New York — The holiday season is often seen as a time for joy, family, and togetherness. Yet, for many, it can also bring financial strain. From purchasing gifts and attending parties to covering travel costs, the pressure to spend can quickly spiral, especially in the face of persistent inflation, rising credit card debt, and a barrage of advertising.
Dr. Marketa Wills, CEO and Medical Director of the American Psychiatric Association, warns that the desire to “create the perfect holiday” by overspending can exacerbate stress, leaving individuals feeling burdened by the weight of financial expectations.
Fortunately, experts suggest several strategies to keep holiday spending in check while still celebrating meaningfully. Below, we outline key tips for managing your finances during the festive season:
1. Set a Realistic Budget
The first step in avoiding financial strain is to establish a clear spending limit. Matt Watson, CEO of Origin, a financial planning app, advises shoppers to decide on a budget before browsing for gifts. “People often fall into ‘justification mode,’ where they start justifying extra spending once they find something they like,” Watson explained. “What starts as a reasonable budget can quickly double.”
When setting your budget, don’t forget to include additional expenses like taxes and shipping fees, which can add up unexpectedly.
2. Communicate Openly with Loved Ones
Holiday gift-giving can feel like a competitive sport, especially in families with varying financial means. To ease the pressure, Watson suggests managing expectations through honest conversations. “Discuss your financial situation openly,” he says. Sharing challenges such as debt or budgeting constraints can help family members understand your position and perhaps prioritize thoughtful, cost-effective gifts or activities.
3. Avoid Last-Minute Purchases
Last-minute shopping often leads to impulsive, expensive decisions. To stick to your budget, Watson recommends planning well in advance. By making a shopping list early and spreading out purchases across several paychecks, you can avoid the temptation of overspending as the holiday deadline approaches.
4. Consider Meaningful, Low-Cost Gifts
While store-bought gifts are a holiday staple, they aren’t the only option. Dr. Wills suggests opting for homemade gifts or experiences, which often carry more personal significance. “Offering services like babysitting or cooking a meal can provide a meaningful alternative without financial strain,” she says.
For those seeking something more interactive, shopping expert Trae Bodge notes that younger generations are increasingly prioritizing experiences over material gifts. Simple activities such as hiking, ice skating, or even hosting a potluck can create lasting memories without the hefty price tag.
5. Create New Traditions
Long-standing family traditions may carry unspoken expectations — particularly when it comes to extravagant gift-giving. Bodge advises against the pressure to “keep up with the Joneses.” If your financial situation doesn’t allow for lavish exchanges, it’s important to create your own traditions that align with your current circumstances.
“Sometimes, a wealthier family member may lavish you with expensive gifts. If that’s not your financial reality, don’t feel compelled to reciprocate in kind,” she adds. Watson also recommends sharing your financial goals with loved ones, such as saving for a home or paying off debt. This can help them understand your desire to scale back on holiday spending.
6. Share the Holiday Hosting Burden
Hosting holiday events can be expensive, especially when you’re expected to cover the entire cost. Dr. Wills suggests a collaborative approach: propose a potluck-style meal where everyone contributes a dish. This allows everyone to pitch in and share the financial load, creating a more affordable and communal celebration.
7. Prioritize Mental Health
Financial stress can take a toll on your mental well-being, and it’s crucial to address these feelings head-on. Dr. Wills encourages people to communicate openly about their stress and mental health struggles. Sometimes, simply sharing these concerns can offer relief.
If you find the holiday season overwhelming, she recommends taking steps to care for your mental health, such as practicing relaxation techniques or ensuring you get enough rest.
8. Don’t Be Afraid to Say No
With an endless list of social events and family gatherings, it’s easy to become overwhelmed. If certain activities or conversations are causing unnecessary stress, it’s okay to decline or take a break. “It’s okay to step back and prioritize your well-being,” Dr. Wills says. Taking a walk or finding quiet time for yourself can be helpful in moments of tension.
9. Seek Professional Help if Needed
If the holiday season triggers more severe emotional or financial stress, it’s important to seek professional help. Resources are available for those in need, including the 211 helpline for mental health support. For those in crisis, confidential services like the Veterans Crisis Line and the Crisis Text Line are also readily accessible.
By setting clear boundaries, managing expectations, and focusing on meaningful rather than material gifts, you can ensure a joyful and financially manageable holiday season. And remember, it’s okay to ask for help or say no when the pressure becomes too much.
For those who need additional support, mental health resources are available, providing a vital lifeline during this often-stressful time of year.
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