December is right around the corner, which means the holiday season is coming up! Often a time of spending time with loved ones, creating meaningful memories, and setting goals for the new year, however, it can also be a financially stressful period. Unfortunately, many are overwhelmed by the pressure of buying gifts for the holidays, possible year-end pressures at work, or stress induced by the changing weather.
Fortunately, the financial stress that often comes with the holiday season can be alleviated in a straightforward way. By applying an easy-to-follow set of rules you can make sure you go into the holiday season financially confident, allowing you to fully enjoy the holiday season with your loved ones and go into the new year without feeling stressed or overwhelmed about your financial situation. In this article, we go over a total of five tips to help you overcome the financial stress you may feel during the holiday season. We want everyone to be able to fully enjoy themselves this holiday season, and this article is here to help you do so. Let’s jump in!
1. Create a Budget
The most important thing you can do to avoid financial stress, even more so during this time of the year, is to create a budget. You can start crafting a budget by checking how much money goes to your recurring expenses every month (like bills), how much money goes toward variable expenses like restaurants, and how much you have left over after you pay these expenses. Also, take into account any possible savings you may have, after which you can decide how much you want to and can comfortably spend this holiday season. If you have pinpointed an amount you want and can comfortably spend, it’s time to allocate this money.
You can start allocating this money by asking yourself thoughtful questions. If you’re going to host a party, how much of this money are you spending on food and drinks? How much on decorations? And how much on entertainment? Or maybe you want to celebrate this holiday season with gifts. How much are you willing to spend on gifts? And how much on a potential holiday dinner? Or maybe you have plans to travel to family or friends. How much do you need for that? These are all fair questions to ask yourself in preparation for the upcoming month.
When you have allocated the money to where you want to spend it, you’ll potentially save a lot of that pre-holiday financial stress you might have had in previous years. And after carefully crafting a solid budget, the most important thing you can do is stick to it! One practical thing you can do is to share your budget with a loved one or a friend, who can become your accountability buddy. (We know how hard it can be to openly talk about your finances with others, but this can help you immensely in sticking with your budget!)
2. Set Realistic Expectations
When you know how much money you can comfortably spend this holiday season, you have started to set expectations of what you are able to do for yourself, your family, and your friends. Not knowing where you stand financially can induce a lot of stress, even more so during the holiday season. By being realistic about your financial situation, crafting a budget, and setting realistic expectations, you’ll potentially reduce a lot of financial stress.
After you have set expectations for yourself, the next step is to communicate those with the people around you. You might feel stressed by the eventual expectations others around you have of you, and talking openly about what you can and cannot do can help you greatly by removing the stress associated with this. We know it can be extremely tough to have this conversation, but communicating openly about eventual financial constraints helps you establish realistic expectations for gift exchanges, travels, and activities during the holiday season. By communicating this beforehand you’ll greatly reduce the pressure that may be weighing you down.
Even more so during the holiday season, your friends and family will most likely be understanding when you explain to them your financial situation. Although having this conservation can be hard, if you feel stressed by thinking about buying holiday presents or hosting a party, try to move beyond your comfort zone and talk to your friends and family about your situation. After this conversation, you’ll feel relieved. Maybe they even have some tips for you to improve your financial situation next year!
3. Start Preparing Early for the Holiday Season
In the previous two tips we’ve talked about how to create a budget and why you want to set realistic expectations. Now, let’s move on to more practical tips to make sure you don’t overspend during the upcoming holiday season.
During the holiday season gifts and decorations will be more expensive than when you buy them a good amount of time before the holiday season starts. This is the time to try your best to find the best deals and promotions. The more time you have, the likelier you are to find a good deal on that perfect gift, the most beautiful decorations, or the activity you’re dying to organize. And to add to that, another straightforward reason to start on time is that it’s often the case that the earlier you start deal-hunting, the better the deal.
Sure, it takes some effort to compare prices and find the most cost-effective deals, however, in the end, it is definitely worth it. You can easily save up to 100s of dollars if you take the time to hunt for the best deal on that perfect gift.
4. Try to Avoid Impulse Buying
In tip 1 we spoke about creating a budget and the importance of sticking to it. If you want to go through the holiday season without any of the financial stress possibly associated with it, the best thing you can do is stick to this budget. One of the easiest ways to go over this budget is by making impulse purchases. That’s why we want to single out the importance of avoiding impulse buying since it can give you a lot of stress after the fact.
But how to go about this practically? Before making a purchase, consider whether it fits within your budget and whether it’s a necessary expense. Taking a moment to reflect on the reasons for making a purchase can help you prevent overspending. A good practice to adhere to is to always sleep on whether to make a purchase or not. If you want to buy something during the holiday season, never make the purchase right away. Put it on hold for at least a day, and if the next day you still think this purchase is the right one to make, then make it. More often than not you’ll find that after some reflection on the purchase, the pros of making it don’t outweigh the cons.
5. Focus on the Holiday Experience
To round off this list of tips, we want to talk about something which is a bit less actionable, but extremely important either way. During the upcoming holiday season, try to shift your focus from material gifts to having a good time with your loved ones. Creating lasting memories through shared activities such as cooking a meal together or enjoying a holiday movie night may last way longer than any material gift that you can give. These experiences can be just (and more often than not even more!) meaningful without the hefty price tag.
Removing the hefty price tag from the equation has the potential to alleviate a lot of the financial stress you may feel during the holiday season. It’s not about who can buy the most expensive gift or host the most extravagant party, it’s about creating meaningful memories with your loved ones. And creating special memories is a lot easier when you’re not pressed down by financial stress.
It’s About Spending Time with Your Loved Ones
Remember, the holidays are about spending time with loved ones and creating special memories. By planning ahead, setting realistic expectations, and being mindful of your budget, you can enjoy the season without excessive financial stress. Start by creating a budget and setting realistic expectations for yourself. And although it’s extremely tough, it can immensely help you if you communicate openly about your financial situation with the people around you.
After you’ve created a budget and set realistic expectations, it’s probably time to do some shopping! By starting early and hunting down the best deals you’ll make sure to get the most bang for your buck. And while it can be extremely tempting to fall for the doorstoppers when you go to the shopping mall, try to avoid impulse buys. Impulse buying is one of the ways in which most people overshoot their budget, and by not making any you have the best chance of actually sticking to your budget. Again, it’s all about creating lasting memories and spending time with your loved ones. The last thing you want during the holiday season is to be weighed down by financial stress, and that’s why we hope to have helped you alleviate any of this stress you may have by making this list of five actionable tips. Happy Holidays!