The Secret Santa Hack – Save thousands this year with this one gift giving hack

Why are the holidays so darn stressful?

You'd think that having a few days off, spending time with family and friends, and stuffing yourself full of food and drink would be awesome, right? πŸ™‚

It is and it isn't.

It isn't that awesome because of the stress surrounding the holidays. These are stresses you don't get other times of the year — mainly, the gifts.

Gifts can get expensive and you never want to leave someone out.

If you are stressed about the cost of the holidays, I have a little hack you can try this year.

Switch from one-to-one gift giving to a Secret Santa style gifting tradition.

I learned this tip from a friend who comes from a huge family. He has five sets of aunts and uncles and his wife has two sets of aunts and uncles. Then you have cousins, their kids, … you get the picture. It's a lot of gifts.

For years, they got everyone gifts. Even if you limited them to $50 a gift, you were still talking over a thousand dollars in gifts!

But back then, they were dual income, no kids. Spending that much wasn't a big deal.

Then my friend had a baby, realized this enormous budget line item that only popped up once a year, and the gears started turning. What could he do? Even if they transitioned to one gift per pair it was still over five hundred dollars a year in gifts. You can buy a lot of diapers with that money!

That's when he borrowed something from his workplace… he floated the idea of a Secret Santa to his family. They loved it.

Why a Secret Santa Works

You capture all of the gift giving feeling at a fraction of the stress and cost. Thinking about what to buy a billion different people is stressful. Thinking about what to buy one person is less stressful.

There's a bit of mystery, since you don't know who has you, and mysteries are fun. Who do you have as your Secret Santa? Who do you think has you? It's a mystery that will last a few weeks and those are always fun.

It doesn't take away anything from the gift giving event itself. Part of the fun of gifts is in the anticipation. With a Secret Santa, you get the anticipation of the mystery but then you also have an “event” during your gathering. People give gifts, there's the excitement of learning who has you plus what you actually received.

A $100 gift is better than five $20 gifts. The universe of awesome $20 gifts is small. The universe of awesome $100 gifts is much bigger. Wouldn't you rather get one $100 gift, purchased by someone who was focused on buying just one $100 gift and not five $20 gifts? πŸ™‚

How to Have a Successful Secret Santa

Secret Santa is easy and has just a handful of “rules.”

  1. Find out everyone involved and create a pool of names to draw from or assign them yourself.
  2. Tell everyone who they are Secret Santa to (i.e. who they have to buy a gift for).
  3. Set a gift dollar amount limit.
  4. Pick a date to give out gifts.

If not everyone will be in the same place for the drawing, you can always use online generators (I found this one but I've never used it) to facilitate the selection process.

Boom – that's it! There's nothing more to it.

How to Make the Transition

If I've convinced you of how easy it is to run and why it works well, you might be worried about the transition. Don't be.

It's easy – just start asking your friends/family if they'd be open to trying a Secret Santa this year, instead of the free-for-all of buying gifts for everyone? If there's some hesitation, suggest that they just give it a test run this year? You can bring up the reasons above but chances are you won't.

I've asked my friends, several of which have done this with their adult age cousins, and not only has no one ever been offended but they've had a 100% success rate. Several told me it's helped them get closer to their cousins, who live across the country, because they have to learn about their hobbies, likes, and dislikes to buy a better gift.

Give it a whirl!

(image: kawaiikiri)

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About Jim Wang

Jim Wang is a thirty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

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  1. Cat@BudgetBlonde says

    Secret Santa is a great way to save money on giving gifts. I’ve also done things like a $5 (or other limit) gift exchange. Everyone brings a gift of that value and everyone gets a gift of that value by playing a game.

  2. Kalie @ Pretend to Be Poor says

    My family of five kids instituted a Secret Santa early on, probably when we got sick of each other’s chintzy homemade gifts. The tradition has followed us into adulthood, and my husband’s family has adopted it for the sibs and spouses as well. It’s a great way to get 1 better quality gift, as you mentioned, and streamlines shopping while including everyone.

  3. Natalie @ Financegirl says

    I love the idea of a Secret Santa! For some reason, we haven’t gotten into it in my family, but I think as the grandkids (me) start to have kids and our families grow, that will be the way we go. I think it’s better for everyone!

