Buying Gifts: It's a Skill You Can Improve!

Buying gifts can be difficult, but it doesn't have to be. In this episode Bridget Sullivan Mermel CFP(R) CPA and John Scherer CFP(R) discuss what research reveals about how to buy gifts.

Stop disappointing your loved ones. Improve your relationships. Figure out how to find happiness and meaning in the season. We talk about why gift giving can be difficult, as well as what to buy for people who don't want anything.

Find happiness and joy in the season and relieve your stress about what gifts can actually accomplish with a few simple tips.

TRANSCRIPT

Buying Gifts: It’s a Skill You Can Improve!

John: With holidays coming up, the pressure is on to give good gifts. It always stresses me out. I'm terrible at finding good gifts. But today on Friends Talk Financial Planning, we're going to talk about how you can make better decisions with your gift-giving.

Hi, I'm John Scherer. I run a fee-only financial planning practice in Middleton, Wisconsin.

Bridget: Hi, I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago, Illinois.

John, the connection between money and meaning and happiness is of a lot of interest to me, so that's how I got into researching gift-giving. And I’ve found that there's a lot of research on it, but there's not that much available that synthesizes it and actually gives people suggestions.

John: This is great. Like I said in the intro, I struggle. I've got a good idea for gifts, like once every 3 or 5 years. How do you do this? You've talked with me a little bit about the different... There's a lot of research that comes into it.

And there's actually some guidelines. Like, I'm excited to hear more about what, as I think about giving gifts, whether it's to my wife or to my friends or things, what are the best practices? What can you share with me?

Bridget: Well, I'm going to talk about, first of all, why it's hard. And I also want to say that I'm not perfect at this. So if you talk to my husband or other people that I give gifts to, I'm not a perfect gift-giver by any means. But I do know a lot about the research.

So one of the reasons why it's hard is because there's different… gifts are coming from different areas. So the areas of research are anthropology, because if you think about ancient cultures, people are gift-giving, and psychotherapy or psychology, because it definitely mirrors your relationships, and then there's marketing research, because whoever’s selling stuff realizes that gift-giving is a good way to sell more stuff. And so encouraging people to give stuff is a good way to do it.

And so there's a lot of different entry points into this conversation. So that's one of the reasons for the confusion about actually how to do it.

John: I think that's so useful for me in just hearing this is that I feel badly, like, “Oh, Geez, why can't I do better?” Well, there's all these different angles coming in. And it's sort of like, well, Jeez, it's surprising that.. it’s not surprising at all. It can be challenging to give gifts or to buy gifts that you feel good about.

Bridget: Yeah, absolutely. So the #1 tip that research shows over and over is going to seem basic to a lot of people. And we'll talk about why it's hard. So the #1 tip is: buy people gifts that they ask for. So buy people what they ask for. It sounds basic. But a lot of times we resist doing that.

And I think the #1 reason we resist it is because it sounds too easy. We think we need to try harder or do more work. But the research shows that people actually don't give us credit for the work we do with gift-giving in their own internal score card. They just think, “Do I like this gift?” When you give something to somebody that they ask for, it's like a mirror. Like, “You asked for something. That's important to me. So I'm going to give it to you.” That feels good to people. And sometimes they even give you more credit if they know it's something you don't want to buy.

John: That is so counter-intuitive, because as I think about buying presents for my wife, especially, I want to get something that shows that I know her, right? Or those sorts of things. And what I heard you just say is, well, “Show her that you're listening,” right? If he says, “I want this” and you would do this, that is being heard from the gift-receiver side of things.

What you just described, like, “It seems too easy,” like, “Make a list and then give them.” No, that is the thing. That is really powerful. It's so simple, right? Well, duh. And yet it's completely counter, at least to how I've thought about gift-giving.

Bridget: It just seems too easy.

John: Yeah.

Bridget: The other thing is: don't worry about price. People generally underestimate how much it costs and don't care if you got it on sale or didn't get it on sale. So if you can find something for the cheapest price and you like price shopping, go for it, do that. But don't think that the other person really gives you credit for it. Or don't think that they care. They care “I got what I asked for,” not about all this other stuff, about how you got it.

John: Like I said, that's really powerful, for me anyway. It’s hearing that, not that I've got to think about the thing that somebody wants, but ask them what they want, find out, and give them the thing that they want. What about…? So here's an example, as I think in the other foot, my wife, or somebody that… “Well, what do you want?” “I don't know. I don't need anything.” If I say nothing, which is an honest answer in a lot of cases, then what?

Bridget: Safe gift. So then you are in maintenance territory. So realize that a lot of gifts are maintenance gifts. You're just trying to maintain your relationship, and there's socially accepted gift-giving occasions. So you've reached a socially gift-giving occasion, and the person doesn't want anything. So don't feel afraid of giving a safe maintenance gift.

Most gifts are maintenance gifts. Most gifts are not risk gifts, or trying to improve the relationship. Most are just safe. It's okay to get a safe gift.

John: Interesting. So it's just maintaining the relationship. You know, I never thought about this in terms of those… It's just sort of like what we do, right? I’d never thought about it in terms of maintaining the relationship with a spouse, with friends, those sorts of things. When you say safe versus risk, can you give an example? What does a “safe gift” mean? I'm trying to even think about that.

Bridget: Something you know she likes. So for a spouse, you know she goes to a certain place to get her haircut. I'm using haircut, which isn't necessarily the greatest gift idea right now.

John: In today's… but hey, be sensitive! Talking to people like me about haircuts, that's a little bit folically insensitive.

Bridget: Give her a gift certificate for something she likes.

John: Yeah. Okay.

Bridget: You know, she likes books.

John: A restaurant, a favorite restaurant. that sort of thing?

Bridget: Right.

