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The holiday season is just around the corner. While Andy Williams is famous for crooning that it is the “most wonderful time of the year,” the reality is that December is the most stressful time of the year. Some of the reasons include setting unrealistic expectations for how the holidays should look and feel, additional pressure to meet social expectations, family dynamics, cultural differences and increased financial stress.
The financial burdens of the holiday season include gift giving and holiday travel. Additional expenses often include added food costs for holiday get-togethers, greeting cards and postage, or clothing for a special occasion or family photos. A recent Nerd Wallet survey found that about 83% of Americans, labeled “holiday shoppers,” plan to purchase gifts for friends and loved ones this holiday season, spending on average $925. That is quite a bit higher than estimated in last year’s report. In addition to an increase in holiday shoppers, 49% of Americans will be “holiday travelers” and plan to spend on average $2,330 for flights and hotel stays.
What I found interesting is that while Americans are planning to spend more, it will more than likely stretch already constrained finances. A recent report by Morning Consult, a survey research firm, found that only 52% of shoppers with incomes of $100,000, 33% of those who earn $50,000 to $99,900, and only 18% who earn below $50,000 annually would be able to “easily afford” anticipated 2024 holiday expenses.
According to the same Morning Consult survey, 20% of shoppers plan to take on debt to cover holiday spending. The problem with using debt to pay for holiday expenses is that it tends to linger and impact future financial stability. The Nerd Wallet survey found that “about 28% of 2023 holiday shoppers are still paying off debt they incurred almost a year ago.” The same survey found that “55% of shoppers say the costs associated with holiday spending stress them out. But 32% of shoppers think it’s important to purchase holiday gifts and experiences, despite the costs, to show others love.”
There are steps you can take to mitigate holiday spending potentially derailing your financial security. Investopedia’s “8 Tips to Help You Control Holiday Spending” offers these three key takeaways:
◗ Sticking to a budget is a good way to keep yourself out of debt at any time of year.
◗ Controlling your holiday spending is an essential aspect of a healthy financial life.
◗ Alternative gifts, such as volunteering or handmade goods, are ways to save money during the holiday season.
The article discussed ways to set holiday spending limits, build better spending habits and be realistic about your budget. It recommended that, “If your shopping list includes more than five people outside of your immediate family, start cutting it.” Thoughtful gifts need not be expensive. A heartfelt note about how someone has touched your life or a certificate for a future meal, child care or yardwork can be just as meaningful to a neighbor or friend.
As our families aged, immediate and extended, we changed traditions and reduced the circle of people who received gifts from our family. One of our sons shops used bookstores to find the perfect read for each of us. Both sons are good at giving Mike and me the gift of their time—yardwork, house maintenance or taking care of the cats. We appreciate that they also make time to hang out at our house.
We also try to spend time together doing family activities, and each person is assigned a day to plan. Sometimes it’s a movie or a trip to a museum or a family hike. In the end, it isn’t so much what we do that matters but that we do it together as a family.•
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Hahn is a certified financial planner and owner of WWA Planning and Investments in Columbus. She can be reached at 812-379-1120 or jalene@wwafp.com.
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