    • Jim says

      There’s a tipping point somewhere in like the 8-10 gifts range where people start thinking… there might be a better way. I don’t know if it’s when you get 8-10 not so awesome gifts and think there might be a better way or when you spend money on 8-10 not so awesome gifts. πŸ™‚

  4. Stefanie @ The Broke and Beautiful Life says

    I’m good with friends and family secret santa, but I like to opt out if its a workplace affair. I see people get so stressed out about it and overspending on junk. It’s hard when you don’t know someone as well. You just go for generic candy and trinkets, which isn’t a major value add.

    • Jim says

      Yes, I think the office gift giving thing can be a little silly. I suppose I am lucky now that I work for myself so I never have to deal with it anymore. πŸ™‚

  5. Alyssa @ GenerationYRA says

    Yes! I love the Secret Santa exchange! Just last year my fiancΓ© & I suggested that we try for both sides of our family and it was our first test run. Everyone loved it! It made it such a more smooth process & everyone felt gratitude to have a break on their wallets. It also allowed for everyone to put that much more focus & thoughtfulness into the gift they were giving to their Secret Santa. This year will be our second year, and I think it will be even better than the last. No one is in a scramble or stressing to purchase several gifts. More time to focus on spending time with one another. πŸ™‚

  6. Taylor says

    Secret Santa is the BEST! My sorority did this when I was college and it was always amazing. (I think our limit was something like $10) It’s so nice to be surprised and have a gift that was especially picked out for you. It also helps you to appreciate the gift more! I only spend about $20 per person during Christmas but end up having to buy 10+ gifts, so even if you’re not spending much per gift, it can still adds up super fast!

    I’m going to be with my in-laws this Christmas but will definitely be suggesting this to my immediate family next year πŸ™‚ I think it would be really fun and definitely relieve some of the stress.

    • Jim says

      You can try suggesting it when you get together this year, I’d be curious to hear another “transition” story. πŸ™‚

  7. Mrs. Goovy says

    Fun stuff Jim. We do a grab bag with gifts $25 and under. We pick numbers and allow “stealing” which is a blast. One year my MIL bought a $25 near replica of a small painting our spendy cousin bought for $5K while on vacation. Everyone wanted that.

    • Jim says

      The replica joke is hilarious… I’ve gone into so many of those resort art galleries. The art is beautiful but I was always struck by the prices. Who in the world has $5,000 to spend on a thing to hang on the wall? And are there so many of those folks that you could run a store? I went to a place that had the most awesome Disney art, and Winnie the Pooh, it was really tempting until I looked at the price tags in the place.

      As for stealing — so stealing is a mixed back. It depends a lot on the personalities involved, some people get really really protective. It sounds like you have a fun family considering someone trolled someone else. πŸ™‚

      • Mrs. Groovy says

        Yep the stealing gives it a twist, but an item can only be stolen twice, according to our rules. But all bets are off when it comes to Mr. G’s 96 yr old grandma. If she picks something she likes, like a kitchen item, she practically shoves it under the sofa to keep anyone from stealing it. We wouldn’t dare, or she might slap us!

        • Jim says

          We have a Secret Santa with friends where we do this, we don’t have the stolen twice rule. πŸ™‚

          When you’re 96, you get whatever the heck you want.

  8. Chris Peach says

    Jim,

    I love it! We started doing this in 2011 because we were broke and trying to get out of debt. When we told the family, people were shocked that we could be so cheap! Then slowly one by one the family started thinking, “Hell, this is actually pretty cool (and affordable).” We drew names yesterday and I got my Dad. Wonder who has me? πŸ™‚

    • Jim says

      It’s hard to be the first but everyone always comes around… what’s not to like about trimming a bunch of names off your list without any of the emotional pain? πŸ™‚

  9. B. Kavanagh says

    The family adults go down the list by birthday year and then back to the top again. I really like knowing who I’m shopping for. Being able to spend the year thinking about that person. Noticing what they like and are into. The other way is to put a very low dollar amount on the gift. Anything to get you to think about the person. And it takes some of the frenzy out of a big family gathering. No stress. We’re loose with the kids though.

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