ex­pres­sion of love, but sci­ence clearly demon­strates that spend­ing on ex­pe­ri­ences (like a nice fam­ily Christ­mas meal) brings more hap­pi­ness than spend­ing on things.

And re­tain­ing more money, while own­ing fewer things, also cre­ates hap­pi­ness.

A lack of emer­gency sav­ing is a ma­jor nerve-racker for many peo­ple.

Re­search shows hav­ing a de­cent emer­gency fund makes peo­ple feel more se­cure, and hap­pier.

Go­ing into debt for Christ­mas will have the op­po­site ef­fect on a per­son’s hap­pi­ness.

When it comes to Christ­mas presents, fo­cus­ing your spend­ing is a good idea.

First, con­sider leav­ing the adults out.

Grown-ups can af­ford to buy the things they need.

If I man­age to fi­nally get no presents this year (I have asked ev­ery­one not to bother), I won’t be dis­ap­pointed.

If you have to buy adults a present, the hap­pi­ness rule of spend­ing im­plies you should buy them an ex­pe­ri­ence.

Sec­ond, if you buy presents for the chil­dren, fo­cus on qual­ity over num­ber. There is a very clear law in eco­nomics of di­min­ish­ing re­turns when it comes to wealth.

An econ­o­mist (Al­fred Mar­shall, 1890) might ex­press it like this: ‘‘The ad­di­tional ben­e­fit a per­son de­rives from a given in­crease of his stock of a thing di­min­ishes with ev­ery in­crease in the stock that he al­ready has.’’

At Christ­mas, par­ents should ex­pect a de­creas­ing amount of ex­tra hap­pi­ness for each new gift pushed their chil­dren’s way.

Economists have also iden­ti­fied some­thing that will come as no sur­prise to any­one.

A large pro­por­tion of Christ­mas presents are ba­si­cally un­wanted.

Be­ing economists, they had a fancy term for it. They called it the ‘‘dead­weight loss’’ of Christ­mas presents.

This was the pro­por­tion of money spend on Christ­mas presents that was wasted on stuff that was not wanted. It could be as high as a third. It’s an­other rea­son to buy less, but to buy bet­ter.

Giv­ing is love but ex­pe­ri­ences, not things, make peo­ple hap­pi­est.

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