Before you go spend a bunch of money on Christmas gifts or, God forbid, take out big loans to buy gifts that you can’t afford, please do me a favor.
It’s a simple favor.
Ask your children (or grandchildren) what they received for Christmas last year.
Most won’t have a clue.
I know because I asked my kids this morning.
My four-year-old couldn’t remember a single gift that he received on Christmas last year. And my six-year-old, who’s sharp as a tack, could only recall the presents that she received from Santa Claus.
The gifts from poor old mom and dad weren’t special enough to make it into the long-term memory bank.
Don’t get me wrong, I totally understand how wonderful Christmas morning is…
Little feet pitter-pattering down the stairs, and seeing the immense joy on their faces, knowing that Saint Nick came to visit. If I could bottle that joy and sell it, I’d be the world’s first trillionaire.
As parents (or grandparents), those are the moments we live for. And, therefore, many families will spare no expense to bring Christmas magic to life.
But remember, it’s not the gifts that make the magic. It’s the special moments, the anticipation, the traditions, and ultimately, the togetherness that make Christmas unique for both children and parents alike.
Now, ask your kids another question…
What Kids Remember
Ask them where you went on your last vacation. Even if it was just a weekend camping trip, ask them.
They’ll spit out that location and all the things you did in a heartbeat. They’ll remember every small part of that trip that you’ve already forgotten.
Once again, I know because I tried it on my own kids.
Why is that?
Once again, togetherness.
Kids crave attention. They crave your touch. And, more than anything, they want to feel loved.
And no matter how hard we might try – and no matter what the commercials on television might try to say this time of the year – there’s nothing that we can wrap up with a bow that truly implies love. Only your time, energy, and attentive presence can do that.
Last year, a CNBC study showed that 36% of Americans took on debt – nearly $1,200, on average – to pay for holiday gifts.
This year, that figure is expected to creep higher, with expectations of roughly half of all Americans using debt to finance Christmas joy.
That’s so terrible to hear.
As someone who relies on the wonder of compounding to generate passive income, to consistently beat the market, and as the foundation of his strategy to achieve financial freedom, it pains me to see so many people falling into debt traps. After all, interest payments on that debt are the anticompounder.
The fact of the matter is, if you’re paying off high-interest debt, you’re making someone else rich at the expense of your own financial freedom.
The average credit-card interest rate in December 2025 is in the 22% to 24% range. That’s a death sentence to dreams of early retirement, or even financial dignity, if they’re not paid off ASAP.
So, instead of becoming a statistic this holiday season, I beg you, please ignore “the Joneses” and live below your means this year.
Instead of a big, tacky gift that is likely to be forgotten, give your kids an experience they’ll never forget.
Buy Your Time
Play with your kids. Build a blanket fort and watch a movie together. Drive around with a mug of hot chocolate, looking at Christmas lights. If you’re brave enough, take the family caroling and belt out the holiday classics. I promise you, that’s a tradition that they’ll never forget.
There are plenty of ways to make magic this holiday season without breaking the bank. And don’t get downhearted about the prospects of a low-budget Christmas production this year, because if this seems right for you, you’re certainly not alone.
A recent study from Goldman Sachs showed that 41% of Americans making $300,000 to $500,000 are living paycheck to paycheck. What’s more, 40% of people making $500,000-plus also fall into this category.
As crazy as that sounds (and it does sound crazy), a lot of these high earners feel as if they’re poor. Obviously, they’re not. They’re extremely fortunate and fall into the top 1% of income earners.
But, because of lifestyle creep, they’re not able to save money. They end up feeling the same stress about holiday spending and retirement prospects as the rest of the 99%.
I’ve seen recent studies showing similar data regarding people who get big bonuses or raises. Despite more money, their savings rate, and therefore, their net worth, do not significantly increase.
Why?
Once again, lifestyle creep.
They go buy a nicer car. A bigger house. They put their kids in private school. They only eat at the nicest restaurants in town and begin to take lavish vacations.
That’s the expectation, right?
What else should a high-income earner do with their paychecks?
Surely, they couldn’t keep living the same life they had before and invest the rest. That’s certainly not what Mr. and Mrs. Jones are doing next door.
You get the drift…
Societal expectations, materialism, peer pressure, and the worst parts of human nature (namely, greed) inspire us to make poor financial decisions all of the time.
But truly, it’s not hard to become wealthy. I’ve said it a thousand times. All you have to do is live below your means, consistently invest your savings into high-quality dividend growth stocks, and hold them over the long term. Let reinvested dividends and compound interest work in your favor.
The problem with this plan is that it’s not flashy. Heck, it’s boring.
But the world nearly always rewards consistently over sporadic brilliance. And luck is not a plan.
Don’t let Christmastime be another reason, another excuse, as to why you’re on the wrong financial path.
I write all of this because I know this can be a tough time of the year for a lot of people. That’s especially the case when inflation is on the rise. 2025 has also been a year of record layoffs, with more than 1 million job cuts having been announced by the start of December.
And I know there’s a lot of uncertainty, and therefore anxiety, surrounding paychecks, with artificial intelligence threatening to replace more and more human workers.
So, if you were on the fence about overspending, I hope this essay finds you and gives you peace – and maybe even hope – for a wonderful holiday season, no matter how big or little your holiday budget is.
The most valuable resource that we all have is time. Whether you believe it or not, that’s what your kids want most. So, give it to them, and make sure they know just how precious it is.
Use the money you’re saving to buy more of it. That’s what financial freedom is – more of your time delivered back to you. Your loved ones will appreciate it more than you know.
And please know that we at Wide Moat Research are here to help you along the way.
May your days be merry and bright,
Nick Ward
Analyst, Wide Moat Research
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