John: Okay, Yeah.

Bridget: Yeah. And don't be afraid to give somebody… So we get into the notion of experience gifts. Don't be afraid to give somebody an experience gift that they're going to use for somebody else. You can go have a girls night out with your friends. And here's a way to facilitate that.

John: Oh, interesting.

Bridget: Yeah. Sop you still get credit even if they do it with somebody else.

John: One thing, I don’t know, I wonder if the research shows any of this, but one of the things that you described, experience gifts, or we call “consumable.” I go out to a restaurant, or… like having stuff, we don't need any more stuff. That's one of the issues. But having those experiences, it doesn't pile up the stuff, and it can be some of those meaningful things. Is that, if that feels good as you describe it.

Bridget: Meaningful and happiness. Yeah. A higher happiness, higher meaning.

And the other thing is that people don't ask for experiences, they ask for stuff. But people enjoy experiences more. So again, if you know that there's an experience they like, or maybe your next vacation, you know, you always go somewhere. You've got a cabin. Play something that the person likes to do at the cabin. That might be a good gift. Something along those lines.

So think about what the person likes to do: working out, going on trips. I have fish. I just got fish. So I'm asking for stuff for my fish. If they don't ask for anything and you've got to brainstorm, try to think, “Okay, what do they like and then get them something in that realm.”

John: It sounds kind of like, as I hear you say that, that: give them what they want. That's the #1. And then a safe gift. If you're going to do some reaching, the safe gift. But it's something you know that they like. They like playing golf. They like these kind of restaurants. Then some creativity could come within that safe realm, right?

So it's either “Give them what they want” is a safe gift, or “Give them something you know that they're going to like,” is also safe. But you can be more creative if that's of interest to you.

Bridget: Right.

John: Yeah. Okay.

Bridget: Another thing. Sometimes people are hard because they're really downsizing. So, like, older people.

John: Yeah. Right.

Bridget: So a good thing there is like, what they call “role gifts.” That's where you get the “best grandpa” mug. That kind of thing, so something that celebrates the person's role in your life is a nice, safe gift for somebody who really doesn't want stuff.

John: Yeah. I know we've seen some of those. You get the coffee mugs with the picture of the grandkids, or that sort of thing that's got that tie-in, that's great.

Bridget: Right. A great idea for grandparents is like, pictures of grandkids, and actually for your spouse, too. Pictures of yourself. Who wants to take pictures or do that? But spouses actually like that.

John: Yeah, that's great. This is so helpful. It sounds like such a simple basic thing, right? Everybody in some fashion likely gives gifts. But there's a lot of psychology, a lot of emotions and expectations, and maybe it sounds like things that we set on ourselves that make this more difficult perhaps than it really needs to be.

Bridget: Well, yeah. It's an opportunity in a relationship sometimes to do more, but it's also just to maintain it. And it's like something we know we need to spend some money on at this time of year, and so there is research and science that tries to help us do it better. But again, it's kind of hard to access because of these different disciplines that it’s in. But still, here you go. That's why I like talking about it.

John: That's great. And I know before we got on the line here, you had talked a little bit about that this relates to giving gifts to peers. But like kids, giving gifts to kids, that's a separate issue.

Bridget: A separate topic. Well, but still giving them what they want is a good idea. Like we talked about “A Christmas Story” and how Ralphie wants a BB gun. And nobody wants to give it to him because it's going to take his eye out. And then his dad breaks down and gets it for him and gives it to him with much celebration. And then through a series of incidents, he thinks he has taken his eye out like everybody predicted. But even then, he goes to bed at night thinking, “This is the best gift I've ever gotten and will ever get.” And like, he asked specifically for that. Got that.

John: Exactly what he asked for! Exactly right. It wasn't creative. It wasn't coming up with something. It was, “Here's what I asked for. Here's what I got.” And like so many things, it's sort of those simple… go back to when we were kids, right? Like, we can make it so complicated.

Bridget: And they didn’t want to get it for him.

John: And they didn't want to, right, so you get extra credit. You said before, Bridget, you don't get credit for being creative. But you do get credit if the person…

Bridget: If they ask for something you really don’t want to give them.

John: They know you don't want it, and you get it anyway. That's when you get credit, and that's super useful. That's great. And wrapping up with that movie. That's awesome that you put your eye out. And it was like “The best gift I've ever gotten.” That's fantastic.

Bridget: Yeah, it's a case study in gift-giving.

John: So this is maybe a good spot to wrap up and kind of circle back on things. I think it's pretty straightforward, but the things that I heard from the conversation and the research is: give people what they want. And if you can't do that, then give a safe gift, some basic.

Bridget: And if you don't know, ask!

John: Right! It's like so much in our financial planning world. It's not complicated, but it's also not easy to do. And we don't often know what to do. So this has been really helpful. Anything else that you wanted to add in addition to those two fundamentals?

Bridget: Have a great holiday. Please, everybody, be safe. And I really appreciate and am grateful for the gift of being able to do this YouTube show.

John: Yeah. This is great. I really appreciate this. It’s been one of the highlights of my week every week when we do these recordings. And as we always wrap up that if you're interested in this sort of planning… and where else -- I was thinking about this -- where else? What other financial advisors talk about the gift-giving and the meaning and those things, that holistic approach? It's not just about investments. And it's not just about insurance. Bridget and I are both members of the Alliance of Comprehensive Planners we have advisors all across the country. You can look us up at acplanners.org to find somebody else in your area that might be able to help you if you're interested in things like this.

Bridget: And don't forget to subscribe!

John: Don't forget! I always forget that one. Don't forget to subscribe to this channel if you find this interesting. The more subscribers we have, the higher up we go in the rankings, and the more other people can find us. And that can be a gift in itself. So with that, until next time!

At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.