NEW YORK– The holidays are meant to be a time of celebration with family and friends. But they can also exert pressure to spend money on gifts, gatherings and plane tickets home, which is further exacerbated by brand emailssocial media influencers and family expectations.
Of credit card debt is rising and prices for many items are still high due to inflationAccording to Dr. Marketa Wills, CEO and medical director of the American Psychiatric Association, overspending during the holidays can add to the financial stress many Americans are already experiencing.
“The idea that you tend to buy gifts for all your friends and family adds a tremendous amount of stress to someone trying to have the perfect holiday,” Wills said.
But there are ways to get through the holidays without spending more than you can afford. From setting expectations with your family to creating a budget and giving experiences instead of things, here are expert recommendations to avoid financial stress during the holidays:
To avoid overspending on gifts for family and friends, set a specific goal, says Matt Watson, CEO of Origin, a financial planning app. Before you start shopping, ask yourself what your spending limit is.
“People get into ‘justification mode,’ where you have a general idea of what you want to spend, but then you see something really cool and suddenly you’ve done that a few times and you’re spending twice as much as you thought you could. ,” Watson said.
Watson also recommends that you do this in your budget calculations how much you pay for taxes and shipping costs.
In many families, the holidays mean going all out with gift giving. But this can quickly become stressful if your finances make it difficult to keep up. Managing expectations is crucial.
“You can avoid feeling inadequate, or like you’re not doing well, by having an honest conversation about where your finances are,” says Watson.
Being open about your money can be difficult, but if you’re struggling with debt or other financial problems, this can help your family and friends understand that they should prioritize inexpensive gifts or activities.
Planning your holiday shopping in advance can make it easier to stay within your budget.
“When people feel rushed, they tend to buy more expensive things,” said Watson, who also pointed out that shipping costs increase closer to Christmas.
As you budget for the holidays, make a list of the items you want to purchase and slowly start purchasing them. This way you spread your costs over multiple paychecks and avoid that depending on credit for last minute expenses.
Wills recommends people opt for homemade gifts if they want to show appreciation for their loved ones without spending too much money. Homemade gifts do not always have to be handmade, they can also be actions.
“I’ll look after you, I’ll cook you a meal,” Wills said. “Things like that take the financial pressure off and make for a more joyful holiday season.”
Shopping expert Trae Bodge has noticed in recent years that young people prefer to give each other experiences rather than items. She recommends finding affordable, fun activities to do with your loved ones.
Examples of this are skating, walking or organizing a potluck. You can also gift a photo shoot, framed photos or digital albums to commemorate happy experiences.
Expectations or traditions you grew up with, such as buying expensive gifts for every member of your extended family, can cause stress during the holidays. This is what Bodge calls “keeping up with the Joneses,” which refers to trying to keep up with other people’s expectations rather than what is realistic to spend.
“Sometimes you may have a family member who is very well off financially and who likes to treat you to big, extravagant things. If you are not in the same financial position, you should not feel obligated to give back,” Bodge said.
When creating your own new traditions, Watson recommends sharing the financial goals you have, such as saving for a house or paying off debt. This will help your loved ones understand why you want to limit spending during the holidays.
Wills also recommends cutting costs by being selective with your spending. For example, when it comes to hosting, even having a small group of people can be very expensive if you are expected to pay for everything. If you find yourself in this situation, you can suggest that everyone bring a dish.
“Think about a potluck meal during the holidays. Have everyone bring something to the event to share the cost,” she said.
If you are having financial problems, it can help to talk about it with your family and friends.
“Sharing stress in itself can be therapeutic for the person concerned about it during the holidays,” says Wills.
Making space to listen to your loved ones’ feelings is just as important, she said.
And if the holidays are a difficult time for you, Wills recommends prioritizing your mental health and good habits, like getting proper rest and exercising.
Tis the season for social events happening every weekend, but if they’re causing you too much financial stress or taking a toll on your mental health, it’s okay to be selective.
Additionally, if you start to feel uncomfortable with certain conversations with your family, Wills recommends taking some time for yourself by taking a walk or removing yourself from the conversation.
If you are experiencing mental health problems, there are several resources you can use to find professional help.
In the US, you can call 211 to speak with a mental health professional confidentially and for free.
Other mental health resources include:
Veterans Crisis Line: Call 1-800-273-TALK (8255)
Crisis text line: Text the word “Home” to 741-741
The Trevor Lifeline for LGBTQ Youth: 1-866-488-7386
The Trans Lifeline: 1-877-565-8860
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The Associated Press receives support from the Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
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A version of this story was moved on December 21, 2023. This version has been updated with new quotes and material.