Tips for Managing Financial Stress during the Holidays
Holiday stress can be caused by many factors: unrealistic expectations, over-spending and family issues. The increased demands of shopping, parties, family reunions and house guests also contribute to fatigue and tension. How can you minimize financial stress during the holidays? Setting a realistic holiday budget and making sure to stick to it are the first steps to a more affordable and less stressful season.
How much money should you plan to set aside for this holiday season? Many financial planners recommend spending no more than 1.5% of your annual income on holiday spending. So if your annual household income is $50,000 you should spend $750 or less on holiday gifts, travel and entertainment.
1. First create your budget – add up how much you spent during last year's holiday season, including the cost of gifts, entertaining, meals and travel. Plan ahead for this year, writing down the gifts and events you plan to spend money on this year, and setting a limit for each person and activity.
2. Practice being thrifty – save money by comparison shopping in advance, hunting for deals online, shopping early and watching for sales. Don’t get swept up in the shopping frenzy and spend more than you intended. Be an educated consumer and beware of sales pitches.
3. Use cash whenever possible as it helps to limit your spending. Shop with a list and track your purchases as you go. Avoid impulse purchases of items near the cash register as you wait to check out.
4. Minimize use of credit cards - if you do charge your holiday expenses, use your credit cards with the lowest interest rates and attempt to pay them off immediately. If you carry a balance, try to pay above the minimum payment amount.
5. Lessen travel expenses – if you need to fly, try to buy your ticket in advance. Calculate if it would be cheaper to drive or take other means of transportation. Also, avoiding multiple trips to stores saves time and money.
6. Make your own gifts or give the gift of time - Gifts such as cookies, fudge or another homemade item are often more meaningful; most people appreciate your time and effort. The gift of time with family and friends is also precious.
7. Talk openly with your family about your financial limitations – consider setting a dollar limit on gifts, doing a “Secret Santa” or donating to charity instead of gifting this year. Some families set a limit on the number of family members for whom to buy gifts, draw names or only give presents to children.
8. Entertain for less - holidays are a fantastic time to entertain, but advance planning and budgeting can help you avoid financial woes. For example, consider hosting a potluck dinner instead of providing all the food
For more information or to discuss financial concerns please contact Partners Employee Assistance Program at 1-866-724-4EAP.
In case of emergency, please call 911 or your local hospital emergency service.
This content was last modified on: 12/03/2013